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IFRS Interpretations Committee work in progress

Date recorded:

The staff provided the Committee with an update on the current status of issues that are in progress but not to be discussed during the Committee’s November 2012 meeting. The Committee deferred work on five new issues and five outstanding issues which will be discussed at future meetings.

The new issues include:

  • An IFRS 10 Consolidated Financial Statements issue requesting clarification of the concept of ‘protective rights’ in IFRS 10.
  • An IAS 39 issue requesting clarification on the accounting for a convertible feature of a mandatory convertible debenture in a 50:50 joint venture if the conversion does not result in a change of ownership interest in the joint venture.
  • An IAS 28 Investment in Associates issue requesting clarification on whether it is appropriate to apply the scope exception for business combinations under common control by analogy to the acquisition of an interest in an associate or a joint venture from an entity under common control.
  • An IAS 29 Financial Reporting in Hyperinflationary Economies issue requesting clarification about whether IAS 29 is required during hyperinflation when financial statements are prepared in terms of financial capital maintenance, in units of constant purchasing power.
  • An IAS 7 Statement of Cash Flows issue suggesting a change in the classification basis for cash and cash equivalents to be based on the remaining period to maturity as at the statement of financial position date as opposed to the date of the acquisition of the investment.

The outstanding issues include:

  • An IFRS 3 issue requesting clarification on whether an asset with relatively simple associated processes meets the definition of a business in accordance with IFRS 3.
  • An IAS 12 Income Taxes issue requesting clarification of the calculation of deferred tax in circumstances where the entity holds a subsidiary which has a single asset within it.
  • A review of past IAS 7 issues related to the classification of cash flows.
  • An IAS 40 Investment Property issue requesting clarification on whether telecommunication towers in a jurisdiction should be accounted for as property, plant and equipment in accordance with IAS 16 or as investment property in accordance with IAS 40.
  • An IAS 2 Inventories issue requesting clarification on the accounting for long-term supply contracts of raw materials when the purchaser of the raw materials agrees to make prepayments to the supplier. The staff are monitoring this issue in the context of developments on the IASB’s revenue recognition project.

One Committee member noted that one existing work in progress issue from last meeting related to IAS 32 Financial Instruments: Presentation - requesting clarification on whether, in order to qualify for balance sheet offsetting, the counterparty (or counterparties) to a netting arrangement is required to have an equivalent right of set-off to that of the reporting entity – was no longer included as an outstanding issue. The staff noted that this issue was subsequently withdrawn by the submitter. The staff had conducted a series of outreach activities to further consider the issue raised in the original submission, but outreach had indicated that this was not considered to be an issue of high priority. Therefore, the issue was removed from the Committee’s current work in progress.

No other questions or concerns were raised by the Committee.

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