The IFRS Taxonomy 2018 is consistent with IFRSs as issued by the IASB at 1 January 2018 and incorporates amendments made to the IFRS Taxonomy 2017 such as: (1) Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4), issued in September 2016, (2) IFRS 17 Insurance Contracts, issued in May 2017, and (3) Prepayment Features with Negative Compensation (Amendments to IFRS 9), issued in October 2017.

The IFRS Foundation has also published the IFRS Taxonomy Update — Annual Improvements and the IFRS Taxonomy Update — Prepayments Features with Negative Compensation (Amendments to IFRS 9). The IFRS Taxonomy 2018 incorporates the changes resulting from these two updates.

For more information, see the press release and the IFRS Taxonomy 2018 page on the IASB's website.

Newly added IFRSs are:

• amendments to IAS 28 on measurement of long-term interests in associates and Joint Ventures (issued in October 2017);
• amendments to IFRS9 on prepayment features and modifications of financial liabilities (issued in October 2017); and
• annual improvements 2015-2017 (issued in December 2017).

For more information, see the press release (in Japanese only) on the FSA website.

The IFRS Foundation are seeking three Trustees: one from Asia Oceania, one from Africa and one "at large". Trustees’ responsibilities include oversight of the organisation in the public interest, its strategic direction, appointments to the Board, the IFRS Interpretations Committee and the IFRS Advisory Council, and ensuring the financing of the organisation and approving its budget. The role description notes:

Qualified candidates should have top-level experience in an organisation with an interest in accounting standards. They should demonstrate a firm commitment to serving the public interest, to the work of the Foundation and to the Board as a high quality global standard-setter. They should be financially knowledgeable and be able to meet the time commitment, which includes, but is not limited to, up to four two-day meetings each year. Trustees should have an understanding of, and be sensitive to, the challenges associated with the adoption and application of high quality global accounting standards developed for use in the world’s capital markets and by other users.

Please click to access the press release on the IASB website.

The practical solution addresses the accounting for virtual currencies as defined in the Payment Services Act but only addresses limited issues considering that the virtual currency business is at a very early stage. However, the practical solution builds on two decisions:

• Are Virtual Currencies Assets? – Yes; and
• What Type of Assets are Virtual Currencies? – A new independent category of assets.

The following information is available on the ASBJ website:

• Presentation for the ASAF meeting
• Short summary of the practical solution
• Practical Solution on the Accounting for Virtual Currencies under the Payment Services Act (in the Japanese language only)

The updated report notes that the 15 issues identified in the 2010 paper remain relevant for discussion within the current context. Although the issues are quite distinct to Islamic financial transaction, the updated report suggests that they can be addressed within IFRS. However, the updated conclusion stresses:

Accounting for Islamic financial transactions requires judgment about facts and circumstances and should not be made based on contract names.

The report also notes that the Working Group plans to have a separate discourse on the application of IFRS 9, IFRS 15, IFRS 16, and IFRS 17 to specific Islamic financial transactions:

Application of IFRS to Islamic financial transactions is an ongoing agenda item as IFRS Standards evolve over time. The “Big Four” Standards – IFRS 9, IFRS 15, IFRS 16 and IFRS 17 – may pose challenges to Islamic financial reporting. For this reason, there need to be a collective effort to apply IFRS in a consistent manner and to improve understanding of the Standards, without compromising Shariah tenets.

Please click to access the updated report on the AOSSG website.

IPSAS 40 uses the modified pooling of interests method of accounting for amalgamations. Because this approach does not require comparative figures to be restated, the presentation requirements may be different from other versions of the pooling of interests method that entities have used previously.

Please click to access the short video (11 minutes) on the IPSASB website.

The issue now features:

• Spotlight — Timing and amount of revenue recognition (IFRS 15)
• In Profile — Interview with Zhenyi Tang, CMAC member
• Project updates
• Information on investor materials and current events

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

Meeting ac­tiv­i­ties included the following:

• Executive session — The Trustees discussed a number of important strategic issues:
  • Trustee Corporate Governance Issues — The Trustees discussed issues related to governance and procedures.
  • Report of the Directors — The Trustees received a report which discussed highlights of the IFRS Foundation in the past three months.
  • Asia-Oceania Office Plan — The Trustees approved the Asia-Oceania’s 2018 work plan.
  • Analysis of Organisation expenditure — The Trustees received a report on total expenditure for 2017.
  • Trustee Meeting Locations — The Trustees agreed that Brussels will host the first meeting in 2019.
  • Committee reports — The Trustees discussed reports from the Audit and Finance Committee, the Education and Content Services Committee, the Human Capital Committee, the Nom­i­nat­ing Committee, and the DPOC.
    
