Review of items previously referred to the IASB
The staff provided the Committee with a summary of issues that have been referred by the Committee to the IASB from January 2008 to May 2012, except for those recommended by the Committee to be addressed through the annual improvements process. The staff requested that the Committee review the table and provide direction to the staff on future action of those items.
The staff’s summary recommended that the following issues be reconsidered by the Committee:
- IAS 28 Investments in Associates issue requesting clarification on how impairment of investments in associates should be determined in the separate financial statements of the investor.
- IFRS 2 Share-based Payment issues:
- requesting clarification of the classification and measurement of share-based payment transactions for which the manner of settlement is contingent on either: a future event that is outside the control of both the entity and the counterparty; or a future event that is within the control of the counterparty; and
- requesting clarification on how to measure and account for a share-based payment in situations where a cash-settled award is cancelled and is replaced by a new equity-settled award and the replacement award has a higher fair value than the original award.
- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations issues:
- requesting guidance on how a disposal group should be recognised at the lower of its carrying amount and fair value less costs to sell when the difference between the carrying amount and fair value less costs to sell exceeds the carrying amount of non-current assets; and
- requesting guidance on whether an impairment loss for a disposal group classified as held for sale can be reversed if it relates to the reversal of an impairment loss recognised for goodwill.
Committee members generally expressed support for the recommendations outlined by the staff. However, Committee members highlighted two issues that should potentially be reconsidered by the Committee but were not recognised in the staff’s recommendation. They include:
- IFRS 2 issue requesting clarification of the classification of a share-based payment transaction in which the entity withholds a specified portion of the shares that would otherwise be issued to the counterparty upon exercise (or vesting) of the share-based payment award. Given that the Committee would consider addressing two other IFRS 2 issues, as noted above, the Committee preferred the virtue of completeness in addressing the lone remaining IFRS 2 issue.
- Financial instrument-related issues. A number of IAS 32 Financial Instruments: Presentation and IAS 39 issues were identified in the staff summary. The Committee did not necessarily recommend taking all these issues onto its future agenda, but instead, requested that the staff work with the Financial Instruments project team to consider these issues within the scope of the more broad reassessment of IFRS 9 Financial Instruments currently underway.
The staff intends to provide agenda papers on the above issues in future Committee meetings. The agenda papers are expected to explore the scope of the issue as well as the current diversity in practice.