TECHNICAL HIGHLIGHTS

FINANCIAL REPORTING

ISCA Issues FRB 9 (Revised June 2024) On Accounting Implications Of The Interest Rate Benchmark Reform In Singapore

FRB 9 (Revised June 2024), issued on 27 June 2024, share accounting considerations to assist entities in their understanding of the accounting for financial instruments and hedge accounting which are affected by the replacement of interest rate benchmarks within these contracts.

FRB 9 (Revised June 2024) has been updated from FRB 9 (Revised January 2023) for the following:

• Additional background information on the approach for the transition of SIBOR loans; and
• Updates on accounting considerations on the transition of SIBOR loans.

ISCA Comments On IASB’s ED Business Combinations – Disclosures, Goodwill And Impairment (Proposed Amendments To IFRS 3 And IAS 36)

The objective of the proposals in the exposure draft is to improve the information companies provide to investors, at a reasonable cost, about the acquisitions those companies make. This information is intended to help investors better assess management’s decision to make an acquisition, and the performance of that acquisition.

We support IASB’s efforts to improve the information companies disclose about acquisitions to meet investors’ needs and reduce the complexity of the impairment test. However, we have received feedback on challenges faced in the practical application of the proposed disclosures for acquisitions. Hence, we propose IASB to provide further clarifications or guidance to ensure consistency in practice.

Other comments are as follows:

• In Singapore, many of the small and medium-sized enterprises (SMEs) adopt the local equivalent of IFRSs and may not have evaluated their acquisitions to the extent required for the proposed disclosure of quantification of expected synergies. Therefore, we expect that the costs might likely outweigh the benefits in having these disclosures, especially when these entities are wholly owned.
• There should be a consistent basis on how expected synergies should be derived to ensure comparability in practice.
• The proposed quantitative threshold of 10% (revenue, operating profit and assets) for identifying strategic business combinations is too low. Hence, we suggest IASB to increase the threshold to 20% and consider adopting a combination of other metrics.

IASB Unanimously Agrees To Finalise The Revision Of The Management Commentary Practice Statement

IASB unanimously decided to finalise the revision of IFRS Practice Statement 1 Management Commentary by making targeted refinements to its proposals set out in the Exposure Draft Management Commentary.

IASB Publishes Its Review Of Impairment Requirements Relating To Financial Instruments

IASB has concluded its Post-Implementation Review (PIR) of the impairment requirements in IFRS 9 Financial Instruments – Impairment. The summary report shows that the standard works as intended and provides useful information to users of financial instruments.

June 2024 IASB Update And Podcast Available

In this month’s IASB Update and Podcast, the topics discussed include Post-Implementation Review of IFRS 16 Leases, Management Commentary and targeted improvements to IAS 37 Provisions. In addition, IASB and FASB discussed their post-implementation reviews of revenue standards and leases standards.

June 2024 IFRIC Update Available

This Update is a summary of discussions by the IFRS Interpretations Committee (IFRIC). The topics include IFRIC’s tentative agenda decisions on Classification of Cash Flows related to Variation Margin Calls on ‘Collateralised-to-Market’ Contracts (IAS 7) and IFRIC’s agenda decision for IASB’s consideration on Disclosure of Revenues and Expenses for Reportable Segments (IFRS 8).

June 2024 IFRS For SMEs Accounting Standard Update Available

This edition of the Update includes an overview of the upcoming SME Implementation Group (SMEIG) meeting and an update on IASB’s redeliberations of proposals in the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard (2022 Exposure Draft).

July 2024 Agenda And Meeting Papers Available

• Accounting Standards Advisory Forum (ASAF)

At the ASAF meeting held on 8 and 9 July 2024, updates were provided on various IASB projects such as Financial Instruments with Characteristics of Equity, targeted improvements to IAS 37 Provisions, Power Purchase Agreements and Carbon Credits.

• IFRS Taxonomy Consultative Group

At the IFRS Taxonomy Consultative Group meeting held on 2 July 2024, topics discussed include IFRS Accounting Taxonomy, Digital Financial Reporting and Global Sustainability Standards Board: GRI Digital Taxonomy.

SUSTAINABILITY & CLIMATE CHANGE

Larger Listed Companies On Track For Mandatory Climate Reporting In FY 2025: Study By ACRA And NUS

The study found that larger listed companies – 78% of which are from the carbon-intensive sectors – are making good progress in climate reporting. The study also recommends strategies to strengthen climate-related disclosures to meet investors’ expectations and mandatory reporting requirements.

June 2024 ISSB Update And Podcast Available

In this month’s ISSB Update and Podcast, ISSB Chair Emmanuel Faber and ISSB Vice-Chair Sue Lloyd share on topics discussed at the ISSB meeting in June 2024, including the announcement that the Global Reporting Initiative (GRI) and IFRS Foundation will collaborate to deliver full interoperability between future GRI Standards and ISSB Standards that enables seamless sustainability reporting and the launch of the CDP 2024 disclosure platform, which is aligned with IFRS S2 Climate-Related Disclosures.