Annual Improvements 2009

Date recorded:

The Board received but did not discuss the Staff's 'Summary of preliminary comment letter analysis, deliberation objective and provisional project plan'. Under the project plan, the staff expects to complete all redeliberations, including any sweep issues, by the March 2009 IASB meeting, allowing the Improvements IFRS to be issued in April 2009.


Comment analysis - Minor issues

The Board agreed the staff's proposed disposition of the following proposals. A majority of respondents concurred with the Board's proposals:

  • Scope of IFRS 2 and revised IFRS 3 (IFRS 2)
  • Disclosures of non-current assets (or disposal groups) classified as held for sale or discontinued operations (IFRS 5)
  • Unit of accounting for goodwill impairment (IAS 36)
  • Additional consequential amendments arising from revised IFRS 3 (IAS 38)
  • Measuring the fair value of an intangible asset acquired in a business combination (IAS 38)

A Board member objected to the staff's proposed amendments to the implementation guidance in IAS 18 with respect to determining whether an entity is acting as a principal or as an agent. The Board member was concerned that the IASB would introduce jurisdictional bias in to its guidance that was neither necessary nor desirable at the level of (non-mandatory) implementation guidance. The Board member would not amend the IG at all. It was unclear whether the Board as a whole concurred with this view.

IAS 7 - Classification of expenditures on unrecognised assets

The Board agreed to modify the amendment to IAS 7 paragraph 16, such that it would state:

16 The separate disclosure of cash flows arising from investing activities is important because the cash flows represent the extent to which expenditures have been made for resources that are recognised as long-term assets and other investments not included in cash equivalents in the statement of financial position. Examples of cash flows arising from investing activities are: (a) ...

A proposal to amend IAS 7 paragraph 32 (not included in the ED) was not approved.

Scope of IFRIC 9 and Revised IFRS 3 (new issue)

The Board agreed that an amendment to paragraph 5 of IFRIC 9 Reassessment of Embedded Derivatives was necessary to clarify that the scope of IFRIC 9 excludes contracts with embedded derivatives acquired in a combination between entities under common control or in the formation of a joint venture. With the revised definition of a 'business' in IFRS 3 (2008), the formation of a joint venture was brought within the scope of IFRIC 9, something that the Board had not addressed specifically as it developed IFRS 3 (2008).

The Board agreed that the scope of IFRIC 9 should be amended to read as follows:

5 This interpretation does not apply to the acquisition of contracts with embedded derivatives in:

a. a business combination;

b. a combination of entities or businesses under common control as described in paragraphs B1-B4 of IFRS 3 Business Combinations (as revised in 2008); or

c. the formation of a joint venture as defined in IAS 31 Interests in Joint Ventures

nor their possible reassessment at the date of acquisition.

So this amendment can be in place in time for the effective date of IFRS 3 (2008) - 1 July 2009 - the Board agreed that it should issue an exposure draft of the proposals for a 30-day comment period (the minimum permitted by the IASB's Due Process Handbook).

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