IASB meeting — 14–16 November 2016

Start date:

End date:

Location: London

IASB (International Accounting Standards Board)

The IASB met in public on Monday 16, Tuesday 17 and Wednesday 18 November 2016.

Monday 14 November

Last month the Board started its detailed discussions of feedback received on its proposed Practice Statement on materiality. The Board continued those discussions, focusing on errors; covenants; stewardship; recognition and measurement, whether it should apply to entities applying the IFRS for SMEs Standard; and the status and form of the guidance.

There was a mixed response to the staff recommendations, with some being supported by the Board while others were not. The staff expect to conclude the main discussions next month.

Tuesday 15 November

The Board continued its discussions on the Conceptual Framework, focusing on the definition of a liability and the effects of the proposed changes to the Conceptual Framework on preparers. The Board supported using the proposal included in the ED in the final version of the Framework.

The Board discussed its project on Primary Financial Statements. The staff have been gathering evidence about perceived problems with the presentation of the primary financial statements and to understand stakeholders’ views on the areas that need improvement. The discussions were exploratory, with the Board not being asked to make any technical decisions.

The Board gave the staff clearance to start balloting process on a proposed annual improvements in relation to IFRS 9 Financial Instruments and IAS 28 Investments in Associates and Joint Ventures on the impairment of long-term interests and a narrow scope amendment to IAS 16 Property, Plant and Equipment in relation to accounting for proceeds from testing an asset.

Wednesday 16 November

The Board continued its discussions on the development of a discussion paper on financial instruments with the characteristics of equity, this week focusing on puttable instruments. The Board agreed that the planned Discussion Paper should propose that, if the so-called Gamma approach is used, the exception to categorise puttable instruments as equity should be retained.

The meeting concluded with a discussion of the Insurance Contract project and the draft of what will become IFRS 17 Insurance Contracts. The staff have been undertaking fieldwork, the results of which were discussed at this meeting. Also, as a result of insights gained from the fieldwork, the staff proposed some changes to the current draft in relation to changes in the carrying amount of the contractual service margin (CSM) for experience adjustments; transition; and the effects of financial risk when an entity applies the variable fee approach (VFA) and mitigates that risk with a derivative. Several other sweep issues will also be discussed.

The Board supported all of the changes proposed, including setting the effective date so that the Standard will apply the annual periods beginning on or after 1 January 2021. That date is predicated on the assumption that IFRS 17 is issued in the first half of 2017.

The draft of IFRS 17 will be revised and undergo a fatal flaw review with selected external parties.

Agenda for the meeting

Monday, 14 November 2016 (14:15–17:30)

  • Disclosure initiative: Materiality
    • Errors
    • Covenants
    • Stewardship
    • Recognition and measurement
    • Entities applying the IFRS for SMEs
    • Status and form of the guidance

Tuesday, 15 November 2016 (10:00–16:15)

  • Conceptual framework
    • Summary of tentative decisions
    • Liability definition and supporting concepts
    • Testing the proposed asset and liability definitions — illustrative examples
    • Effects of the proposed changes to the Conceptual Framework on preparers
  • Primary financial statements
    • Analysis of financial statements presentation
    • Use of performance measures
    • Literature review
    • Summary of outreach on scope of project
    • Ten possible approaches presented during outreach
  • IFRS implementation issues
    • IFRS 9 / IAS 28 — Long-term interests (due process steps)
    • Property, plant and equipment — Proceeds before intended use (due process steps)

Wednesday, 16 November 2016 (11:30–17:15)

  • Financial instruments with characteristics of equity
    • Summary of discussions to date
    • Exception in Paragraphs 16A – 16D of IAS 32
  • Insurance contracts
    • Methodology - external testing of draft IFRS 17
    • Results - external testing of draft IFRS 17
    • Level of aggregation
    • Experience adjustments
    • Transition issues
    • Mitigating financial risks reflected in insurance contractsOther sweep issues
    • Mandatory effective date of IFRS 17

Agenda papers for this meeting are available on the IASB's website.

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