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IAS 36 — Narrow-scope amendment

Date recorded:

Comment letter analysis

In May 2011, the IASB issued IFRS 13 Fair Value Measurement and, as a consequence, modified some of the disclosure requirements in IAS 36 Impairment of Assets relating to the measurement of the recoverable amount of impaired assets or cash-generating units.  The amendments resulted from the IASB’s decision in December 2010 to require additional disclosures about the measurement of impaired assets with a recoverable amount based on fair value less cost of disposal (formerly referred to in IAS 36 as ‘fair value less cost to sell’).

However, the IASB has been made aware that one of the amendments made to IAS 36 makes the disclosure requirements broader than it intended.

During its meeting in December 2012 the IASB decided to propose a narrow-scope amendment to address this issue.  The Exposure Draft was published in January 2013 with a 60-day comment period.

    1. Do you agree with the staff’s recommendation to finalise the proposed amendment to IAS 36?

    2. Do you grant the staff permission to begin the balloting process for the amendment to IAS 36?

      A member noted the difference in language ‘cost to sell versus ‘cost to disposal’ to which the Staff noted that IFRIC will be looking into align the wording and looking also at other standards and this is not relevant only to IFRS 5 and IAS 36 where these words appear.  The Staff will follow up on these editorial differences.

      The Board  agreed with the Staff recommendations.

      Summary of due process

      In January 2013 the IASB published the Exposure Draft ED/2013/1 Recoverable Amount Disclosures for Non-Financial Assets (the ‘Exposure Draft’) proposing a narrow-scope amendment to IAS 36 Impairment of Assets. These amendments sought to better represent the IASB’s initial intention when it amended some disclosure requirements in IAS 36 as a result of the development of IFRS 13 Fair Value Measurement. The Exposure Draft was published within a 60-day comment period.

      On the basis of the discussions previously held, the IASB has tentatively decided to proceed with the publication of the final amendments to IAS 36. The balloting process of the final amendments is expected to start after this meeting with publication scheduled for the second half of May 2013.

      The Staff asked the Board the following questions:

      1. Is the IASB satisfied that all required due process steps that pertain to the publication of final amendments have been complied with?

      The Board was satisfied that all the required due process steps pertaining to the publication of final amendments have been complied with.