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ICAEW stresses importance of IFRS but urges agility and timeliness

Author: ICAEW Insights

Published: 30 Sep 2021

In ICAEW’s response to the IASB’s agenda consultation, ICAEW reiterated the importance of IFRS, the need for IASB to be both proactive and agile, and that interaction with the proposed new International Sustainability Standards Board is vital.

The IASB’s agenda consultation is a crucial part of the IASB’s overall due process, points out ICAEW, congratulating the Board on finalising major projects while responding to urgent issues, such as the pandemic and IBOR reform. ICAEW’s response is in relation to IASB’s key consultation about its future agenda.

ICAEW acknowledges that these are uncertain times: “We believe that the agenda consultation provides an opportunity to take stock of the importance of IFRS at a time of significant change in corporate reporting, the wider economy, and evolving user needs.” It also outlines how IFRS provides a universal ‘financial language’ which helps reduce preparation costs and increases cross-border trading in securities as international investors can more readily compare the performance of companies based in different countries. 

However, to ensure that these benefits continue to be applied, it is essential for IFRS to adapt and evolve, points out ICAEW. And indeed the IASB is doing just that by considering future projects relating to climate-related risks, the growing importance of intangibles in business models, and the emergence of new transactions such as cryptocurrencies. 

But there is more change to come, that is the growing importance of sustainability reporting and how this is intertwined with information included in financial statements. “ICAEW strongly supports plans for the IFRS Foundation to set up the proposed ISSB,” it says. “One of the key advantages of the IFRS Foundation establishing a sustainability reporting standards board is the natural linkage and coordination that can occur with the IASB.”

ICAEW is also calling for agile and proactive standard setting. “We suggest that the IASB considers how it might balance its due process with the need to be agile in certain circumstances. For example, is there scope for the IASB to ‘fast track’ projects which are more time sensitive?,” it says.

ICAEW suggests that the IASB should use this opportunity to consider whether any projects might usefully be paused or reconsidered with a view to freeing up resources to progress more urgent matters. 

You can find out more about IFRS requirements at icaew.com/financialreporting

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