Annual Improvements 2009

Date recorded:

The staff presented an item it proposed to be included in the annual improvements process 2009. IFRIC 13 requires consideration received or receivable to be allocated between award credits and other components of a sale. The allocation must be done by reference to fair value. If fair value for the awards credits is not directly observable, it must be estimated. This could be done by reference to the awards redeemable. As fair value both refers to the value of the award credits and the value of the awards to be redeemed, this could be interpreted to mean that both fair values are equal. To avoid any confusion the staff recommended addressing this issue via the annual improvements process and proposed some wording that was omitted from the observer notes. The Board agreed. One Board member asked to avoid using the term 'redemption value' as this is in some jurisdictions, for legal reasons, a cash amount close to zero.

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