Administrative session

Date recorded:

IFRS Interpretations Committee work in progress

The staff provided the Committee with an update on the current status of issues that are in progress but not to be discussed during the Committee’s May 2013 meeting. The Committee deferred work on three new issues and nine outstanding issues. All such issues will be discussed at future meetings.

Work in progress that will be discussed at future meetings:

  • An IAS 1 request to clarify criteria for the classification of liabilities as current or non-current in paragraph 69(d) of IAS 1 when read with paragraph 73 of IAS 1.
  • An IAS 2 Inventories issue requesting clarification on the accounting for long-term supply contracts of raw materials when the purchaser of the raw materials agrees to make prepayments to the supplier. The Staff are monitoring this issue in the context of developments on the IASB’s revenue recognition project.
  • An IAS 19 issue regarding the accounting for employee benefit plans with a guaranteed return on contributions or notional contributions.
  • An IAS 40 Investment Property issue requesting clarification on whether telecommunication towers in a jurisdiction should be accounted for as property, plant and equipment (under IAS 16) or as an investment property (under IAS 40).
  • An IAS 29 Financial Reporting in Hyperinflationary Economies issue requesting clarification on whether an entity whose functional currency is the currency of a hyperinflationary economy as described in IAS 29 needs to apply IAS 29 to its financial statements prepared under the concept of financial capital maintenance defined in terms of constant purchasing power units rather than nominal monetary units.

Issues on hold:

  • An IAS 39 issue requesting clarification on how the income and expense that results from negative interest rates should be presented in the statement of comprehensive income. The staff have deferred finalisation of this issue pending the completion of the IASB’s financial instruments: classification and measurement project.

Issues received but not yet presented:

  • An IAS 32 issue requesting for guidance on how an issuer should classify a financial instrument (as liability or equity) that is mandatorily convertible into a variable number of the issuer’s own ordinary shares upon a non-viability event (e.g. breach of regulatory capital requirements).
  • An IAS 32 issue requesting for guidance on how an issuer should classify a financial instrument that is settled at maturity by delivery of a variable number of the issuer’s own ordinary shares (subject to a floor and a cap) but the issuer has the option to settle the instrument at any time before maturity by delivering the fixed maximum number of shares.
  • An IFRS 2 issue requesting for guidance on the measurement of cash-settled share-based payment transactions that include a performance condition. According to the submitter, the lack of specific guidance in IFRS 2 is leading to different interpretations and diversity in practice.
  • An IAS 1 issue requesting clarification on how an entity should present its share of the other comprehensive income of associates and joint ventures accounted for using the equity method.
  • An IFRS 3 issue requesting clarification of whether a previously held interest in the assets and liabilities of a joint operation should be remeasured to fair value on acquiring control over the joint operation.
  • An IFRS 10 and IAS 32 issue requesting clarification on how puttable instruments that are non-controlling interests should be classified in consolidated financial statements.
  • A request to provide transitional relief in IFRS 10 and IFRS 11 Joint Arrangements related to the application of IAS 36 Impairment of Assets, IAS 21 and IAS 23 Borrowing Costs.

Other administrative matters

At the beginning of the meeting the Chairman also summarised certain administrative matters in respect of the Committee's activity that came to his attention:

  • there have been many amendments to various standards recently; it might be difficult for constituents to follow and comment; the issue will be discussed with the Board; a potential solution might be to combine several amendments for issue;
  • the constituents have identified many issues to the new standards that have not been through an annual reporting cycle yet; this raises a question of whether the Fatal Flaw process is sufficient; and
  • The IASB’s Chairman has been questioning whether the IASB has ‘kicked back’ too many issues to the Committee. The Committee’s Chairman indicated that he did not think this was the case, but it was something to watch out for in the future.

Four Committee members have finished / terminated their terms.

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