At its meeting on June 20-22, 2022, the IASB met to discuss feedback from its Post-implementation Review of IFRS 9, Financial Instruments. In particular, the IASB discussed: (i) an analysis of stakeholder views of equity instruments for which an entity has elected to present fair value changes in other comprehensive income; and (ii) a literature review update. The IASB was not asked to make any decisions. The IASB will continue its discussions of the topic.

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At its meeting on June 20-22, 2022, the IASB met to continue its discussions on the reclassification of financial instruments issued by an entity as financial liabilities or equity instruments when the substance of the contractual terms changes without a modification to the contract. The IASB tentatively decided to add general requirements on reclassification to IAS 32 to prohibit reclassification other than for changes in the substance of the contractual terms arising from changes in circumstances outside the contract. This approach does not affect reclassifications already required in IAS 32.

The IASB also tentatively decided to clarify that when the substance of the contractual terms changes because of changes in circumstances outside the contract: (i) financial liability reclassified from equity would be measured at fair value at the date of reclassification. Any difference between the carrying amount of the equity instrument and the fair value of the financial liability would be recognized in equity; (ii) an equity instrument reclassified from a financial liability would be measured at the carrying value of the financial liability at the date of reclassification. No gain or loss would be recognized; and (iii) a reclassification would be accounted for in the reporting period in which the change in circumstances occurred. The IASB also acknowledged the importance of disclosures in helping users of financial statements better understand the change in classification and its effect on measurement, if any. The IASB will discuss other topics set out in the project plan at its future meetings.

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At its meeting on June 20-22, 2022, the IASB met to continue the discussion, started at its April 2022 meeting, on this application question: how does an investor apply the equity method of accounting when purchasing an additional interest (or disposing of an interest) in an associate while retaining significant influence?  The IASB considered an analysis of its preferred approach to applying the equity method of accounting, along with the implications of an alternative approach. The Board made a number of tentative conclusions as a result of its discussion. The IASB will continue discussing the application questions within the scope of the project at a future meeting.

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At its meeting on June 20-22, 2022, the IASB met to redeliberate the proposals in its Exposure Draft General Presentation and Disclosures relating to: (i) general requirements for additional line items and subtotals; and (ii) the use of columns for presenting management performance measures. The Board made a number of tentative conclusions as a result of the discussion. The IASB will continue to redeliberate the project proposals at future meetings.

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At its meeting on June 20-22, 2022, the IASB met to discuss its project on Business Combinations under Common Control. The IASB discussed whether conceptually the acquisition method and/or a book-value method should apply to business combinations under common control. In particular, the IASB discussed: (i) the similarities and differences between business combinations under common control and business combinations covered by IFRS 3; and (ii) the types of users of a receiving entity’s financial statements and their information needs compared to those of a business combination covered by IFRS 3. The IASB was not asked to make any decisions. The IASB will continue its discussions on selecting the measurement method, including practical considerations such as a cost constraint, at a future meeting.

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At its meeting on June 20-22, 2022, the IASB met to discuss feedback on its Exposure Draft, which proposed amendments to IAS 1, Presentation of Financial Statements. The comment period for the Exposure Draft ended on March 21, 2022. The IASB also discussed how to proceed with the project. The Board discussed: (i) classification as current or non-current; (ii) separate presentation and disclosure; and (iii) transition and effective date deferral. The Board made a number of tentative conclusion. The IASB will discuss the effective date of the proposed amendments, as well as its compliance with applicable due process steps, at a future meeting.

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At its meeting on June 20-22, 2022, the IASB met to discuss the proposed scope and objective of its project to clarify the requirements in IFRS 9 for assessing a financial asset’s contractual cash flow characteristics. The IASB was not asked to make any decisions. The IASB will discuss potential clarifications to the requirements at a future meeting.

Review the IASB Update and podcast on the Board's Web site.