IFRS Interpretations Committee holds September 2022 meeting
19 Sep, 2022
The IFRS Interpretations Committee (Committee) met on 13 September 2022. The Committee discussed three comment letter analyses on tentative agenda decisions and an item for input on an IASB project.
Comment letters on tentative agenda decisions
IFRS 17 Insurance Contracts and IAS 21 The Effects of Changes in Foreign Exchange Rates—Multi-currency Groups of Insurance Contracts: In June 2022, the Committee published a tentative agenda decision in response to a submission about how to account for insurance contracts that generate cash flows in more than one currency. Most of the respondents agreed (or did not disagree) with the Committee’s conclusion regarding the identification of portfolios of insurance contracts. 11 out of 18 respondents agreed (or did not disagree) with the Committee’s conclusions regarding the measurement of a multi-currency group of insurance contracts and 7 respondents expressed concerns that an entity could develop a multi-currency accounting policy. The Committee decided to finalise the agenda decision with some edits to the text.
Special Purpose Acquisition Companies (SPAC): Accounting for Warrants at Acquisition: In March 2022, the Committee published a tentative agenda decision on how an entity accounts for warrants on acquiring a SPAC. Most respondents agreed (or did not disagree) with the technical analysis and conclusions but raised concerns about the potential unintended consequences. The Committee decided to finalise the agenda decision with some edits to the text.
IFRS 9 Financial Instruments and IFRS 16 Leases— Lessor Forgiveness of Lease Payments: In March 2022, the Committee published a tentative agenda in response to the submission about a lessor’s application of IFRS 9 and IFRS 16 in accounting for a particular rent concession for which the only change to the lease contract is the lessor’s forgiveness of lease payments due from the lessee under that contract. 11 out of 23 respondents agreed with the analysis of the Committee but requested clarification on some aspects of the analysis while 11 respondents disagreed with the Committee’s analysis and conclusion. The Committee decided to finalise the agenda decision with some edits to the text.
Input on IASB project
Amendments to IAS 21—Lack of Exchangeability: In April 2021, the IASB published Exposure Draft ED/2021/4 Lack of Exchangeability, which proposed amendments to IAS 21. The purpose of the project is to assess the need to add requirements on how an entity determines whether a currency is exchangeable into another currency and the accounting requirements to apply when it is not. To assist the staff in developing recommendations for the IASB, the staff is asking Committee members for their views on one of the proposals in the ED—determining the spot exchange rate when exchangeability is lacking. The Committee members generally considered the paper is useful and helpful and gave suggestions/comments on some aspects of the recommendations to the ED.
Matters reported to the IASB: The staff have reported several of the Committee’s matters to the IASB but have not identified any matters to recommend for further discussion by the Committee. There were various matters that the IASB is considering as part of its work plan, may consider as part of its future work plan or considered and decided (or tentatively decided) not to add to the work plan.
Work in progress: There are no new matters that have not been presented to the Committee.
More Information
Please click to access the detailed notes taken by Deloitte observers.