Pre-meeting summaries for the February 2023 IASB meeting

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17 Feb, 2023

The IASB meets in London on 20–23 February 2023. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. We summarised the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

The following topics are on the agenda.

Maintenance and consistent application

The IASB will make its final decisions on supplier finance arrangements and lack of exchangeability, and will discuss potential items for the next annual improvements cycle.

Supplier Finance Arrangements—The staff recommend that the effective date for the amendments should be for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted. The staff also recommend that the IASB does not require disclosure of comparative information for prior periods in the annual reporting period it first applies the amendments. Further, the staff recommend that the IASB does not require the disclosure of certain quantitative information in an entity’s first annual financial statements after the amendments become effective.

Lack of ExchangeabilityThe staff recommend that the IASB proceed with the amendments to IFRS 1 as proposed in the ED but make no amendments to IFRS 13. The staff also recommend that the IASB should require an entity to apply the amendments for annual reporting periods beginning on or after 1 January 2025, with earlier application permitted.

Annual Improvements to IFRS Accounting Standards—The staff recommend that the IASB propose amendments relating to the following items in its next Annual Improvements cycle: hedge accounting by a first-time adopter (IFRS 1); determination of a ‘de facto agent’ (IFRS 10); transaction price (IFRS 9); cost method (IAS 7); gain or loss on derecognition (IFRS 7); credit risk disclosures (IFRS 7).

Post-implementation Review of the IFRS 9 Impairment Requirements

The IASB will discuss which items to include in the upcoming Request for Information (RFI) on the post-implementation review of the IFRS 9 impairment requirements. The staff recommend the following topics: general approach to recognition of expected credit losses (ECL); determining significant increase in credit risk; measurement of ECL; purchased or originated credit-impaired financial assets; simplified approach for trade receivables, contract assets and lease receivables; loan commitments and financial guarantee contracts; interaction between ECL and other requirements; transition; and objective-based disclosure requirements. The IASB will be asked to approve the publication of, and set a comment period for, the RFI at a future meeting.

Rate-regulated Activities

The IASB will redeliberate the proposals on recognition and total allowed compensation in the Exposure Draft Regulatory Assets and Regulatory Liabilities. The staff make specific recommendations with regard to the recognition threshold, enforceability and recognition and performance incentives.

Dynamic Risk Management

The IASB will discuss whether financial assets measured at FVOCI or FVPL are eligible for inclusion in the concept of current net open risk position (CNOP). The staff recommend that financial assets measured at FVOCI are eligible for designation in the CNOP, while financial assets measured at FVPL are not eligible for designation in CNOP. The staff also recommend not requiring the retrospective assessment against an entity’s target profile, and only keep the retrospective assessment to check whether the entity has mitigated interest rate risk during the assessment period when applying the DRM model. In addition, the staff recommend the introduction of another retrospective assessment based on the entity’s capacity to realise the expected benefits.

Financial Instruments with Characteristics of Equity

The IASB will make decisions related to the classification and presentation of issued financial instruments applying IAS 32 and IAS 1. The staff make specific recommendations with regard to the fixed-for-fixed condition, reclassification, the effects of laws on contractual terms, obligations to redeem own equity instruments, and presentation of financial liabilities and equity instruments.

Business Combinations—Disclosure, Goodwill and Impairment

The IASB will decide on certain aspects of the proposed package of new disclosures, focusing on the application of the ‘management approach’, how long information should be required for, changing metrics, use of ranges, and key objectives.

Our pre-meeting summaries are available on the February meeting notes page and will be supplemented with our popular meeting notes after the meeting.

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