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IASB Meeting — 28-30 January 2020

Start date:

End date:

Location: London

IASB (International Accounting Standards Board)

The IASB met on 28–30 January 2020 to discuss twelve topics.

Overview

Provisions: The Board decided to add a project to amend IAS 37 to align the IAS 37 liability definition and requirements for identifying liabilities with the Conceptual Framework (including potentially withdrawing IFRIC 21); clarifying which costs to include in the measure of a provision; and specifying whether the rate at which an entity discounts a provision for the time value of money should reflect the entity’s own credit risk.

Amendments to IFRS 17 Insurance Contracts: The Board discussed some of the topics for which it had decided to consider the feedback from respondents further:

  • the scope exclusion from IFRS 17 for some credit card contracts (decided to confirm the proposed scope exclusion with some changes);
  • Transition—the prohibition from applying the risk mitigation option retrospectively (decided to retain, unchanged);
  • Business combinations—contracts acquired in their settlement period (decided to retain, unchanged);
  • Interim Financial Statements (decided to change the requirements); and
  • Asset for insurance acquisition cash flows—transition and business combinations (decided to change the requirements).

IBOR Reform and the Effects on Financial Reporting: The Board considered, and supported, the  recommendation from the staff in relation to the end of application of the Phase 1 exceptions from specific hedge accounting requirements in IFRS 9 and IAS 39 in the context of interest rate benchmark reform (IBOR reform); the potential effects of IBOR reform on IFRS Standards other than those related to financial instruments accounting; and potential disclosure requirements to accompany the tentative decisions the Board has made during Phase 2 of the IBOR project.

Pension Benefits that Depend on Asset Returns: The Board supported the direction the staff are taking in the project to consider amending IAS 19 to cap the projected cash flows when benefits vary with the level of returns on specified assets, so that they do not exceed the discount rate specified by IAS 19. The change would be to address the inconsistency in IAS 19 that the variability (risk) in the future asset returns is reflected only in the cash flows and not in the discount rate applied to those cash flows.

Disclosure Initiative: The Board continued its discussions of potential revisions to the disclosure requirements in IAS 19 and decided to refine some of its tentative decisions relating to defined benefit plans, multi-employer plans and group plans. 

IFRS 3 reference to the Conceptual Framework: The Board decided to finalise the amendments to update the references to the Conceptual Framework in IFRS 3 with an effective date of the amendments of 1 January 2022. The new references would apply to business combinations that occur in any annual reporting period starting after that date, with earlier application permitted.

Subsidiaries that are SMEs: The Board decided to develop an ED as soon as possible proposing reduced disclosure requirements for subsidiaries that are SMEs.

Business Combinations under Common Control: The Board has decided that the acquisition method, as set out in IFRS 3, should be required for listed acquirers that have NCI. They have received feedback from some sectors that a predecessor approach should apply to all common-control business combinations. The staff recommend no change to the decisions already made.  The staff also set out their recommendations for recognition and measurement applying a predecessor approach.

The staff gave updates on:

  • the feedback received on the proposed update to the IFRS Taxonomy to reflect the amendments made to IFRS Standards in 2019 in response to IBOR reforms;
  • the ED for rate-regulated activities (publication of the ED is now expected in the second half of 2020 rather than in Q2);
  • work being undertaken on research projects and the research pipeline; and recent activities of the IFRS Interpretations Committee.

 

Agenda for the meeting

Tuesday 28 January 2020

Morning session (11:00-12:30)

  • Subsidiaries that are SMEs
    • Moving the project to the standard-setting programme

Wednesday 29 January 2020

Afternoon session (14:00-18:00)

  • Business combinations under common control
    • Update on when each measurement approach would apply
    • Predecessor approach – consideration and presentation in equity
  • Pension benefits that depend on asset returns – Project update
  • Implementation matters
    • IFRIC Update
  • Disclosure initiative: Targeted standards-level review of disclosures
    • IAS 19 — Expected future cash flows for defined benefit plans
    • Comparison between the Board’s tentative decisions and the disclosure requirements on IAS 19 Employee Benefits

Thursday 30 January 2020

Morning session (09:30-12:20)

  • Reference to the Conceptual Framework (Amendments to IFRS 3)
    • Transition, effective date and due process
  • Provisions
    • Project proposal
    • Research summary
  • Research programme update
  • Rate-regulated activities update
  • IBOR reform and the effects on financial reporting
    • Phase 1 end of relief
    • Other IFRSs
    • Disclosures

Afternoon session (13:20-16:05)

  • Amendments to IFRS 17 Insurance Contracts
    • Scope exclusion for credit cards
    • Transition — prohibition from applying the risk mitigation option retrospectively
    • Business combinations — contracts acquired in their settlement period
    • Interim financial statements
    • Insurance acquisition cash flows — transition and business combinations requirements
  • Taxonomy – IBOR Update

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

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