Sustainability reporting – bring the ethics!

As we addressed here, the International Sustainability Standards Board has issued its first two exposure drafts, General Sustainability-related Disclosures and Climate-related Disclosures, both open for comment until July 29, 2022. Here’s an extract from a comment letter submitted by the International Ethics Standard Board for Accountants: Sustainability reporting is increasingly important, not only in meeting…

Disclosing carbon offsets, or: credibility and integrity!

The current exposure draft on climate-related disclosures would require disclosure, among much else of course, of the intended use of carbon offsets in achieving emissions targets… The disclosure would cover whether the offsets will be subject to a third-party offset verification or certification scheme and if so, which scheme, or schemes; the type of carbon…

A completed post-implementation review- nothing to see here!

The IASB recently released a Project Report and Feedback Statement concluding its Post-implementation Review (PIR) of IFRS 10 Consolidated Financial Statements; IFRS 11 Joint Arrangements; and IFRS 12 Disclosure of Interests in Other Entities. Here’s how the news release summed it up: Feedback from stakeholders and research undertaken as part of the PIR shows that the requirements set…

Disclosures on sustainability – would being good, be good enough?

On the current exposure drafts on sustainability- and climate-related disclosures – how good would be good enough? I don’t suppose anyone, including its drafters, thinks the exposure drafts are perfect. Many respondents, based on my unscientific scan of comment letters to date, would likely allow that they’re good (albeit that may mainly be defined as…

Sustainability-related disclosures – a flawed enterprise?

As we addressed here, the International Sustainability Standards Board has issued its first two exposure drafts, General Sustainability-related Disclosures and Climate-related Disclosures, both open for comment until July 29, 2022. One of the proposals’ key structuring concepts is that of “enterprise value,” as evidenced for instance in the following passages: A reporting entity shall disclose…

ESMA’s 2020 report – pump that action rate!

The European Securities and Markets Authority (ESMA) recently issued a report on its 2020 corporate reporting enforcement and regulatory activities Here’s an extract from the summary: Enforcers undertook 711 examinations (729 in 2020) of financial statements drawn up in accordance with International Financial Reporting Standards (IFRS), constituting an examination rate of 17% of issuers listed…

Goodwill and impairment – still no compelling evidence?

Let’s look in on the IASB’s Goodwill and Impairment project! In September 2021 the IASB decided to prioritize making tentative decisions on a package of disclosure requirements about business combinations, as described in a March 2020 discussion paper, and analyzing specific aspects of the feedback on the subsequent accounting for goodwill. It recently discussed whether it’s feasible…

Elon Musk on ESG, or: spot the phony!

A recent Globe and Mail article reported on Elon Musk’s recent attacks on ESG Here are some extracts from the piece, written by Jeffrey Jones: Elon Musk is no fan of the environmental, social and governance scores used to evaluate companies for inclusion in investment funds. Seeing his company booted from a major ESG index…

Classification of SPAC shares – no answer, little interest

Here’s a recent tentative agenda decision issued for comment by IFRIC: The Committee received a request about applying IAS 32 in relation to the classification of shares issued by a special purpose acquisition company (SPAC) as financial liabilities or equity. A SPAC is a listed entity that is established to acquire a yet to be…

Discount rates – no imminent solutions, no great sweat?

The UK’s Financial Reporting Council has issued Thematic Review: Discount Rates Here’s the summary: Discounted cash flows, and discount rates themselves, are commonly used when applying IFRS. Determining an appropriate discount rate is a complex area of financial reporting, which can also be a source of significant estimation uncertainty. The challenge is partly because the…