Date recorded:

The IASB met in London over three days, from Monday 20 to Wednesday 22 June 2022. 

Primary Financial Statements

The IASB decided to add a requirement that additional subtotals and line items that are presented in the statement(s) of financial performance in accordance with paragraph 42 of the ED fit into the structure of the proposed categories. The IASB also decided to withdraw the proposal to specifically prohibit columns when presenting MPMs in the statement(s) of financial performance.

Maintenance and consistent application

In November 2010, the IFRS Interpretations Committee asked the IASB to consider amending IAS 1 to clarify when a liability should be classified as current or non-current. That request led to exposure draft (EDs) in 2012 and 2015 and an amendment in 2020. The effective date of the 2020 amendment was deferred pending further clarifications. In November 2021, the IASB published new amendments with the comment period ending in March 2022. At this meeting the IASB decided to finalise the latest amendments, although not the proposal to require an entity to present separately non-current liabilities with covenants. The IASB also decided to defer the 2020 amendments again, to align them with the effective date of these new, additional, amendments, which would be no earlier than annual reporting periods beginning on or after 1 January 2024.

Post-implementation Review of IFRS 9

The IASB continued to consider feedback from the Request for Information (RFI) Post-implementation Review—IFRS 9 Financial Instruments—Classification and Measurement. At this meeting, the IASB discussed feedback in relation to equity instruments and other comprehensive income. No decisions were made.

Second Comprehensive Review of the IFRS for SMEs Standard

This was the last public decision-making meeting for this project. The IASB granted permission for the staff to prepare the ED and are proposing a comment period of 180 days.

Disclosure Initiative—Subsidiaries without Public Accountability: Disclosures

The IASB decided to proceed to finalise the draft Standard and not to publish a ‘catch-up’ ED that considers amendments to (and new) IFRS Accounting Standards issued after 28 February 2021 before finalising the Standard. The staff will develop a plan for deliberating the feedback on the ED.

Business Combinations under Common Control

The IASB discussed whether some or all BCUCCs are similar to or differ from IFRS 3 BCs. The staff recommended that assessing whether some or all BCUCCs are similar to or differ from IFRS 3 BCs and assessing the information needs of users will help the IASB tentatively decide whether conceptually the acquisition method or a book-value method should apply to some or all BCUCCs. The IASB was not asked to make any decisions.

Equity Method

At its April 2022 meeting, the IASB discussed possible approaches to the application question and asked the staff to develop its analysis further applying its preferred approach, being that after obtaining significant influence, an investor measures its additional interests in an associate as an accumulation of purchases. The IASB decided that in applying this approach, while retaining significant influence, an investor purchasing an additional interest that is a bargain recognises the bargain purchase gain separately in profit or loss. The IASB rejected the staff recommendation that an investor making a partial disposal determines the portion of the carrying amount of an investment in the associate to be derecognised by applying a specific identification method, if the investor can identify the specific portion of the investment being disposed of and its cost, or the last-in first-out (LIFO) method. The staff will consider whether a different method will be recommended to the IASB.

Contractual Cash Flow Characteristics

In May 2022, the IASB decided to start a standard-setting project to clarify particular aspects of the IFRS 9 requirements for assessing a financial asset’s contractual cash flow characteristics (i.e. the ‘solely payments of principal and interest’ (SPPI) requirements). The staff set out the proposed objective, scope and an indicative timeline for the project. The proposed objective of this project would be to make clarifying amendments to the application guidance in IFRS 9 to enable the consistent application of the SPPI requirements and to consider whether additional disclosure requirements are needed. The staff plan is for the IASB to consider potential clarifications during the second half of 2022 and publish an ED in the first quarter of 2023. The staff confirmed that the project would not change the mechanics of the effective interest rate method (EIR) but would clarify how to apply the EIR to these instruments.

Financial Instruments with Characteristics of Equity

The IASB has been discussing feedback on the Discussion Paper (DP) published in June 2018, for which the comment period closed in January 2019. IAS 32 has no general requirements on reclassification between financial liabilities and equity instruments and there is diversity in practice when there are changes in the substance of the contractual terms without a modification to the contract such that reassessment would result in a different classification outcome from that initially assessed. The IASB decided to add general requirements on reclassification to IAS 32 to prohibit reclassification other than for changes in the substance of contractual terms arising from changes in circumstances outside the contract. The IASB did not support the staff recommendation to account for a reclassification at the beginning of the first reporting period after the change. The IASB instead decided that the change would be recognised in the period it occurs. It also decided that on reclassification from equity to financial liability, a financial liability would be measured at fair value at the date of reclassification and any difference between the carrying amount of the equity instrument and the fair value of the financial liability would be recognised in equity; and on reclassification of a financial liability to equity, an equity instrument is measured at the carrying value of the financial liability at the date of reclassification and no gain or loss is recognised. The IASB decided to add disclosure requirements for these circumstances.

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