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Discount Rates [Research]

Next steps:

The Board plans to issue a project summary in Q4/2018

Last updated:

July 2018

Overview

A discount rate is a rate that is used to determine the present value of future cash flows. Present value techniques serve to measure the fair value, value in use or other current value of an asset or a liability, as a method for initial or subsequent measurement.

This project resulted from constituent feedback in the Agenda Consultation 2011.  Constituents commented that the reason for differences in discount rate requirements under various International Financial Reporting Standards (IFRS) is not well understood and could be considered inconsistent.

The project is expected to: (i) examine differences in the discount rate requirements in IFRS; (ii) explain why those differences exist; and (iii) assess whether there are inconsistencies that should be addressed by the IASB.

The research on discount rates focuses on reviewing measurements that already require use of present value techniques and for which the objective of measurement is not fair value. This review includes: present value measurement objectives set in individual standards; discount rate components included in the present value measurement; measurement methodology; disclosure requirements; and definitions and terms used.

Standards that include requirements in relation to discount rates include:

Other developments

July 2018

On July 18, 2018, the IASB® staff updated the work plan to indicate that the Board plans to issue a project summary in Q4/2018.

May 2018

On May 25, 2018, the IASB staff updated the work plan to indicate that the Board expects to issue a Research Summary in Q3/2018.

March 2018 

On March 23, 2018, the IASB® staff updated the work plan to indicate that the Board expects to issue a Research Summary in June 2018.

January 2018

On January 26, 2018, the IASB Staff updated this project to indicate that the IASB now expects to issue a Research Summary in Q2/2018. 

July 2017

On July 21, 2017, the staff of the IASB updated the work plan to indicate that the IASB expects to issue a Research Summary in the first half of 2018.

June 2017

In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue a Research Summary in September 2017.

March 2017

On March 23, 2017, the IASB staff updated the Work Plan in respect of this project to indicate that this project is now in a drafting stage and that the IASB expects to publish a Research Summary by September 2017.

December 2016

On December 15, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish a Research Summary by June 2017.

September 2016

On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish a Research Summary by March 31, 2017.

July 2016

On July 20, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish a Research Summary sometime before January 31, 2017.

October 2015

The IASB Work Plan for October 30, 2015 updated the planned next steps for this project.

December 2012

This project was added to the IASB’s Work Plan as a research project.

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