IFRIC Matters

Date recorded:

Report of the November IFRIC meeting

The Director of IFRIC and Implementation Activities made an oral report of the IFRIC meeting held 5-6 November 2009 (click for Deloitte Observers' Notes of that meeting).


Ratification of IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

The staff introduced the text of the final Interpretation and accompanying Basis for Conclusions as approved by the IFRIC and explained the changes made to the draft Interpretation D25 as a result of comments received from constituents.

The Board discussed several aspects of the Interpretation, but spent most time on the issue of partial settlements and the basis on which the entity would apportion the fair value of equity instruments issued for the debt extinguished. The Board resisted suggestions that the IFRIC provide more definitive guidance, suggesting that there is existing guidance on how to account for modifications of financial liabilities and how to allocate consideration over multiple elements. In addition, a Board member noted that there are 'natural barriers' that would prevent bad accounting.

The Board ratified IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments, which had been exposed as Draft IFRIC Interpretation D25. One Board member was opposed.

This summary is based on notes taken by observers at the joint IASB-FASB meeting and should not be regarded as an official or final summary.

The IASB publishes summaries of the deliberations at Board meetings in its newsletter IASB Update. Past issues of IASB Update are available on IASB's Website. On Individual Project Pages on the IASB Website you will find links to observer notes and excerpts from IASB Update relating to that project.

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