IFRS Interpretations Committee meeting — 27 November 2018

Start date:

End date:

Location: London


IFRS IC meeting (blue)


The IFRS Interpretations Committee met in London on 27 November 2018 to discuss seven issues, including five new interpretation requests.

Continuing discussions

The Committee continued its discussions from September on whether, some, cloud computing arrangements create an intangible asset. The Committee decided not to take the matter onto its Agenda and issue a tentative Agenda Decision to that effect.

In September, the Committee finalised an Agenda Decision IAS 21 The Effects of Changes in Foreign Exchange Rates—foreign exchange restrictions. At this meeting the Committee provided feedback on a proposal by the staff to amend IAS 21 to provide additional guidance on estimating an exchange rate.

New issues

IFRS 11 Joint Arrangements—Output received by a joint operator. The Committee decided that when the output a joint operator receives in a reporting period is different from the output to which it is entitled, the joint operator recognises revenue that depicts the transfer of output to its customers in each reporting period, ie revenue recognised applying IFRS 15.

IFRS 9 Financial Instruments—Physical settlement of contracts to buy or sell a non-financial item. The Committee decided that when an entity contracts to buy or sell a non-financial item in the future at a fixed price, it is not appropriate at the time of physical settlement for an entity to (a) reverse the accumulated gain or loss previously recognised in profit or loss on the derivative, and (b) recognise a corresponding adjustment to either revenue (in the case of a sale contract) or inventory (in the case of a purchase contract).

IAS 23 Borrowing Costs—Revenue recognised over time. The Committee decided that borrowing costs would not be capitalised when the borrowings relate to the construction of a residential multi-unit real estate development for which revenue is recognised over time.

IFRS 9 Financial Instruments—Credit enhancement in ECL measurement. The Committee decided that if a credit enhancement is required to be recognised separately by IFRS Standards, an entity cannot include the cash flows expected from it in the measurement of ECL.

IFRS 9 Financial Instruments—Presentation of contractual interest. The Committee decided that the reversal of the unwinding of discount is presented as a reversal of credit impairment when the asset is cured.

The Committee decided not to take any of these issues onto its agenda and tentative Agenda Decisions to that effect will be published shortly (each with a 60-day comment period).

Other work in progress

The staff are analysing a request in relation to subsurface rights.


Agenda for the meeting

TUESDAY, 27 November 2018

Morning session (9:00-12:30)

  • Opening remarks and administrative matters
  • New issues:
    • IFRS 11 — Output received by a joint operator
    • IFRS 9 — Physical settlement of contracts to buy or sell a non-financial item
    • IAS 23 — Over time transfer of constructed good
  • Items for continuing consideration:
    • IAS 38 — Customer’s right to access the supplier’s software hosted on the cloud

Afternoon session (13:30-16:50)

  • New issues (continued):
    • IFRS 9 — Credit enhancement in measurement of ECL
    • IFRS 9 — Presentation of contractual interest
  • Items for continuing consideration (continued):
    • IAS 21 — Lack of exchangeability
      • Definition of exchangeability
      • Requirements on exchangeability
  • Administrative session:
    • Work in progress

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

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