We comment on six IFRS Interpretations Committee tentative agenda decisions
07 Mar, 2019
We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 23, IAS 38, IFRS 9, and IFRS 11, as published in the November 2018 IFRIC Update.
More information about the issues is set out below:
|
Issue |
Agenda decision supported? |
More information |
|---|---|---|
|
IAS 23 — Over time transfer of constructed good |
Yes |
|
|
IAS 38 — Customer’s right to access the supplier’s software hosted on the cloud |
No, we disagree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda. We note that the agenda decision suggests that all licencing agreements are out of the scope of IFRS 16. We believe that this conclusion is an interpretation of the requirements of IFRS 16.3(e) and of IAS 38.6. |
|
|
IFRS 9 — Credit enhancement in the measurement of expected credit losses |
Yes, we agree with the IFRS Interpretations Committee’s conclusion 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 expected credit losses. However, we note that IFRS Standards do not specifically address when separate recognition of a purchased credit enhancement is required. |
|
|
IFRS 9 — Curing of a credit-impaired financial asset |
Yes |
|
|
IFRS 9 — Physical settlement of contracts to buy or sell a non-financial item |
Yes |
|
|
IFRS 11 — Sales of output by a joint operator |
Yes; we agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda for the reasons set out in the tentative agenda decision, but recommend a change to provide clarity that no revenue or income should be recognised until the output is sold (whether it is revenue from contracts with customers or other income). |
Click to access all our comment letters to the IASB, IFRS Foundation, and IFRS Interpretations Committee.
