At-A-Glance

International

IASB – International Accounting Standards Board (www.ifrs.org)

• Exposure Draft - International Tax Reform - Pillar Two Model Rules, Amendments to the IFRS for SMEs Accounting Standard, issued June 1, 2023. “The proposed amendments would introduce a temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules; introduce targeted disclosure requirements in periods when Pillar Two legislation is in effect; and clarify that ‘other events’ in the disclosure objective for income tax include enacted or substantively enacted Pillar Two legislation. The comment period ends July 17, 2023.

• Supplier Finance Arrangements – Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures, issued  May 25, 2023, “to enhance the transparency of supplier finance arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk…The amendments supplement requirements already in IFRS Accounting Standards and require a company to disclose: the terms and conditions; the amount of the liabilities that are part of the arrangements, breaking out the amounts for which the suppliers have already received payment from the finance providers, and stating where the liabilities sit on the balance sheet; ranges of payment due dates; and liquidity risk information.” Effective for annual reporting periods beginning on or after January 1, 2024.

• Income Taxes – Amendments to IAS12 – issued May 23, 2023. “The amendments give companies temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s (OECD) international tax reform. The OECD published the Pillar Two model rules in December 2021 to ensure that large multinational companies would be subject to a minimum 15% tax rate. More than 135 countries and jurisdictions representing more than 90% of global GDP have agreed to the Pillar Two model rules. The IASB has taken urgent action to respond to stakeholders’ concerns about the uncertainty over the accounting for deferred taxes arising from the implementation of the rules. Effective immediately, but disclosures required for annual reporting periods beginning on or after January 1, 2023.

• Exposure Draft - Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates - IFRS Sustainability Disclosure Standard, issued May 11, 2023, “sets out the methodology proposed by the ISSB for amending SASB Standards metrics to enhance their international applicability. This Exposure Draft also includes the proposed approach for updating the digital SASB Standards Taxonomy to reflect amendments made to the SASB Standards.” The comment period ends August 9, 2023.

IFAC – International Federation of Accountants (www.ifac.org)

• The International Public Sector Accounting Standards Board (IPSASB) – a) Updated Conceptual Framework: Chapter 5, Elements in Financial Statements; b) International Public Sector Accounting Standard (IPSAS) 47, Revenue; and c) IPSAS 48, Transfer Expenses, issued May 31, 2023, “update and simplify existing principles, while filling gaps in the IPSAS literature, resulting in more consistent guidance for IPSAS users and better support for implementation globally. Informed by stakeholder feedback and refinement over the course of several years, the pronouncements introduce: A single up-to-date source of guidance applicable to all revenue transactions across the public sector; and A new straightforward accounting model for the recognition and measurement of transfer expenses in the public sector. The effective date for both IPSAS 47 and IPSAS 48 is January 1, 2026, with earlier application permitted. Updates to the Conceptual Framework are effective when published.

• The International Public Sector Accounting Standards Board (IPSASB) – a) Updated Conceptual Framework: Chapter 7, Measurement of Assets and Liabilities in Financial Statements; b) International Public Sector Accounting Standard (IPSAS) 45, Property, Plant, and Equipment, and c) IPSAS 46, Measurement, issued May 29, 2023, “provide simplified, more consistent guidance addressing key conceptual challenges and practical implementation issues identified by the public sector community by introducing: Straight-forward principles for initial and subsequent measurement, that apply throughout IPSAS and align with the Conceptual Framework; and Enhanced property, plant, and equipment guidance that also clarifies the recognition and measurement of infrastructure and heritage assets.” The effective date for both IPSAS 45 and IPSAS 46 is January 1, 2025, with earlier application permitted. Updates to the Conceptual Framework are effective when published.

• The International Public Sector Accounting Standards Board (IPSASB) - Reporting Sustainability Program Information—Amendments to RPGs 1 and 3: Additional Non-Authoritative Guidance., issued May 9, 2023, provides “additional guidance on how two previously published Recommended Practice Guidelines (RPGs) can be applied now by governments and public sector entities to report on sustainability program information.” Effective immediately.

IFR4NPO - International Financial Reporting for Non-Profit Organisations (www.ifr4npo.org)

• No new developments.

IOSCO – International Organization of Securities Commissions (www.iosco.org)

• No new developments.

ACCA – Association of Chartered Certified Accountants (www.accaglobal.com)

• Reporting of R&D: Disclosure without recognition? - research report published May 24, 2023, by ACCA and the University of Glasgow Adam Smith Business School, “investigates how R&D is currently being reported by listed organisations across the world,” and makes recommendations for improvements.
  

