The podcast features dis­cus­sions related to:

• Disclosure initiative;
• Business combinations under common control;
• IBOR (phase 2);
• Amendments to IFRS 17.

The podcast can be accessed through the press release on the IASB website. More in­for­ma­tion on the topics discussed is available through our com­pre­hen­sive notes taken by Deloitte observers at the February IASB meeting.

Amendments to IFRS 17 Insurance Contracts The Board continued its discussion of topics and decided:

• Contractual service margin attributable to investment services (to finalise the amendments proposed, with some changes)
• Level of aggregation—annual cohorts for insurance contracts with intergenerational sharing of risks between policyholders (to retain the requirement in IFRS 17).
• Applicability of the risk mitigation option—non-derivative financial instruments at fair value through profit or loss (that the risk mitigation option be extended for insurance contracts with direct participation features in IFRS 17:B115)
• Minor editorial and consequential amendments (to finalise them with minor changes).
• Additional specific transition modifications and reliefs (to extend, amend and add modifications to the modified retrospective approach).
• For other topics raised by respondents to the Exposure Draft Amendments to IFRS 17 the Board decided to amend the proposal only to resolve an inconsistency between that paragraphs and IFRS 17:B65(m) and IFRS 17:B66(f) and not for any of the other matters raised.

IBOR Reform and the Effects on Financial Reporting The Board completed its discussions of proposed amendments that respond to IBOR reform and decided to:

• Limit the scope of the amendment and clarify that a change in the basis on which the contractual cash flows are determined that alters what was originally anticipated constitutes a modification of a financial instrument in accordance with IFRS 9;
• Propose temporary relief for hedging relationships that are amended to reflect modifications directly required by the reform;
• Set out how the amendments are applied when transition to an alternative benchmark rate occurs for classification and measurement of financial instruments; hedge accounting; lease accounting; and disclosures. The separately identifiable requirement for risk components will cease applying 24 (rather than 12) months after the date that the alternative benchmark rate was designated as a risk component for hedge accounting purposes. These amendments should be mandatory and not voluntary.
• Have an effective date of annual periods beginning on or after 1 January 2021 with earlier application permitted, and be applied retrospectively.

The ED is expected to be published in April, with a comment period of 45 days.

Disclosure Initiative—Targeted Standards-Level Review of Disclosures The Board continued its discussions of potential revisions to the disclosure requirements in IFRS 13 and decided that the disclosure requirements in IFRS 13 be amended to:

• refer to significant drivers of change in the objective;
• require an entity to disclose a reconciliation from opening to closing balances of recurring fair value measurements categorised within Level 3 of the fair value hierarchy;
• state that an explanation by an entity of significant drivers of change in fair value measurements other than those classified in Level 3 of the fair value hierarchy might be necessary for it to meet the disclosure objective.

Disclosure Initiative—Accounting Policies The staff presented a summary of the feedback received on the proposal to amend IAS 1 (or its proposed replacement, see https://www.iasplus.com/en/projects/major/pfs)  to require the disclosure of ‘material’ rather than ‘significant’ accounting policies and to add guidance on how to assess whether an accounting policy is material. No decisions were made.

Business Combinations under Common Control The Board approved all of the disclosure requirements recommended by the staff to accompany the acquisition and predecessor approaches for a BCUCC. The Board will publish the proposals in a DP, which the staff will prepare.

The staff gave an update on recent activities of the IFRS Interpretations Committee.

The Board decided not to finalise the proposed amendments to IFRIC 14 related to Availability of a Refund.

The Board will consider as part of the 2020 Agenda Consultation whether to include the subject as a potential project.

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

The seven minute podcast can be accessed through the press release on the IASB website. Our summary of the meeting and the results of the IASB's votes is available here.

Below is an analysis of all changes made to the work plan since our last analysis on 31 January 2020.

Stan­dard-set­ting projects

• Disclosure initiative — Subsidiaries that are SMEs — Project has been retitled to indicate that the project is now considered as part of the disclosure initiative. No expected date is given on the current stage in the process.

Main­te­nance projects

• Accounting policy changes (amendments to IAS 8) — A decision on the project direction is expected in the second quarter of 2020.
• Availability of a Refund (Amendments to IFRIC 14) — the Board decided at its February 2020 meeting not to finalise the amendment, however, Board members could not reach a conclusion on whether to take this matter forward in a different context or format.
• Disclosure initiative — Accounting policies — the Board discussed feedback on its exposure draft in its February 2020 meeting and removed the expected date for this stage from the work plan.

