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IASB meeting — 15–16 March 2016

Start date:

End date:

Location: London

IASB (International Accounting Standards Board)

The International Accounting Standards Board (IASB) met at its offices in London on 15–16 March 2016.

Five topics were discussed at the March IASB meeting.  The three largest sessions are focusing on the feedback from public consultations:

  • the proposals for providing some temporary relief to entities affected by both IFRS 9 Financial Instruments and the new insurance contracts standard;
  • Conceptual Framework exposure draft; and
  • Agenda Consultation Request for Views.

The remaining sessions focus on work that came out of the post-implementation review of IFRS 3 Business Combinations.

Interaction between IFRS 9 and the new Insurance Contracts requirements

The IASB voted on the direction it will take to address the tension between the implementation of IFRS 9 and the planned new insurance contracts Standard.  The IASB supported providing a temporary exemption from applying IFRS 9 for “qualifying entities”—which is referred to as the deferral approach—but with deferral only being available for a defined period of time.  A reporting entity will need to demonstrate that insurance is their predominant activity, at the reporting entity level.  The Board will continue to work on how to define which entities would qualify.  The overlay approach will also be available, and both this and the deferral approach would be optional. 

Conceptual Framework

The IASB discussed a comprehensive set of papers with feedback on the Conceptual Framework exposure draft. There was some generally positive feedback on some of the proposed revisions to the already completed chapters and to the chapters on reporting entity and the elements.  But the feedback on measurement and OCI was more mixed, with some strongly expressed concerns.  The initial discussions suggest that the views of IASB members are similar to many views expressed in the comment letters—for example, some IASB members think the OCI discussion is helpful whereas others think the IASB should not finalise the performance reporting chapter until they have done more work on the primary financial statements.  The discussion also indicated that we may not have heard the last on prudence or stewardship. 

Agenda consultation

The strongest message coming from this discussion was an acknowledgement by IASB members that they need to take some leadership on setting their work programme and they need to improve how they communicate about their programme.  Our read is that we are likely to see more focus on the Disclosure Initiative, in its new guise as part of a broader Financial Reporting initiative.

Definition of a business

The IASB voted to proceed with an exposure draft of amendments that uses different wording from the equivalent FASB proposal.  The most extended part of the discussion was about the rationale for departing from the FASB wording and causing the words to diverge, which is a matter we highlighted in our pre-meeting summary. 

Goodwill

The discussion on goodwill was extensive and served mainly to highlight the lack of agreement about what problem the IASB is trying to address.  The discussion variously focused on overpayments, and a suggestion from the staff about how a modified “day-zero” impairment test might isolate at least some overpayments, to discussions about introducing a FIFO approach to impairing goodwill.  The staff was asked to continue to develop this work. 

More detailed summaries can be found below, for the individual projects. 

 

Agenda for the meeting


Tuesday, 15 March 2016 (09:00–16:50)

  • Conceptual framework — an overview of comments received on the IASB exposure draft ED/2015/03 Conceptual Framework for Financial Reporting.
  • Insurance and IFRS 9 — summaries of comments and feedback received on the ED, decision making on direction and plan of the project.
  • Definition of a business — wording of the proposed amendments

Wednesday, 16 March 2016 (10:30–15:00)

  • Goodwill and impairment — determining how to improve information provided and whether there is a need to clarify existing requirements for customer relationships
  • Agenda consultation — an analysis of the feedback received in relation to the request for views for the 2015 Agenda Consultation.

Agenda papers for this meeting are available on the IASB's website.

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