December

IFRS Interpretations Committee holds November 2022 meeting

05 Dec, 2022

The IFRS Interpretations Committee (Committee) met on 29 November 2022. The Committee discussed one new item, six potential annual improvements to IFRS Accounting Standards and an item for input on an IASB project.

New item: IFRS 16 Leases—Definition of a Lease: Substitution Rights: The Committee received a submission about how to assess whether a contract contains a lease applying IFRS 16 when the supplier has particular substitution rights and at what level an entity evaluates whether that right is substantive. The contract in the fact pattern is for the use of 100 similar assets. The supplier has the practical ability to substitute alternative assets throughout the period of use but is expected to benefit economically from the exercise of its right to substitute only after some time into the period of the lease. The Committee members generally agreed with the staff conclusion that there is an identified asset because the supplier’s substitution right is not substantive but had various comments on how the tentative agenda decision analyses it and reaches that conclusion. Most of the Committee members agreed that the level to evaluate whether the substitution right is substantive is on each asset. The Committee voted in favour of not adding a standard-setting project to the work plan and instead to publish a tentative agenda decision, with the drafting amended to take comments into consideration that have been raised by Committee members during the meeting.

Potential annual improvements to IFRS Accounting Standards: The Committee members shared their views on the staff’s preliminary views on the following six proposed amendments to IFRS Accounting Standards and to include them in the next annual improvements cycle:

  • IFRS 1 First-time Adoption of International Financial Reporting Standards—terminology update
  • IFRS 10 Consolidated Financial Statements—'De facto agent’ assessment
  • IFRS 9 Financial Instruments—terminology update
  • IAS 7 Statement of Cash Flows—terminology update
  • IFRS 7 Financial Instruments: Disclosures—reference update
  • IFRS 7 Financial Instruments: Disclosures—implementation guidance

Input on IASB project: Post-implementation Review (PIR) of IFRS 15 Revenue from Contracts with Customers: The IASB has started the PIR of IFRS 15 which aims at assessing whether the effects of applying new requirements on users of financial statements, preparers, auditors and regulators are as intended when the IASB developed those requirements. The Committee members shared their views on the implementation and ongoing application of IFRS 15, including the matters that the Committee members think the IASB should consider in the PIR of the Standard.

Work in progress: There are two new matters that have not been presented to the Committee.

More In­for­ma­tion

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

December 2022 IASB meeting agenda posted

02 Dec, 2022

The IASB has posted the agenda for its next meeting, which will be held in its office in London on 13–15 December 2022. There are eight topics on the agenda.

The Board will discuss the following:

  • Goodwill and im­pair­ment
  • Maintenance and consistent application
  • Financial instruments with characteristics of equity
  • Equity method
  • Rate-regulated activities
  • Digital financial reporting strategy
  • Work plan update
  • Disclosure initiative — Subsidiaries without public accountability: Disclosure

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries, as well as observer notes from the meeting on this page as they become available.

December 2022 ISSB meeting agenda posted

02 Dec, 2022

The ISSB has posted the agenda for its meeting, which will be held in Montréal on 13–15 December 2022. There are three topics on the agenda.

The Board will discuss the following:

  • General Sus­tain­abil­ity-re­lated Dis­clo­sures (S1)
  • ISSB Consultation on Agenda Priorities
  • Cli­mate-re­lated Dis­clo­sures (S2)

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries, as well as observer notes from the meeting on this page as they become available.

IASB issues podcast on latest Board developments (November 2022)

02 Dec, 2022

The IASB has released a podcast featuring IASB Chair Andreas Barckow and Executive Technical Director Nili Shah discussing deliberations at the November 2022 IASB meeting.

Highlights of the podcast include discussions on the following: 

  • the IASB’s decision to retain impairment-only approach for goodwill accounting;
  • a new accelerated project proposing narrow-scope amendments to the IAS 12;
  • the project direction of the supplier finance arrangements projects;
  • the post-implementation review of IFRS 9 — Classification and Measurement; and
  • short updates on the following projects:
    • Business combinations under common control,
    • Subsidiaries without public accountability: Disclosures,
    • Dynamic risk management,
    • Rate-regulated activities, and
    • Primary financial statements.

The podcast (14 minutes) can be accessed through the press release on the IFRS Foundation’s website.

Please click to view the detailed notes taken by Deloitte observers for the IASB meeting.

IFRS Foundation issues Formula Linkbase 2022

02 Dec, 2022

The IFRS Taxonomy formula linkbase can help with validating and improving the reliability of values reported using the IFRS Accounting Taxonomy and the XBRL technical format.

The IFRS Taxonomy formula linkbase 2022 is an update of the 2021 version and accompanies the IFRS Accounting Taxonomy 2022.

For more information and access to the linkbase, please see the press release on the IFRS Foundation website website.

DPOC approves shortened comment period for OECD Pillar Two proposals

01 Dec, 2022

At a supplementary meeting held today, the Due Process Oversight Committee (DPOC) discussed a potential shortened comment period for an exposure draft of proposed amendments to IAS 12 'Income Taxes' that would introduce a temporary exception from accounting for deferred taxes arising from the implementation of the OECD Pillar Two rules and targeted disclosures requirements for affected companies. The IASB expects to publish an exposure draft in January 2023.

While approval was unanimous in the end, questions of DPOC members included if the IASB had been slow in developing the proposed amendment and what timeframe the IASB had in mind when declaring the proposed exemption would be "temporary".

The IASB Chair explained that the IASB rather than being slow to react had in fact been as fast as possible. While the OECD released the rules in December 2021, the IASB had little alternative to monitoring developments until jurisdictions began implementing them. The developments suddenly picked up speed and the IASB reacted by, in one meeting only, discussing the required amendments holistically and developing the proposals.

The dependency on external developments also became clear in the answer regarding the meaning of "temporary" - until jurisdictions have finished implementing the rules, the IASB cannot consider the implications. The IASB Chair acknowledged, however, that it might be a good idea to consider including a review clause when finalising the amendments around the temporary exemption- to keep the perceived "vacuum" of information as short as possible.

While DPOC members finally agreed to shortening the comment period from 120 to 60 days ("a short, but sufficient comment letter period"), they also stressed that their decision was supported by the fact that the IASB's proposed amendments would help the OECD in getting the Pillar Two rules implemented in jurisdictions.

A recording of the session is available on the IFRS Foundation website.

 

IVSC perspectives paper on automated valuation

01 Dec, 2022

The International Valuation Standards Council (IVSC) has published a perspectives paper 'Automated Valuation Models and Residential Valuations'.

In the paper, the first in a planned series looking at automated valuation models (AVM), the IVSC looks at the current International Valuation Standards (IVS) and the question whether a residential AVM can ever produce an IVS compliant valuation.

The paper can be accessed through the press release on the IVSC website.

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