At its meeting on May 23-27, 2022, the IASB met to continue its discussions from April 2022 on the requirements for assessing a financial asset’s contractual cash flow characteristics. The IASB discussed whether and, if so, when to clarify how an entity would apply the requirements to financial assets with particular features such as ESG-linked features and to contractually linked instruments. Based on its analysis, the IASB decided to start a standard-setting project to clarify particular aspects of the requirements in IFRS 9 for assessing the contractual cash flow characteristics of a financial asset. The IASB will discuss the project plan at the June 2022 meeting.

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At its meeting on May 23-27, 2022, the IASB met for final deliberations on the key challenges identified during meetings with preparers. The DRM model is intended to enable an entity to better reflect its dynamic risk management strategy in its financial statements and provide useful information to users of financial statements. The IASB tentatively decided to change the mechanics of the DRM model to require: (i) designated derivatives to be measured at fair value in the statement of financial position; (ii) the DRM adjustment to be recognized in the statement of financial position, as the lower of (in absolute amounts): (a) the cumulative gain or loss on the designated derivatives from the inception of the DRM model; and (b) the cumulative change in the fair value of the risk mitigation intention attributable to the repricing risk from inception of the DRM model (which would be calculated using the benchmark derivatives as a proxy); and (iii) the net gain or loss from the designated derivatives calculated in accordance with (i) and the DRM adjustment calculated in accordance with (ii) to be recognized in the statement of profit or loss. The IASB decided to add the Dynamic Risk Management project to its standard-setting program; and continue using the expertise of advisory bodies instead of establishing a dedicated consultative group for the project. At a future meeting, the IASB will discuss the detailed project proposal, setting out the specific areas for deliberation and potential time line.

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At its meeting on May 23-27, 2022, the IASB met to discuss the main features of different regulatory schemes, the advice from the Consultative Group for Rate Regulation on how the IASB might respond to feedback on its proposals on total allowed compensation in the Exposure Draft and its plans for redeliberating specific topics relating to the proposals on total allowed compensation. The IASB was not asked to make any decisions. At this meeting, the IASB also continued to redeliberate the scope of the proposals. In particular, the IASB discussed (i) application questions relating to the term ‘customers’ in the Exposure Draft; and (ii) the potential scope exclusion of regulatory assets or regulatory liabilities relating to financial instruments within the scope of IFRS 9. The IASB will continue to redeliberate the project proposals at future meetings.

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At its meeting on May 23-27, 2022, the IASB met to discuss feedback provided in comment letters on its Exposure Draft. The IASB also discussed preliminary views on the next steps for this project.

The IASB was not asked to make any decisions. The IASB will consider the next steps for this project at a future meeting.

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At its meeting on May 23-27, 2022, the IASB met to discuss its Goodwill and Impairment project. The IASB discussed additional research on: (i) whether it is feasible to estimate the useful life of goodwill and the pattern in which it diminishes; and (ii) the potential consequences of transitioning to an amortization-based model. The IASB was not asked to make any decisions. The IASB will complete its research on the practical concerns raised by stakeholders with regard to the preliminary views described in the Discussion Paper on potential improvements to the disclosure requirements about business combinations. The IASB will then make decisions about: (a) the package of disclosure requirements about business combinations; (b) its preliminary view to retain the impairment-only model for the subsequent accounting for goodwill; and (c) other topics within the scope of the project.

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At its meeting on May 23-27, 2022, the IASB met to redeliberate the proposals in its Exposure Draft relating to: (i) disclosing the tax effect and the effect on non-controlling interests of items in the reconciliation between a management performance measure and the most directly comparable total specified by IFRS Accounting Standards; (ii) defining and disclosing ‘unusual income and expenses’ in a single note and the structure of that note; and (iii) classifying income and expenses from associates and joint ventures accounted for using the equity method for entities with specified main business activities. The IASB made a number of tentative conclusions in respect of each topic. The IASB will continue to redeliberate the project proposals at future meetings.

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