IFRS Interpretations Committee meeting — 12 June 2018

Start date:

End date:

Location: London

IFRS IC meeting (blue)


The IFRS Interpretations Committee met in London on Tuesday 12 June 2018 and discussed seven issues, including two new interpretation requests.    

Finalisation of a draft agenda decision

The Committee finalised a tentative Agenda Decision in relation to the classification of short-term loans and credit facilities and whether a short-term bank arrangement that is always overdrawn can qualify as a component of cash and cash equivalents.

Continuing discussions

The Committee continued its discussions in relation to three matters.

IAS 12 Income Taxes Deferred tax—tax base of assets and liabilities. The Committee decided to develop an amendment to IAS 12 to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to both deductible and taxable temporary differences to the extent that an entity recognises a deferred tax asset and liability of the same amount in respect of those temporary differences.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets—the meaning of ‘unavoidable costs’. The Committee decided that no new disclosure requirements be added and that on initial application of the proposed amendments entities would be required to use a modified retrospective application with no option for full retrospective application and no specific transition provision for first-time adopters.

IAS 21 The Effects of Changes in Foreign Exchange Rates—foreign exchange restrictions. The Committee decided to publish for public comment a tentative Agenda Decision focusing on the specific circumstances in Venezuela. The Committee also asked the staff to assess whether it would be beneficial to consider amending IAS 21 to provide additional guidance on estimating an exchange rate.

New issues

There were two new issues, both in relation to IAS 23. The Committee received submissions asking whether:

  • in determining the expenditures on which to apply the capitalisation rate, an entity includes expenditures incurred on the qualifying asset before obtaining the general borrowings in the case that the entity incurs expenditures on the qualifying asset both before and after it incurs borrowing costs on the general borrowings.
  • an entity ceases to capitalise borrowing costs in respect of expenditures incurred in developing land once it begins constructing the building on the land or continues to capitalise borrowing costs in respect of the land development while it constructs the building

The Committee decided that IAS 23 provides an adequate basis for an entity to determine the appropriate accounting and the Committee will publish for public comment tentative Agenda Decisions to that effect.

Advice from the Committee for the IASB

In June 2017, the Board published the Exposure Draft Property, Plant and Equipment––Proceeds before Intended Use (ED). The staff are concerned that the feedback in the comment letters received suggests that there is a risk that in reducing the diversity in the reporting of sale proceeds, the proposed amendments could create new diversity in the costs recognised in profit or loss. The Committee discussed how best to proceed on this project, but was not asked to make any decisions.

Other work in progress

There are three continuing topics that are were not brought to this meeting, plus one new issue that the staff are still analyzing.



Agenda for the meeting


TUESDAY, 12 June 2018

Morning session (9:10-13:10)

  • Opening remarks and administrative matters
  • Items for continuing consideration:
    • IAS 21 — Extreme long-term lack of exchangeability
  •  New issues:
    • IAS 23 — Expenditures on a qualifying asset
    • IAS 23 — Borrowing costs on land
  • Agenda decisions to finalise:
    • IAS 7 — Classification of short-term loans and credit facilities
  • Items for continuing consideration (continued):
    • IAS 12 — Deferred tax – tax base of assets and liabilities

Afternoon session (14:10-15:55)

  • Items for continuing consideration (continued):
    • IAS 37 — Costs considered in assessing whether a contract is onerous
  • Advice from the Committee:
    • IAS 16 — Proceeds before intended use
  • Administrative session:
    • Work in progress

Agenda papers for this meeting are available on the IASB's website.

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