Date recorded:

Amendments to IFRS 17 Insurance Contracts The Board continued its discussion of topics and decided:

  • Contractual service margin attributable to investment services (to finalise the amendments proposed, with some changes)
  • Level of aggregation—annual cohorts for insurance contracts with intergenerational sharing of risks between policyholders (to retaining the requirement in IFRS 17).
  • Applicability of the risk mitigation option—non-derivative financial instruments at fair value through profit or loss (that the risk mitigation option be extended for insurance contracts with direct participation features in IFRS 17:B115)
  • Minor editorial and consequential amendments (to finalise them with minor changes).
  • Additional specific transition modifications and reliefs (to extend, amend and add modifications to the modified retrospective approach).
  • For other topics raised by respondents to the Exposure Draft Amendments to IFRS 17 the Board decided to amend the proposal only to resolve an inconsistency between that paragraphs and IFRS 17:B65(m) and IFRS 17:B66(f) and not for any of the other matters raised.

IBOR Reform and the Effects on Financial Reporting The Board completed its discussions of proposed amendments that respond to IBOR reform and decided to:

  • Limit the scope of the amendment and clarify that a change in the basis on which the contractual cash flows are determined that alters what was originally anticipated constitutes a modification of a financial instrument in accordance with IFRS 9;
  • Propose temporary relief for hedging relationships that are amended to reflect modifications directly required by the reform;
  • Set out how the amendments are apply when transition to an alternative benchmark rate occurs for classification and measurement of financial instruments; hedge accounting; lease accounting; and disclosures. The separately identifiable requirement for risk components will cease applying 24 (rather than 12 months) after the date that the alternative benchmark rate was designated as a risk component for hedge accounting purposes. These amendments should be mandatory and not voluntary.
  • Have an effective date of annual periods beginning on or after 1 January 2021 with earlier application permitted, and be applied retrospectively.

The ED is expected to be published in April, with a comment period of 45 days.

Disclosure Initiative—Targeted Standards-Level Review of Disclosures The Board continued its discussions of potential revisions to the disclosure requirements in IFRS 13 and decided that the disclosure requirements in IFRS 13 be amended to:

  • refer to significant drivers of change in the objective;
  • require an entity to disclose a reconciliation from opening to closing balances of recurring fair value measurements categorised within Level 3 of the fair value hierarchy;
  • state that an explanation by an entity of significant drivers of change in fair value measurements other than those classified in Level 3 of the fair value hierarchy might be necessary for it to meet the disclosure objective.

Disclosure Initiative—Accounting Policies The staff presented a summary of the feedback received on the proposal to amend IAS 1 (or its proposed replacement, see https://www.iasplus.com/en/projects/major/pfs) to require the disclosure of ‘material’ rather than ‘significant’ accounting policies and to add guidance on how to whether an accounting policy is material. No decisions were made.

Business Combinations under Common Control The Board approved all of the disclosures requirements recommended by the staff to accompany the acquisition and predecessor approaches for a BCUCC. The Board will publish the proposals in a DP, which the staff will prepare.

The staff gave an updates on recent activities of the IFRS Interpretations Committee. The Board decided not to finalise the proposed amendments to IFRIC 14 related to Availability of a Refund. 

The Board will consider as part of the 2020 Agenda Consultation whether to include the subject as a potential project.

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