IASB meeting — 20–21 September 2017

Start date:

End date:

Location: London

IASB (International Accounting Standards Board)

The IASB met in public on Wednesday 20 and Thursday 21 September 2017.

Wednesday 20 September

The meeting began with a continuation of the background sessions designed to help the Board understand dynamic risk management. This session focused on prepayment risk and the concept of capacity (whether an entity has enough hedged items against which derivatives could be designated in a hedging relationship).

The Board discussed three implementation projects:

  • The Board is moving forward with an Exposure Draft to amend IAS 8 to make it easier to apply a change in accounting policy arising from an agenda decision prospectively.
  • The Board decided to finalise its proposed amendments to IAS 19 on plan amendments, curtailment or settlement amendments, but not the proposed amendments to IFRIC 14 in relation to the availability of a refund.
  • The Board decided to complete the 2015-2017 Cycle of its Annual Improvements: IAS 12 the income tax consequences of dividends; IAS 23, when specific borrowing remains outstanding after completion of the asset; and IFRS 3 and IFRS 11 the initial measurement when an entity gets control of a joint operation. The IFRS 3 and IFRS 11 amendments were exposed separately, but will be completed as part of Annual Improvements. The IASB expects to issue the amendments in December 2017.

The day concluded with a continuation of the discussions on rate-regulated activities. This session focused on initial measurement when an entity incurs costs in excess of estimates and the regulatory agreement allows the entity to recover these costs over more than one reporting period by increasing the rate charged. The Board supported taking into account the time value of money when measuring the regulatory asset, but there were mixed views about how to account for an entitlement to earn a return. 

Thursday 21 September

The Board discussed business combinations under common control, for the first time since April 2016. The session was a recap of previous discussions. The Board expressed a preference for keeping the scope of the project narrow. The staff plan to bring papers back to the Board with the goal of developing a Discussion Paper for release in 2018.

The Board was given a brief update on the research programme.

The Board continued its discussions on primary financial statements. The Board decided to give priority to developing an EBIT subtotal over developing a management performance measure—they plan to use the term ‘profit before financing and income tax’ rather than EBIT. The Board also supported introducing an investing category into the statement of financial performance, although it would not be the same as the ‘investing activities’ category in the cash flow statement. The Board did not support the staff proposal that cash and cash equivalents should be used as a proxy for cash and temporary investments of excess cash that form part of capital structure. 

The papers also look at the requirement in IAS 1 to disclose expenses by nature or function.  The Board decided that the choice be retained but that more guidance on how to select the most appropriate method should be provided in the Standard. That guidance would suggest that by nature is likely to provide more useful information when an entity is unable to allocate natural components to functions on a consistent and non-arbitrary basis.

The last agenda item was Conceptual Framework. The current draft has been undergoing a fatal flaw review. In that draft, the Basis for Conclusions alludes to the trade-off between relevance and faithful representation, but the Framework does not have an explicit principle, or any guidance on how to assess any such trade-off. This was identified as a weakness by reviewers. The Board decided that the Framework should acknowledge the trade-off but they will not add any guidance on how to make that trade-off when it sets Standards.



Agenda for the meeting

Wednesday 20 September 2017 (10:30–16:15)

  • Dynamic risk management (education session)
  • IFRS implementation issues
    • Accounting policy changes — Proposed threshold and timing challenge
    • Availability of a refund and Plan amendments, curtailment or settlement — Effects of IFRIC 14 amendments and finalising IAS 19 amendments
    • Annual Improvements to IFRS Standards 2015-2017 Cycle — Due Process Steps
  • Rate-regulated activities (education session)

Thursday 21 September 2017 (10:15–16:30)

  • Business combinations under common control (education session)
  • Research update — Update on the research programme
  • Primary financial statements — Targeted improvements to the statement of financial performance
  • Conceptual framework — Sweep issue: measurement uncertainity and the fundamental qualitative characteristics of useful financial information

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

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