Date recorded:

The IASB met on Tuesday 27, Wednesday 28 and Thursday 29 October 2020, by video conference.

Board work plan update: This was the first periodical update of the work plan, replacing the research update. The staff have been reviewing the timing of consultation documents and recommend some changes to the timing of consultations (such as delaying the Management commentary ED until May 2021) and extending some comment periods (such as for the DP on BCUCC), all of which the Board supported. The work plan on the IFRS Foundation website was updated after the meeting.

2020 Agenda consultation: The IASB is preparing to issue a Request for Information (RFI) in the first quarter of 2021, as part of the public consultation on its work plan that it is required to undertake every five years. The Board decided that the RFI describe 27 potential projects identified from outreach undertaken.

Maintenance and consistent application — Deferred tax related to assets and liabilities arising from a single transaction: In July 2019, the Board published an ED proposing amendments to IAS 12. The Board confirmed the proposal to narrow the scope of the recognition exemption so that it will not apply to transactions that give rise to equal amounts of taxable and deductible temporary differences. The Board also decided to remove the capping proposal.  

Management commentary: This was the last decision-making meeting for the ED. The Board gave the staff permission to begin the formal drafting and balloting processes. The staff papers included the working draft of their guidance on the provision of information about matters that could affect an entity’s long-term prospects, intangible resources and relationships, and ESG matters, but this was to elicit feedback rather than seeking any formal decisions. The ED is expected to be published in May 2021.

Extractive activities: The staff presented findings on the diversity of accounting policies applied to exploration and evaluation expenditure within the scope of IFRS 6. The staff’s research indicates that diversity is primarily due to the extent to which an entity recognises exploration and evaluation expenditure incurred during the reporting period as an asset and the unit of account that an entity decides to apply to its exploration and evaluation expenditure asset. Most of the entities in the sample use area of interest accounting.  The ‘full cost’ and successful efforts methods are the most common accounting policies for oil and gas companies not applying ‘area of interest’ accounting. The Board was not being asked to make any decisions. Board members mentioned that a potential solution could be to amend IFRS 6 by requiring further disclosures but that the staff have to increase engagement with financial statement users for a better understanding of the disclosures that they would consider relevant.

Equity method: Work on reviewing aspects of IAS 28 began in May. The Board decided that the objective of this review be to assess whether application problems with the equity method for associates and joint ventures can be addressed by identifying and explaining the principles of IAS 28. The Board decided not to consider whether the equity method is a one-line consolidation method or a measurement method, whether it should be replaced by one of the measurement bases in the Conceptual Framework or whether significant influence should be the basis for when to apply the equity method.

Disclosure initiative — Subsidiaries that are SMEs: The IASB is developing a Standard setting out reduced disclosure requirements for subsidiaries apply IFRS Standards but meet the definition of an SME. At this meeting the IASB decided on how entities will communicate that they have applied the reduced disclosure requirements and how the disclosure requirements of IAS 8 should be applied by these entities.

The staff gave an oral update on Dynamic Risk Management (DRM). The staff is setting up meetings to discuss the DRM model with 25 banks from different jurisdictions between now and the end of January 2021. The staff expect to present the feedback from this outreach to the Board in March or April 2021. The Board will then decide the project direction.

The staff gave an oral update on the IFRS Taxonomy, and the proposed updates (PTU/2019/1 Interest Rate Benchmark Reform—Amendments to IFRS 9, IAS 39 and IFRS 7 and PTU/2020/2 Amendments to IFRS 17, Extension of the Temporary Exemption from Applying IFRS 9 and Property, Plant and Equipment—Proceeds before Intended Use). Concerns continue to be raised about the paucity of comment letters (only one was received for PTU/2019/1 and none for PTU/2020/2).

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