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 July 2013 meeting. The Committee deferred work on six new issues and one outstanding issue. All such issues will be discussed at future meetings.

Work in progress that will be discussed at future meetings:

• An IAS 1 Presentation of Financial Statements 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 question is whether the purchaser/supplier should accrete interest on long-term prepayments by recognising interest income/expense, resulting in an increase of the cost of inventories/revenue. The Staff are reviewing this issue in the context of developments on the IASB’s revenue recognition project.
• An IAS 12 Income taxes issue requesting clarifies the accounting for deferred tax assets when an entity: has deductible temporary differences relating to unrealised losses on debt instruments that are classified as available-for-sale financials assets and measured at fair value; is not allowed to deduct unrealised losses for tax purposes; has the ability and intention to hold the debt instruments until the unrealised loss reverses; and has insufficient taxable temporary differences and no other probable taxable profits against which the entity can utilise those deductible temporary differences.
• An IAS 12 Income taxes Request for clarification of the calculation of deferred tax in circumstances in which the entity holds a subsidiary which has a single asset within it. Specifically, the question asked was whether the tax base that was described in paragraph 11 of IAS 12 and used to calculate the deferred tax should be the tax base of the (single) asset within the entity which holds it, or the tax base of the shares of the entity holding the asset.
• 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.
• IFRS 2 Share based payment request for clarification on the classification and measurement of share based payment transactions in which the manner of settlement is contingent on future events. More specifically, the submitter is seeking clarification on how to classify shares based payment transactions for which the manner of settlement is contingent on either: (a) a future event that is outside the control of both the entity and the counterparty; or (b) a future event that is within the control of the counterparty.

Issues on hold:

• An IAS 39 Financial Instruments: Recognition and Measurement issue requesting clarification on how the income and expense that result from negative interest rates should be presented in the statement of comprehensive income. The issue arose from the fact that the demand of investors for ‘safe harbour’ assets has increased to a degree that the yield on some assets (on some of the remaining high quality government bonds) has turned negative. The staff have deferred finalisation of this issue pending the completion of the IASB’s financial instruments: classification and measurement project.

New Issues:

• An IFRS 2 Share-based Payment: IPO dual pricing issue requesting the Committee to clarify how an entity should account for a price differential between the institutional offer price and the retail offer price for shares in an initial public offering (IPO).
• An IFRS 11 Joint Arrangements issue requesting the Committee to provide clarification with respect to the classification of a joint arrangement in which one party is obliged to purchase all of the arrangement’s output. The submitter thinks that the Standard does not specify whether the assessment of whether a joint arrangement is a joint venture or a joint operation should be made at the level of the parties as a group or by each party in isolation.
• An IFRS 11 Joint Arrangements issue requesting the Committee provide clarification with respect to the classification of a joint arrangement in the following circumstances:

1. Under the other facts and circumstances test, do the parties require a contract (i.e. legally enforceable rights and obligations) to purchase substantially all of the output of the arrangement in order to achieve classification as a joint operation?
2. Under the other facts and circumstances test, does the availability of third party finance preclude classification as a joint operation?

• An IAS 17 Leases request for guidance on whether fixed staff costs–employees on payroll who spend all (or substantially all) of their time on the negotiation, arranging and creation of new transactions (leases and loans)–can qualify as "incremental costs" in terms of initial direct costs as specified in IAS17.
• An IFRS 2 Share- based Payments request for guidance on the measurement of cash-settled share-based payment transactions that include a performance condition. This is because according to the submitter, the lack of specific guidance in IFRS 2 is leading to different interpretations and diversity in practice.
• An IFRS 3 Business Combination issue requesting clarification of whether a previously held interest in the assets and liabilities of a joint operation should be premeasured to fair value on acquiring control over the joint operation.

Other administrative matters

At the beginning of the meeting the Chairman introduced four new Committee members. No other matters were discussed.