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IFRS Interpretations Committee meeting — 8 November 2016

Start date:

End date:

Location: London

IFRS IC meeting (blue)

The IFRS Interpretations Committee met in London on Tuesday 8 November 2016.

Overview

On-going discussions

Interpretation

  • Uncertainty over Income Tax Treatments – Due Process (Agenda paper 4)
    The staff were given clearance to start the process to finalise the Interpretation, which will have an effective date of 1 January 2019.

Finalisation of draft agenda decisions

The IC considered the public feedback on two matters which the IC had tentatively decided not to add to its agenda:

  • IAS 12 Income Taxes: Expected manner of recovery of intangible assets with indefinite useful lives (Agenda Paper 3); and
  • IAS 32 Financial Instruments: Presentation - Written put option over NCI (Agenda Paper 9)

The IC finalised both decisions, and will not add the matters to its agenda.

Tentative decisions

  • IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement – Fees and costs included in the ’10 per cent’ test for the purposes of derecognition (Agenda Paper 2)
    The Staff recommends proposing an annual improvement rather than addressing the matter through an agenda decision.
  • IAS 28 Investments in Associates and Joint Ventures - Assessment of significant influence: Fund manager acting as an agent and holding own investments in the fund (Agenda Pape 11)
    The IC decided not add these issues to its agenda and to issue tentative agenda decisions to that effect.

New issues

The IC discussed five new issues. The IC decided that the following matters should not be taken onto the agenda and will issue tentative agenda decisions to that effect:

  • Commodities - Commodity loans (Agenda paper 10)
  • IFRS 10 Consolidated Financial Statements - Investment Entities—Consolidation of subsidiaries – (Agenda paper 5)
  • IFRS 9 Financial Instruments – modifications /exchanges of financial liabilities that do not result in derecognition (Agenda Paper 6). This paper was included in the September agenda but was not discussed for lack of time.

For the remaining two issues the staff provided their initial analysis and sought feedback from the IC ahead of a discussion by the IASB:

  • IFRS 9 Financial Instruments — Impact of symmetric ‘make whole’ and fair value prepayment options on the assessment of the SPPI condition (Agenda paper 7)
  • IFRS 9 Financial instruments/IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – discontinuation of hedge accounting and business model assessment when a subsidiary is held for sale. (Agenda paper 8)

The IC members expressed a variety of views, but agreed that the topic on discontinuation of hedge accounting required further analysis.

Post-implementation review of IFRS 13 Fair Value Measurement

The IC was asked for initial input on areas the review should cover. Several matters were raised by members. There was particular emphasis on difficulties faced by less developed economies. (Agenda Paper 12)

 

Agenda for the meeting

 

TUESDAY, 8 November 2016

Morning session (09:15-13:10)
  • Opening remarks, administrative matters, and meeting minutes of the September meeting
  • Item for continuing consideration:
    • IFRS 9 and IAS 39 — Fees and costs included in the 10 per cent test for derecognition of financial liabilities
  • Agenda decision to finalise:
    • IAS 12 — Expected manner of recovery of intangible assets with indefinite useful lives
  • Deliberations of comments received:
    • Draft IFRIC IAS 12 — Uncertainty over income tax treatments
  • New issues:
    • IFRS 10 — Investment entity consolidation
    • IFRS 9 — Modification/ exchange gains/ losses of financial liabilities that do not result in derecognition
    • IFRS 9 — Impact of symmetric ‘make whole’ and fair value prepayment options on assessment of the ‘solely payments of principal and interest on the principal amount outstanding’ (SPPI) condition

Afternoon session (14:10-17:35) 

  • New issue:
    • IFRS 5/IFRS 9/IAS 39 — Application of IFRS 9/ IAS 39 relating to transactions of a subsidiary when the subsidiary is held for sale (including application of the business model assessment requirements in IFRS 9)
  • Agenda decision to finalise:
    • IAS 32 — Written put option over NCI
  •  New issue:
    • Commodity loans (an issue not falling into any particular standard)
  • Issue on hold:
    • IAS 28 — Assessment of significant influence: Fund manager acting as an agent and holding own investments in the fund
  • Post implementation review:
    • IFRS 13 Fair Value Measurement
  • Administrative session:
    • Work in progress

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

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