IFRS Interpretations Committee holds September 2018 meeting

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14 Sep 2018

The IFRS Interpretations Committee met in London on 11 and 12 September 2018 to discuss thirteen issues, including five new interpretation requests. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

New Issues

The Committee received submissions asking whether:

  • IFRS 15 Revenue from Contracts with Customers: whether fees for admitting an entity to a stock exchange and fees for an ongoing listing service are distinct or relate to only one service
  • IFRS 11 Joint Arrangements: how the operators in a joint operation should report a lease liability on a contract signed by the joint operation or signed only by a lead operator
  • IAS 38 Intangible Assets: whether, some, cloud computing arrangements create an intangible asset
  • IAS 27 Separate Financial Statements: when an entity loses control of a subsidiary as a result of disposing some of its interest, can the entity elect to measure the retained interest at FVOCI and can any gain or loss on initial disposal be presented in profit or loss
  • IAS 27 Separate Financial Statements: whether the cost of a subsidiary acquired in stages is the fair value of the tranches (as deemed cost) or the sum of the consideration actually paid

The Committee decided not to take the IFRS 15, IFRS 11 and IAS 27 issues agenda will issue tentative decisions to that effect. The IAS 38 issue will be discussed again at the November meeting.

Agenda Decisions to finalise

The Committee considered the feedback on four tentative Agenda Decisions and decided to finalise them all:

  • IAS 23 Borrowing Costs — Expenditure on a qualifying asset
  • IAS 23 Borrowing Costs — Borrowing costs on land
  • IAS 21 The Effects of Changes in Foreign Currency Exchange Rates — Determination of the exchange rate when there is a long term lack of exchangeability
  • IFRS 9 Financial Instruments — Classification of a particular type of dual currency bond

Items for continuing consideration

Two matters were carried forward from earlier meetings:

  • IAS 37 Provisions, Contingent Liabilities and Contingent Assets — Payments relating to taxes other than income tax. The Committee decided not to take this matter onto its agenda, and to issue a tentative Agenda Decision to that effect.
  • IFRS 9 Financial Instruments — Hedge accounting with load following swaps. A tentative Agenda Decision was issued in March 2018. In light of the comments received the Committee decided not to finalise the Agenda Decision, but to issue a revised tentative Agenda Decision (i.e. to provide an opportunity for additional feedback).

Advice from the Committee for the IASB

The Committee also discussed two topics for which the IASB has asked for feedback: Cryptocurrencies (including holdings of cryptocurrencies and initial coin offerings); and feedback on the proposed amendments to the definitions of accounting policies and estimates in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

Other work in progress

Possible revisions to IAS 21 The Effects of Changes in Foreign Exchange Rates to clarify the accounting when the spot rate is not observable is not being discussed at this meeting. Three additional requests have been received, and are being analysed. They relate to IFRS 9 Financial Instruments and the physical settlement of a contract to buy or sell a non-financial item; IFRS 11 Joint Arrangements when there is a difference between a joint operator's entitlement to output and the amount they have actually received; and IAS 23 Borrowing Costs and the capitalisation of borrowing costs on assets being developed for sale for which revenue is recognised over time.

More information

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

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