Research projects

• Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 — Research review is expected in March 2020 (previously February 2020).

Other projects

• Due Process Handbook — the revised Due Process Handbook is expected in April 2020.

The above is a faithful com­par­i­son of the IASB work plan at 31 January 2020 and at 28 February 2020. For access to the current IASB work plan at any time, please click here.

Item for Continuing Discussion

IFRS 16 Leases—Sale and leaseback with variable payments (Agenda Paper 2): As requested by Committee members in the November meeting, the staff analyse the seller-lessee's subsequent accounting for the liability arising from a sale and leaseback transaction. The staff recommend that, regarding the accounting of such a sale and leaseback transaction at the date of the transaction, the Committee not develop an Interpretation. However, they do recommend that the IASB propose an Annual Improvement that clarifies how the seller-lessee measures the lease liability.

New Issue

IAS 12 Income Taxes—Deferred tax related to a subsidiary's undistributed profits (Agenda Paper 3): Should an entity recognise deferred tax for the temporary differences arising from undistributed profits of a subsidiary? The staff think that deferred tax should be recognised and recommend that the Committee publish a tentative agenda decision explaining why neither an interpretation of, or amendment to, IAS 12 is necessary.

Agenda Decisions to Finalise

IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 29 Financial Reporting in Hyperinflationary Economies—Translation of a hyperinflationary foreign operation (Agenda Paper 4): The staff recommend finalising all three agenda decisions, with some amended wording.

IFRS 15 Revenue from Contracts with Customers—Training costs to fulfil a contract (Agenda Paper 5): The staff recommend finalising an amended agenda decision to confirm that training costs incurred by a supplier in relation to revenue contracts are in the scope of IAS 38 and must be expensed as incurred.

Work in progress (Agenda Paper 6)

There are no new matters that have not yet been presented to the Committee.

The full agenda for the meeting can be found here. We will update this page for any changes to the agenda and our Deloitte pre-meet­ing summaries for the meeting as they become available.

The report provides information on the current reporting environment, the benefits of accruals in the public sector, lessons learned during the implementation phase, and key findings and recommendations.

For more information, see the press release on the IFAC’s website.

The ITCG discussed the following:

• IFRS Taxonomy modelling for the Exposure Draft General Presentation and Disclosures.
• Review of common reporting practice related to:
  • Primary financial statements.
  • IAS 19 Employee Benefits.
  • IFRS 7 Financial Instruments: Disclosures.
• Review of the IFRS Taxonomy supporting material.
• Update on the IFRS Taxonomy strategy.

For more in­for­ma­tion, see the summary on the IASB’s website.

The statement includes eight actions which accountants are called upon to take in response to the climate emergency. It also includes commitments from the bodies themselves in support of their members. The call to action highlights that climate change represents an economic, social and business risk – a risk that accountants from across the world must take action on.

Please click to access the call to action on the A4S website.

The proposed new standard is intended to replace IAS 1 Presentation of Financial Statements.

In its draft comment letter, EFRAG

• supports the IASB's proposals to present an operating, investing and financing category in the statement of profit or loss to improve comparability and reduce diversity in practice, but has reservations over some of the proposals in the ED;
• expresses the view that separate presentation of integral and non-integral associates and joint ventures will result in relevant information for users of financial statements and enhance comparability, but will involve significant judgement and needs to be tested in practice;
• welcomes the IASB's efforts to provide guidance on management performance measures but highlights a number of challenges in regard to the ED proposals and also mentions the possibility of an alternative narrower scope; and
• welcomes the IASB's efforts to define unusual income and expenses and to require entities to disclose such items in the notes, but notes that the definition of unusual items seems to be rather narrow.

Comments on EFRAG's draft comment letter are requested by 19 June 2020. For more information, see the press release and the draft comment letter on the EFRAG's website.

The Trustees are seeking new SMEIG members from all geographical regions and are particularly interested in candidates who use the financial statements of small and medium-sized entities (investors and providers of finance). They will be appointed from 1 July 2020 and would serve three-year terms. Nominations for membership of the SMEIG close on 20 March 2020. Please click for the IASB press release (link to IASB website).