CIMA – Chartered Institute of Management Accountants (www.cimaglobal.com)

• No new developments.

World Economic Forum – (www.weforum.org)

• No new developments.

Africa, Europe, India and the Middle East (AEIME)

FRC – Financial Reporting Council of the UK (www.frc.org.uk)

• Audit Committees and the External Audit: Minimum Standard,, issued May 22, 2023. “The primary objective of Standard is to enhance performance and ensure a consistent approach across audit committees within the FTSE350.” The Standard is issued for voluntary adoption until formal legislation is passed requiring compliance.

ICAEW - Institute of Chartered Accountants in England and Wales (https://www.icaew.com/)

• Continuing Professional Development (CPD) Regulations updated May 18, 2023, requiring members to “complete at least 20 CPD hours annually, of which a proportion must be verifiable; undertake at least one hour of ethics training each year; keep a record of their CPD hours so they can be inspected on request by ICAEW’s Quality Assurance Department.”
  

EC – European Commission (https://ec.europa.eu/)

• European sustainability reporting standards – first set, proposed May 18, 2023. “Mandatory reporting standards will ensure that companies are fully transparent about their impact on people and the environment, as well as about the risks they face from climate change and other issues. They will be a key tool to combat greenwashing. These standards will also help companies to communicate and manage their sustainability performance more efficiently. Comment period ends July 10, 2023.

EFRAG – European Financial Reporting Advisory Group (www.efrag.org)

• Accounting for Variable Consideration – From a purchaser’s perspective, summary report published May 26, 2023, “examines different directions for requirements in relation to: • When to recognise a financial liability within the scope of IAS 32 Financial Instruments: Presentation/IFRS 9 Financial Instruments for variable consideration that will depend on the purchaser’s future actions (‘the liability recognition issue’). • Whether (and if so, when) changes in the estimate of a liability for variable consideration should either: (i) result in updating the cost of the acquired asset that is held by the purchaser; or (ii) be recognised in profit or loss (‘the measurement of the acquired asset issue’).”
  

Americas, Asia, Australia and New Zealand (AAANZ)

AICPA – American Institute of Certified Public Accountants (www.aicpa.org)

• Financial Institutions Overview of Certain A&A Risks, practice aid published June 21, 2023, to “alert practitioners to possible trouble spots that may require special attention as audits, reviews, and other engagements are performed.”

• Accounting for and auditing of digital assets, practice aid published June 13, 2023, “offers important and up-to-date information about how to account for and audit digital assets.”

• Financial institutions overview of certain A&A risks, Center for Plain English Accounting report published June 21, 2023, to “alert practitioners to possible trouble spots that may require special attention as audits, reviews, and other engagements are performed.”
  

FASB – Financial Accounting Standards Board (www.aicpa.org)

• Concepts Statement No. 8, Conceptual Framework for Financial Reporting ter 2: The Reporting Entity, issued June 8, 2023. “The new chapter is similar to the rest of the framework in that it establishes concepts that the Board would use in developing standards of financial accounting and reporting. It would provide the Board with a framework for developing standards that meet the objective of financial reporting and enhance the understandability of information for existing and potential investors, lenders, donors, and other resource providers of a reporting entity.

• Exposure Draft - Compensation—Stock Compensation (Topic 718) - Scope Application of Profits Interest Awards, issued May 11, 2023, “intended to improve generally accepted accounting principles (GAAP) by adding illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement within the scope of Topic 718, Compensation—Stock Compensation.” Comment period ends July 10, 2023.

GASB – Governmental Accounting Standards Board (www.gasb.org)

• No new developments

COSO - The Committee of Sponsoring Organizations of the Treadway Commission (www.coso.org)

• No new developments
  

PCAOB – Public Company Accounting Oversight Board (www.pcaob.org)

• Inspection Observations Related to Public Company Audits Involving Crypto Assets, spotlight report published June 14, 2023, highlights certain responsibilities under PCAOB standards for auditors of public companies and brokers and dealers1 transacting in or holding crypto assets, our inspection observations related to crypto assets, and important reminders for auditors when performing audits of public companies or broker-dealers, where activities associated with crypto assets are material to the financial statements.

• Amendments to PCAOB Auditing Standards related to a Company’s Noncompliance with Laws and Regulations And Other Related Amendments, Release No. 2023-003, issued June 6, 2023. See article in this issue for details.

SASB – Sustainability Accounting Standards Board (www.sasb.org)

• No new developments

SEC – Securities and Exchange Commission (www.sec.gov)

• No new developments