The IASB met on July 25, 2023 to continue its discussion on the Dynamic Risk Management (DRM) model. The IASB discussed the qualifying criteria for determining an entity’s current net open risk position and whether financial assets and financial liabilities denominated in more than one currency could be designated in the same DRM model. The IASB also discussed whether non-linear derivatives (such as interest rate options) and ‘off-market’ derivatives (derivatives that have a non-zero fair value on initial designation) would be eligible to be designated derivatives in the DRM model. The IASB tentatively decided that non-linear derivatives, except for net written options, would be eligible to be designated derivatives when their use is consistent with an entity’s risk management strategy. Finally, the IASB tentatively decided that off-market derivatives would be eligible to be designated derivatives when their use is consistent with an entity’s risk management strategy. However, only the fair value changes that arise after the date of initial designation are considered when measuring the DRM adjustment.

Re­view the IASB Update on the IFRS Web site.

At its meeting on July 25-27, 2023, the IASB discussed (i) changes to IAS 36 Impairment of Assets relating to the impairment test of cash-generating units containing goodwill (impairment test); and (ii) aspects of its package of proposed disclosure requirements for IFRS 3 Business Combinations. The IASB tentatively decided to clarify certain new proposed wording. It also tentatively decided to require an entity to disclose the reportable segments in which cash-generating units containing goodwill are included. The IASB also tentatively decided to explain the difference between management monitoring ‘strategically important’ business combinations for the purpose of subsequent performance disclosure and management monitoring a business associated with the goodwill for the purpose of impairment testing. The IASB tentatively decided to propose the prospective IFRS Accounting Standard Subsidiaries without Public Accountability: Disclosures be amended after its issue to require an eligible subsidiary to disclose quantitative information about expected synergies, subject to the same exemption proposed for an entity applying IFRS 3 in this project. Finally, the IASB also tentatively decided to provide unlisted entities that apply full IFRS Accounting Standards with no exemptions from disclosing information about the subsequent performance of business combinations.

Re­view the IASB Update on the IFRS Web site.

At its meeting on July 25-27, 2023, the IASB decided to expand the project’s scope by adding five application questions that are considered resolved by its tentative decisions made to date.

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At its meeting on July 25-27, 2023, the IASB discussed stakeholder feedback on discount rates for provisions within the scope of IAS 37—specifically, on whether to include non-performance risk in the risks reflected in the rates. IASB members provided views on which of four possible approaches to amending IAS 37 they would like to pursue further in response to the stakeholder feedback. The IASB tentatively decided to specify that: (i) the expenditure required to settle an obligation comprises the costs that relate directly to settling the obligation; and (ii) the costs that relate directly to settling an obligation consist of both: (a) the incremental costs of settling the obligation; and (b) an allocation of other costs that relate directly to settling obligations of that type.

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At its meeting on July 25-27, 2023, the IASB discussed stakeholder feedback on suggested ways to improve disclosures about an entity’s exploration and evaluation expenditure and activities. These suggestions included making information available that might help users of financial statements: (i) understand how entities account for exploration and evaluation expenditure; (ii) compare entities with different accounting policies for exploration and evaluation expenditure; and (iii) understand the risks and uncertainties of entities’ exploration and evaluation activities.

Re­view the IASB Update on the IFRS Web site.