Research Programme

Date recorded:

Research programme - project update

The Senior Director Technical Activities highlighted the following topics which were further detailed in Agenda Paper 8A:

  • Emission Trading Schemes: He indicated that two staff had been allocated to the project and that they started working with EFRAG and IPSASB. He further indicated that EFRAG was reviewing existing practices in Europe and the topic was on the agenda of the world standard setters in London.
  • Foreign currency translation/high inflation: He mentioned that this topic had been a long standing issue and they expected to bring two papers. One paper on foreign currency would be presented to the IASB’s meeting to be held in October 2014, the other paper would be presented at the ASAF meeting later this week by the Brazilian standard-setter and based on work that had been done by GLASS on high inflation. Out of this a paper is expected to be presented to the Board before the end of 2014.
  • Income Tax: He mentioned that two staff had been allocated to the project and they started working on the scope of the project to be run out of the IFRS Foundation’s Asia-Oceania office. He indicated that they plan to have discussions with the Capital Markets Advisory Committee in February 2015.

One Board member asked staff to confirm whether there was a new research project on performance reporting. The Senior Technical Director responded that it was not a separate research project.

Another Board member mentioned a topic discussed at the latest IFRS IC meeting which he had observed related to IFRIC 21. He mentioned that the issue was related to the accounting for the debit side of the liability. He expressed concern that, currently, there was no comprehensive project on expenses while there was a comprehensive standard on revenue. He mentioned that expenses relate to a variety of assets, for example, IAS 2 Inventories or IAS 16 Property, Plant and Equipment, and further analysis was needed. He acknowledged that the IFRS IC was not in position to handle this issue. He suggested including this topic in the agenda consultation.

The Senior Technical Director responded that they currently had a full agenda and he believed that it was up to the Board to decide whether or not to add a topic in a research project.


Research Project: post-employment benefits - accounting for new pension plan designs

The Project Manager introduced the agenda paper. The purpose of the paper was to provide information about the background to a research project on post-employment benefits and the staff’s suggestions for a preliminary scope and approach. She indicated that they were planning to publish a Research Paper during 2015 to discuss a robust model. However, they had not yet decided whether to consider a post implementation review (PIR) of IAS 19. She also mentioned that the IFRS IC had attempted before to develop a solution for plans including CBP (contribution-based promises) but the issue had been considered too broad. She indicated that due to the complexity of the topic they were not planning to bring a discussion paper, rather they were planning to bring a research paper. The staff approach would include gathering information about trends and characters of new types of plans and related accounting issues through interviews with interested parties.

One Board member asked whether the project would include measurement of all types of liabilities for pension plans. The Project Manager confirmed that it would cover all types of liabilities. The Board member expressed agreement with the staff approach to cover all types of liabilities because he believed that this would be the only way to analyse this topic. He further indicated that it would not be necessary to look at all types of plans offered around the world and have every single one of them discussed in the project; instead, he believed it would be necessary to develop a set of principles applicable to all plans (that were available now and in the future). He said that he would expect the paper to answer, for example, whether the valuation model for insurance contracts would work for pensions because of noted similarities. 

Some Board members expressed concern as to whether a research project or a PIR project would be the best way to address this issue. They would prefer to have a Discussion Paper even though it could take longer than a research project and would require more involvement from the Board.  

Another Board member indicated that they should have a proper discussion before moving forward with a project that will analyse all pension plans. Another Board member agreed with this concern and indicated that, for example, in the UK they had a long term project on pensions that lasted at least seven years.


Business combinations under common control - update on the research project

The Senior Technical Manager introduced the agenda paper. In June 2014, the Board discussed the scope of the research project and tentatively decided that the project should consider:  (a) business combinations under common control that are currently excluded from the scope of IFRS 3 Business Combinations; (b) group restructurings; and (c) the need to clarify the description of business combinations under common control, including the meaning of 'common control'.

In July 2014, the staff had reached out to regional and national standard-setters and had asked them to provide information about the requirements in their jurisdictions for the financial information to be reported by an entity that is undertaking an initial public offering of its securities. The Senior Technical Manager indicated that the purpose of this information was to document current requirements and assess diversity in practice. They had so far received 14 responses. The staff would bring an analysis of the responses in next Board meeting to be held in October.

One Board member indicated agreement with narrowing the scope. He asked the staff whether they had asked about transactions related to preparation for an IPO because there could be confidentiality issues, particularly during the preparation of an IPO there could be instances where information is not public. The Senior Director responded that he did not consider that it could be a confidentiality issue on that area that could affect the issue discussed.

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