Date recorded:

The IFRS Interpretations Committee met on Tuesday 1 & Wednesday 2 December 2020.

The committee discussed the feedback on one tentative agenda decision and four new issues:

Agenda decision to finalise

Supply Chain Financing Arrangements—Reverse Factoring: In June 2020, the Committee published a tentative agenda decision which analyses the presentation of liabilities arising from reverse financing arrangement in the statement of financial position, statement of cash flows and the related disclosure. The Committee decided to finalise the agenda decision with some suggested amendments in the wording.

New issues

IAS 1 Presentation of Financial Statements—Classification of debt with covenants as current or non-current: The Committee members generally agree with the analysis how an entity determine whether it has "the right to defer settlement" when a long-term liability is subject to a condition and its compliance with the condition is tested at dates after the reporting date, applying the amended IAS 1, in the three cases described.

IAS 19 Employee Benefits—Attributing benefit to periods of service: The Committee members agreed the conclusion of the periods of service an entity attributes benefit for a defined benefit plan in a scenario where the amount of the retirement benefit an employee is entitled to depends on the length of services before retirement but raised concerns it deviates from the general views in practice.

IAS 38 Intangible Assets—Configuration or customisation of costs in a cloud computing arrangement: The Committee members agreed with the analysis of the accounting for costs of configuring and customising the suppliers' application software to which it receives access in future and the reference to IFRS 15 for the identification and timing of the services provided by the supplier.

IFRS 9 Financial Instruments—Hedging variability in cash flows due to real interest rates: The Committee members agreed with the conclusion that a hedge of the variability in cash flows arising from the changes in real interest rate based on inflation index cannot be accounted for as a cash flow hedge.

For all of the new issues, the Committee members agreed that the principles and requirements in the relevant Standards provide an adequate basis to determine the appropriate accounting for the issue and that the Committee should publish a tentative agenda decision stating that no further action is required.

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