IFRS Interpretations Committee holds March 2021 meeting

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19 Mar, 2021

The IFRS Interpretations Committee met via video conference on 16 March 2021. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

The Committee discussed one comment letter analysis on a tentative agenda decision and two new issues.

Comment letter analysis

IAS 38 Intangible Assets—Configuration or Customisation Costs in a Cloud Computing Arrangement: In December 2020, the Committee discussed the accounting for a customer's costs of configuring or customising the supplier's application in a ‘Software as a Service’ (SaaS) arrangement. The staff concluded that no intangible asset is recognised in the fact pattern described and the customer should refer to requirements in IFRS 15 for the identification of services and timing of recognition. The Committee members generally agreed with the analysis but they raised some comments on the analysis of services rendered by a third-party supplier. The Committee decided to finalise the agenda decision with some edits to address the concerns raised.  

New issues

IFRS 16 Leases—Non-refundable VAT on Lease Payments: The Committee members generally agreed that non-refundable value-added tax (VAT) is not part of lease payments and there was little diversity in practice with regard to the accounting treatment. However, they recommended that the staff should wait for feedback from comment letters before reaching the conclusion that such matter is not material or widespread. The Committee decided not to add the matter to the Committee’s standard-setting agenda and publish a tentative agenda decision.

IAS 32 Financial Instruments: Presentation—Accounting for Warrants that are Initially Classified as Liabilities: All Committee members agreed that the matter described, in isolation, is too narrow for the Committee to address in an efficient manner. The Committee decided not adding a standard-setting project for the matter submitted and instead publish a tentative agenda decision to explain this. Also, the Committee members supported that the reclassification of financial instruments is a broader issue and that there is diversity in practice which should be addressed as part of the FICE project.

More In­for­ma­tion

Please click to access the detailed notes taken by Deloitte observers.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.