Discount rates — Agenda Consultation feedback

Date recorded:



The objective of the research project is to examine discount rate requirements in IFRS Standards and assess whether there are any inconsistencies the Board should address.

In previous meetings, the staff presented a number of differences in present value measurement requirements in IFRS Standards. The research also highlighted some inconsistencies in requirements for when to use present value measurement. The Board’s initial discussion revealed areas needing further discussion or clarification, including the relationship between tax and discount rates.

In this meeting, the staff provided an overview of the feedback received on the discount rates research project in the IASB’s 2015 Agenda Consultation.

The constituents who ranked the priority of the project were mixed between high, medium and low priority, with a slight majority for ‘high’. Several respondents stated or implied that the current scope of the project was appropriate.

The staff did not ask the Board any questions in this session.

Board discussion

The discussion focused on the future of the project, given the mixed comments in the Agenda Consultation. The Board discussed the necessity of the project with a majority of Board members proposing at least some output from the project (e.g., education guidance, practice statement) and a minority saying that the project was not needed as the Standards were clear. None of the Board members seemed to support an overarching Standard on discount rates. One Board member asked if the work from the American Academy of Actuaries could be leveraged.

The discussion also touched on negative interest rates. The Board agreed that the issue was very complex and that guidance was needed. One Board member suggested to address the issue in a separate project.

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