    The DPOC session included an update on the IASB’s technical activities as well as its due process actions. The DPOC also announced Ann Tarca will become Vice-Chair of the IFRS Taxonomy Consultative group. In addition, the DPOC approved a staff paper which outline the scope and timetable for the review of the Due Process Handbook.
• IASB Chairman’s report — The Chair of the IASB provided the Trustees with an update on the IASB’s technical ac­tiv­i­ties, support for the implementation of IFRS 17, and the conceptual framework project.
• Meetings in Hong Kong — The Trustees received a presentation by the Advisory Council chair. In addition, the Trustees met with the Asian-Oceanian Standard-Setters Group (see the summary on AOSSG website) and had a stakeholders event.

The full report on the IFRS Foun­da­tion trustees’ and DPOC meeting is available on the IASB’s website.

Finalisation of agenda decisions

The Committee finalised the three decisions relating to IFRS 15 Revenue for Contracts with Customers (Revenue recognition in a real estate contract; Revenue recognition in a real estate contract that includes the transfer of land; and Right to payment for performance completed to date) and will not take those items onto its agenda. As well as considering the specific issues, the Committee discussed more general comments about these agenda decisions, including the appropriateness of considering specific fact patterns. 

The Committee also finalised the decision not to add to its agenda a project in relation to the presentation of interest revenue for particular financial instruments.

Continuing discussions

In Committee continued its discussions of whether or how to clarify the meaning of the term ‘unavoidable costs’, which is used in the definition of an onerous contract in IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The Committee decided to develop a separate narrow scope proposal to amend IAS 37 that would specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’, with examples to illustrate the application of this.

New issues

The Committee decided to publish a tentative decision not to add to its agenda a project on IAS 7 Statement of Cash Flows - classification of short-term loans and credit facilities (Agenda Paper 6) because they think the requirements in the relevant Standard provide an adequate basis for an entity to determine the appropriate accounting.

The Committee decided to publish tentative decisions not to add two items to its agenda because they think there is insufficient evidence that the matter has widespread effect:

• IFRS 9 Financial Instruments - classification of a particular type of dual currency bonds (Agenda Paper 8). How to assess whether a financial instrument has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding when a bond has a par amount denominated in one currency and fixed interest coupon payments denominated in another currency.
• IFRS 9 Financial Instruments hedge accounting with load following swaps (Agenda Paper 9). How should the term “highly probable” be applied, as it is used in IAS 39.88 and IFRS 9.6.3.3, to assess whether a hedging relationship qualifies for hedge accounting?

The Committee also considered two other issues. The staff will assess whether an interpretation is necessary in relation to IAS 12 Income Taxes Deferred tax – tax base of assets and liabilities (Agenda Paper 4) and how the exemption (in IAS 12.15 and IAS 12.24) to recognising a deferred tax asset or a deferred tax liability should be applied. The staff will bring back a revised draft agenda decision in relation to IAS 37 Provisions, Contingent Liabilities and Contingent Assets - payments relating to taxes other than income tax (Agenda Paper 7).  The issue relates to when an entity makes a voluntarily payment to a tax authority that will either be returned or used to settle the tax liability (which the entity has determined is not probable and therefore not recognised).

There are no new or ongoing matters that have yet to be presented to the Committee.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

The Red Book contains all official pronouncements as issued at 1 January 2018. Accordingly, the 2018 edition includes the following changes made since 1 January 2017: IFRS 17, amendments to IFRS 9 and IAS 28, Annual Improvements 2015–2017, IFRIC 23, and IFS Practice Statement 2.

eIFRS Professional and Comprehensive subscribers can access the electronic files of the 2018 IFRS Red Book via eIFRS (you will be required to provide your login details).

The Red Book is also available through the IASB's Web Shop. Copies are priced at £78 each, plus shipping.