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IASB meeting — 24–25 October 2017

Start date:

End date:

Location: London

IASB (International Accounting Standards Board)

Overview

The IASB met in public on Tuesday 24 and Wednesday 25 October 2017. 

Tuesday 24 October

The meeting started with an education session on goodwill and impairment. As an education session the staff did not ask for decisions from the Board. The Board has been considering how to make the goodwill impairment test more effective but less costly to perform. At this meeting the staff sought feedback on three issues. The first is whether there should be a single model for measuring the recoverable amount of the CGU (fair value less costs to sell or value in use) and whether to factor “dynamic headroom” into the impairment assessment. The second is whether to provide relief from the mandatory annual impairment testing of goodwill and whether to change how value in use is estimated. The third is the adequacy of the information disclosed about goodwill.  Several Board members expressed concerns about the expanding scope of the project and that this was intended to be a narrow scope project responding the post-implementation review. Accordingly, the next step is likely to be an exposure draft and not a discussion paper.

In September the Board tentatively decided to propose amending IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to lower the impracticability threshold for retrospective application of voluntary changes in accounting policies that result from agenda decisions. The Board decided to proceed with the proposal with a 120-day comment period. They expect to issue the proposal in the first quarter of 2018.

The session on rate-regulated activities focused on feedback from the World Standard-Setters Conference held in late September 2017. Although the group was generally supportive, several specific concerns were raised. The project consultative group meets on 26 October.

The Board approved the finalisation of the update to the IFRS Taxonomy for IFRS 17 Insurance Contracts. However, the lack of any formal comment letters was noted.

The day concluded with a discussion of the definition of a business. The staff have been analysing six differences between the proposed IASB definition and the FASB’s revised definition (which has already been finalised).  The Board decided to finalise the amendments which are expected to be published in the first half of 2018, for business combinations that are in an annual reporting period on or after 1 January 2020.

Wednesday 25 October

The Board supported the staff recommendation to include within the scope of the project on business combinations under common control group restructurings that are not business combinations.

The last agenda item was Conceptual Framework. The current draft underwent a fatal flaw review and the staff have been bringing issues to the Board from that review. There were two issues being discussed at this meeting. The first relates to the definition of a liability and concerns that the words “no practical ability to avoid as a going concern” captures future costs. The Board agreed with the staff analysis that they are from drafting issues rather than a flaw in the Board’s decisions. The second issue is the lack of clarity of the link between stewardship and the objective of financial reporting. The Board rejected the staff recommendation to include a flowchart in Chapter 1 of the revised Conceptual Framework to illustrate the link between the objective of general purpose financial reporting and the information needed to meet that objective.

 

 

Agenda for the meeting

Tuesday 24 October 2017

Morning session (10:15–12:15)

  • Goodwill and impairment (education session)
    • Improving effectiveness of the impairment testing model in IAS 36
    • Possible simplifications to the impairment testing model in IAS 36
    • Improving disclosures about goodwill and impairment

Afternoon session (13:15–15:15)

  • IFRS implementation issues
    • Accounting Policy Changes (Amendments to IAS 8) — due process steps
  • Rate-regulated activities
    • Reporting case study feedback (September 2017 WSS meeting)
    • Agenda for the consultative group for rate regulation meeting
  • IFRS Taxonomy Update — IFRS 17
    • Finalisation of the changes to the IFRS Taxonomy
  • Definition of a business
    • Comparison between FASB Amendments and IASB tentative decisions
    • Summary of the Board’s tentative decisions
    • Due process followed

Wednesday 25 October 2017

Morning session (9:00–10:45)

  • Business combinations under common control
    • Scope of the project
  • Conceptual framework
    • Sweep issue — concepts supporting the liability definition
    • Sweep issue — a flowchart for chapter 1

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

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