On major projects, the only change the Board notes is that a decision on the direction of the Disclosure initiative project on Materiality is now expected within 6 months (was: after six months). For all other projects the next project steps may or may not have been pushed back by one month since the last work plan update.

Updates regarding the implementation projects are:

• Following the publication of the exposure draft ED/2015/11, the project on the different effective dates of IFRS 9 and the new insurance contracts standard has been changed to now being in "public consultation".
• The status of the project on clarifications to IFRS 15 has also been changed. The work plan now states that an IFRS is being developed and will be published within three months.
• Finally, the project on deferring the effective date of September 2014 amendments to IFRS 10 and IAS 28 has been removed from the work plan following the publication of final amendments last week

There are no updates to the research projects.

The revised IASB work plan is available on the IASB's website.

The guidance is structured around 11 principles:

• A bank's board of directors and senior management are responsible for ensuring appropriate credit risk practices.
• A bank should adopt, document and adhere to methodologies that allow for appropriately assessing and measuring the level of credit risk on all lending exposures.
• A bank should have a process in place to appropriately group lending exposures on the basis of shared credit risk characteristics.
• A bank's aggregate amount of allowances should be adequate and consistent with the objectives of the relevant accounting requirements.
• A bank should have policies and procedures in place to appropriately validate its internal credit risk assessment models.
• A bank's use of experienced credit judgment is essential to the assessment and measurement of expected credit losses.
• A bank should have a sound credit risk assessment and measurement process that provides it with a strong basis for assessing and pricing credit risk, and accounting for expected credit losses.
• A bank's public reporting should promote transparency and comparability by providing timely, relevant and decision-useful information.
• Banking supervisors should periodically evaluate the effectiveness of a bank's credit risk practices.
• Banking supervisors should be satisfied that the methods employed by a bank to determine allowances produce a robust measurement of expected credit losses under the applicable accounting framework.
• Banking supervisors should consider a bank's credit risk practices when assessing a bank's capital adequacy.

The scope of the guidance is accounting for expected credit losses broadly, so it covers IFRS 9 Financial Instruments as well as all other accounting frameworks (including impending changes to US GAAP). However, there is an appendix specifically dealing with IFRS 9.

Please click for access to the final guidance and a corresponding press release on the website of the Bank for International Settlements (BIS).

The following are some of the highlights of the matters discussed at the meeting:

• IASB Update. One of the concerns of the GPF members was the interaction of IFRS 9 and the forthcoming standards on insurance. The Technical Director described the solutions available through the existing IFRS 4 and the potential solutions available through the overlay and deferral approaches the IASB proposed in December 2015.
• IFRS Interpretations Committee Update. The meeting discussed:
  • IFRS 9/IAS 28 — Is measurement of long-term interests in associates and joint ventures, including impairment, in accordance with IFRS 9, IAS 28, or both?
  • IAS 16: Accounting for proceeds and costs of testing of PPE
  • Activities of the Interpretations Committee in general
• Concepual Framework. The GPF discussed some of the proposals in the exposure draft, especially around (a) the definitions of assets and liabilities, (b) concepts for recognition of assets and liabilities, and (c) concepts for derecognition of assets and liabilities.
• IFRS Advisory Council: Role and recent activities. GPF members discussed the Council’s recent advice to the IFRS Foundation, and agreed that consistency of implementation and relevance of IFRS are some of the key areas to consider.
• IASB Agenda Consultation and Trustees’ Review of Structure and Effectiveness of the IFRS Foundation. The GPF members were asked about the priorities they would ascribe projects on the IASB’s research agenda, whether the IASB provided the right mix of implementation support, and whether the IASB’s work plan delivered change at the right pace. Members discussed whether the IASB had issued too many narrow-scope amendments to IFRS since the last agenda consultation and some thought that change in general had been too rapid and that preparers wanted a period of calm. In the context of the Trustees' review the GPF discussed the relevance of IFRS, consistent application of IFRS, and governance and funding issues.
• Fair Value Measurement: Unit of Account. GPF members were asked to provide their views on the relevance of the measurement proposal included in the exposure draft (that the fair value measurement of quoted investments should be based on the product of the quoted price and the quantity of financial instruments (P × Q)). Many GPF members thought that P × Q was not a relevant measure for quoted investments.
• Disclosure Initiative: Materiality Practice Statement. GPF members supported the explanatory nature of the draft practice statement, however, they were were not sure whether it would discourage treating the specific disclosures requirements in standards as a checklist, disclosure of immaterial information or the omission of material information not captured by a specific requirement.

The full report is available on the IASB website.

Topics discussed at the meeting included:

This meeting was the final meeting of the ITG; further meetings beyond 2015 have intentionally not been planned.

For more information, and a summary of the discussions at the meeting, see Deloitte’s IFRS in Focus.

This issue features:

• A brief look at the IASB's Investors in Financial Reporting programme one year after the initial launch;
  
• Current projects that need input from the investment community;
• Current events calendar.

The IASB Investor Update newsletter is available on the IASB's website.

Background

On 11 September 2014, the IASB issued Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) as result of the work on one of the issues in relation to the transfers of assets between an investor and its associates or joint ventures the IASB was considering. Among the issues that were also considered at that time was the elimination of gains or losses arising from transactions between an entity and its associate or joint venture where an exposure draft (ED) had been announced for November 2014 but was never published. A second attempt at progressing with the issues in the November ED was undertaken in February 2015, now combined with addressing an identified conflict of the September 2014 amendments with IAS 28. However, in June 2015 the IASB decided that it wants to deal with the issues in the February ED more comprehensively as part of its research project on the equity method of accounting. To avoid that entities would need to change the way in which they apply IAS 28 twice in a short period of time the IASB decided to defer the effective date of the September 2014 amendments until it has finalised amendments, if any, that result from the research project on the equity method.

Changes

The amendments in Effective Date of Amendments to IFRS 10 and IAS 28 defer the effective date of the September 2014 amendments to these standards indefinitely until the research project on the equity method has been concluded. Earlier application of the September 2014 amendments continues to be permitted.

Additional information

Please click for:

• IASB press release (link to IASB website)
• Access to the amendment on the IASB website
• IFRS in Focus newsletter explaining the amendments
• Our IAS Plus project page on the equity method of accounting
• Updated EFRAG IFRS endorsement status report

Please click through for direct access to the notes:

• Effective date of amendments to IFRS 10 and IAS 28 — Due process
• Disclosure initiative: Standards-level review of disclosures and amendments to IAS 7 Statement of Cash Flows
• IFRS implementation issues
• Definition of a business
• Research programme
• Revenue from contracts with customers

Wednesday, 16 December 2015

• Discount rates
• Revenue from contracts with customers (joint with the FASB)

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

In the draft comment letter, EFRAG supports the proposed amendments that would affect three IFRSs: IFRS 1, IFRS 12, IAS 28.

Comments on EFRAG's draft comment letter are requested by 5 February 2016. For more information, see the press release and the draft comment letter on the EFRAG website.