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Overview

Date recorded:

The IASB met on Tuesday 22 and Wednesday 23 June 2021, by video conference. 

This was the last meeting with Hans Hoogervorst as Chair.

The following topics were on the agenda:

Board work plan update: The staff provided an update of its activities. The Board completed amendments to: IAS 8 (Definition of Accounting Estimates); IAS 1 (Disclosure of Accounting Policies); IFRS 16 (Covid-19-Related Rent Concessions beyond 30 June 2021); and IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction).

At future meetings, the Board will be asked whether it wants to add projects for the interaction of IFRS 10 and IFRS 16 (sale of a subsidiary with a leaseback) and amendments to IFRS Practice Statement 2 relating to information about possible future events that have not affected the entity’s financial performance or financial position and have uncertain outcomes, similar to the proposals in the Exposure Draft Management Commentary.

The Board currently has six consultation documents open for comment and expects to publish in the next six months an Exposure Draft on disclosure by subsidiaries without public accountability and a Request for Information as part of its post-implementation review of the classification and measurement requirements in IFRS 9.

Board members provided no comments.

Initial application of IFRS 17 and IFRS 9: In May, the Board discussed an accounting mismatch between financial assets and insurance contract liabilities that could arise at the beginning of the comparative period on transition to IFRS 17 when financial assets have been derecognised during the comparative period. The Board decided to propose a narrow-scope amendment to IFRS 17 to permit an entity to apply a classification overlay in the comparative period(s) presented on initial application of IFRS 17 and IFRS 9. The proposal will have a 60-day comment period (which the Trustees have approved).

Equity Method—Identifying the principles in IAS 28 Investments in Associates and Joint Ventures:  The staff have identified what they consider to be the principles in IAS 28, and principles they say are missing. They plan to use the analysis to address application questions. They do not intend incorporating the principles into IAS 28.

Goodwill and Impairment: The Board reaffirmed the project’s objective and scope.   

Primary Financial Statements: The Board decided to require that, if a numerator or a denominator of a ratio meets the definition of an MPM, that numerator or denominator should be included in the scope of the MPM requirements in order to ensure all subtotals of income and expenses used in communicating performance are in the scope of MPMs. The Board decided not to explore expanding the scope of MPM to include measures based on line items presented in the statement(s) of financial performance, the cash flow statement, the statement of financial position or ratios. 

Maintenance and Consistent Application:

The IASB met on Tuesday 22 and Wednesday 23 June 2021, by video conference. 

This was the last meeting with Hans Hoogervorst as Chair.

The following topics were on the agenda:

Board work plan update: The staff provided an update of its activities. The Board completed amendments to: IAS 8 (Definition of Accounting Estimates); IAS 1 (Disclosure of Accounting Policies); IFRS 16 (Covid-19-Related Rent Concessions beyond 30 June 2021); and IAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction).

At future meetings, the Board will be asked whether it wants to add projects for the interaction of IFRS 10 and IFRS 16 (sale of a subsidiary with a leaseback) and amendments to IFRS Practice Statement 2 relating to information about possible future events that have not affected the entity’s financial performance or financial position and have uncertain outcomes, similar to the proposals in the Exposure Draft Management Commentary.

The Board currently has six consultation documents open for comment and expects to publish in the next six months an Exposure Draft on disclosure by subsidiaries without public accountability and a Request for Information as part of its post-implementation review of the classification and measurement requirements in IFRS 9.

Board members provided no comments.

Initial application of IFRS 17 and IFRS 9: In May, the Board discussed an accounting mismatch between financial assets and insurance contract liabilities that could arise at the beginning of the comparative period on transition to IFRS 17 when financial assets have been derecognised during the comparative period. The Board decided to propose a narrow-scope amendment to IFRS 17 to permit an entity to apply a classification overlay in the comparative period(s) presented on initial application of IFRS 17 and IFRS 9. The proposal will have a 60-day comment period (which the Trustees have approved).

Equity Method—Identifying the principles in IAS 28 Investments in Associates and Joint Ventures:  The staff have identified what they consider to be the principles in IAS 28, and principles they say are missing. They plan to use the analysis to address application questions. They do not intend incorporating the principles into IAS 28.

Goodwill and Impairment: The Board reaffirmed the project’s objective and scope.   

Primary Financial Statements: The Board decided to require that, if a numerator or a denominator of a ratio meets the definition of an MPM, that numerator or denominator should be included in the scope of the MPM requirements in order to ensure all subtotals of income and expenses used in communicating performance are in the scope of MPMs. The Board decided not to explore expanding the scope of MPM to include measures based on line items presented in the statement(s) of financial performance, the cash flow statement, the statement of financial position or ratios. 

Maintenance and Consistent Application:

IFRS Interpretations Committee Agenda Decisions

No Board members objected to the publication of two agenda decisions: Costs Necessary to Sell Inventories (IAS 2) and Preparation of Financial Statements when an Entity is No Longer a Going Concern (IAS 10).

Supplier Finance Arrangements

The Board decided to start a narrow-scope standard-setting project on supplier finance arrangements to add qualitative and quantitative disclosure requirements to IAS 7, and ‘sign-posts’ to existing disclosure requirements in IFRS 7. The requirements would explain the type of arrangements within its scope, rather than include specific definitions.

Classification of Debt with Covenants as Current or Non-current (IAS 1)

The Board decided to amend IAS 1 to specify that, if the right to defer settlement for at least twelve months is subject to an entity complying with conditions after the reporting period, then those conditions do not affect whether the right to defer settlement exists at the end of the reporting period (the reporting date) for the purposes of classifying a liability as current or non-current. There would be additional disclosure requirements and ‘non-current liabilities subject to conditions that need to be met within one year’ would need to be presented separately in the primary financial statements. As a consequence, the Board also decided to defer the effective date of the 2020 amendments by one year.

An analysis of how the work plan of the IASB has changed as a result of this meeting is available here.

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