The IFRIC staff introduced the topic by outlining the development of IFRIC 3 and the subsequent developments within the European Union, including the fact that EFRAG had not recommended that IFRIC 3 be endorsed for use in the EU. There followed a long and vigorous debate during which several alternative treatments were proposed.
Board Members acknowledged that IFRIC 3 had expressed a correct and appropriate interpretation of existing standards. Board Members expressed similar reservations over the effects of that Interpretation to those that had been expressed by IFRIC members at the time it was finalised but observed that they, like IFRIC, had been under the impression at the time that an Interpretation was needed urgently because of the imminent start of the EU 'cap and trade' scheme. However, it was apparent that this urgency was no longer there. Consequently, the Board decided to take the time to conduct a broader assessment of the nature of the various volatilities resulting from the application of IFRIC 3 to a 'cap and trade' scheme and to consider whether and how it might be appropriate to amend existing standards to reduce or eliminate some of those volatilities.
The Board voted to withdraw IFRIC 3 with a public explanation of its plans to conduct such wider assessment (12 in favour; 1 opposed; 1 abstained). How this withdrawal is to be effected will be decided at the July IASB meeting.
This summary is based on notes taken by observers at the meeting and should not be regarded as an official or final summary.
The IASB publishes summaries of the deliberations at Board meetings in its newsletter IASB Update. Past issues of IASB Update are available on IASB's Website. On Individual Project Pages on the IASB Website you will find links to observer notes and excerpts from IASB Update relating to that project.