Date recorded:

Maintenance and consistent application

The IASB made its final decisions on supplier finance arrangements and lack of exchangeability, and discussed potential items for the next annual improvements cycle.

Supplier Finance Arrangements—The IASB decided that the effective date for the amendments should be for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted. The IASB also decided not to require disclosure of comparative information for prior periods in the annual reporting period it first applies the amendments. Further, the IASB decided not to require the disclosure of certain quantitative information in an entity’s first annual financial statements after the amendments become effective. The IASB expects to issue the amendments in the second quarter of 2023.

Lack of ExchangeabilityThe IASB decided to proceed with the amendments to IFRS 1 as proposed in the ED but make no amendments to IFRS 13. The IASB also decided to require an entity to apply the amendments for annual reporting periods beginning on or after 1 January 2025, with earlier application permitted. The IASB expects to issue the amendments in the third quarter of 2023.

Annual Improvements to IFRS Accounting Standards—The IASB decided to propose amendments relating to the following items in its next Annual Improvements cycle: hedge accounting by a first-time adopter (IFRS 1); determination of a ‘de facto agent’ (IFRS 10); transaction price (IFRS 9); cost method (IAS 7); gain or loss on derecognition (IFRS 7); credit risk disclosures (IFRS 7).

Post-implementation Review of the IFRS 9 Impairment Requirements

The IASB discussed which items to include in the upcoming Request for Information (RFI) on the post-implementation review of the IFRS 9 impairment requirements. The IASB decided to include the following topics: general approach to recognition of expected credit losses (ECL); determining significant increase in credit risk; measurement of ECL; purchased or originated credit-impaired financial assets; simplified approach for trade receivables, contract assets and lease receivables; loan commitments and financial guarantee contracts; interaction between ECL and other requirements; transition; and objective-based disclosure requirements. The IASB will be asked to approve the publication of, and set a comment period for, the RFI at a future meeting.

Rate-regulated Activities

The IASB redeliberated the proposals on recognition and total allowed compensation in the Exposure Draft Regulatory Assets and Regulatory Liabilities. The IASB made specific decisions with regard to the recognition threshold, enforceability and recognition and performance incentives.

Dynamic Risk Management

The IASB discussed whether financial assets measured at FVOCI or FVPL are eligible for inclusion in the concept of current net open risk position (CNOP). The IASB decided that financial assets measured at FVOCI are eligible for designation in the CNOP, while financial assets measured at FVPL are not eligible for designation in CNOP. The IASB also decided not requiring the retrospective assessment against an entity’s target profile, and only keep the retrospective assessment to check whether the entity has mitigated interest rate risk during the assessment period when applying the DRM model. Instead, the IASB decided the introduction of another retrospective assessment based on the entity’s capacity to realise the expected benefits.

Financial Instruments with Characteristics of Equity

The IASB made decisions related to the classification and presentation of issued financial instruments applying IAS 32 and IAS 1. The IASB made specific decisions with regard to the fixed-for-fixed condition, reclassification, the effects of laws on contractual terms, obligations to redeem own equity instruments, and presentation of financial liabilities and equity instruments.

Business Combinations—Disclosure, Goodwill and Impairment

The IASB decided on certain aspects of the proposed package of new disclosures, focusing on the application of the ‘management approach’, how long information should be required for, changing metrics, use of ranges, and key objectives.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.