This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Review of tentative agenda decisions published in May 2007 IFRIC Update

Date recorded:

The IFRIC confirmed its decisions not to take the following items to the Agenda:

  • IAS 12 Income Taxes - Deferred taxes arising from unremitted foreign earnings
  • IAS 39 Financial Instruments: Recognition and Measurement - Gaming transactions
  • IAS 39 Financial Instruments: Recognition and Measurement - Hedging multiple risks with a single derivative hedging instrument
  • IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - Plan to sell the controlling interest in a subsidiary

In doing so, the IFRIC had suggestions on the wording of the Agenda Decision notices. In particular, when the IFRIC was referring something to the IASB, the staff was asked, wherever possible, to indicate the action that the IFRIC was suggesting (for example, an Annual Improvements Project item, incorporation into a current project, or other). The Agenda Decisions will be published in the July 2007 issue of IFRIC Update.

The IFRIC had more substantive redeliberations on the following items.

  • IAS 39 Financial Instruments: Recognition and Measurement - Hedging future cash flows with purchased options

The IASB staff noted that this issue would be addressed in an IASB Exposure Draft on what risks and cash flows can be designated as hedged risks and hedged portions of risks, expected in the third quarter of 2007. The view in the ED is consistent with the IFRIC's tentative Agenda Decision published in the May 2007 IFRIC Update.

Consequently, the IFRIC revised the reasons for its tentative decision not to take the issue to its agenda. The rationale would now be that the issue is being addressed specifically by an IASB project.

  • IAS 39 Financial Instruments: Recognition and Measurement - Scope of IAS 39.11A

The IFRIC noted the issues raised by commentators critical of the Tentative Agenda Decision. The staff had not yet been able fully to investigate those matters and was therefore not in a position to recommend a particular action.

The IFRIC agreed to defer confirming their Tentative Agenda Decision pending further investigation by the staff. One IFRIC member was concerned that, in the absence of a confirmed agenda decision, there might be the suggestion that any non-financial item with an embedded derivative could be designated at fair value through profit and loss, whereas the Board clearly intended the fair value option to be limited (see IAS 39 BC78).

The July IFRIC Update will contain a 'status report' on this matter.

  • IAS 39 Financial Instruments: Recognition and Measurement – AG33(d)(iii)

The IFRIC noted that the comments received on this Tentative Agenda Decision demonstrated that there was difficulty in this area, which might suggest that guidance should be developed. However, IFRIC members noted that any guidance would be in the nature of Application Guidance, which is beyond IFRIC's terms of reference.

The staff suggested that additional analysis was necessary before it could make an informed recommendation to the IFRIC. In particular, it would revert to the standard-setters who had commented (plus at least one other known to face the issue in its jurisdiction) and the international accounting networks to gain more information and understanding of current guidance and practice.

The IFRIC agreed to defer confirming their Tentative Agenda Decision. The July IFRIC Update will contain a 'status report' on this matter.

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.