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September 2019 IASB meeting agenda posted

13 Sep 2019

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 24–26 September 2019. There are 15 topics on the agenda.

The Board will discuss the following:

  • Agenda consultation — Proposed approach to developing the request for information
  • Research programme — Research update
  • Implementation matters — Onerous contracts: Costs that relate directly to the contract
  • Classification of liabilities as current or non-current (amendments to IAS 1) — Completion of due process and permission to begin balloting process
  • Business combinations under common control — When to apply which measurement approach
  • Financial instruments with characteristics of equity — Project direction
  • IBOR reform and the effects on financial reporting (Phase 2) — Project plan and preliminary timing
  • Rate-regulated activities
  • Management commentary — Faithful representation
  • Disclosure initiative — IFRS 13 disclosure objectives
  • Primary financial statements
  • SME standard review and update
  • Subsidiaries that are SMEs — research results
  • Extractive activities
  • Post implementation review of IFRS 10–12 — Project update

The full agenda for the meeting can be found here. We will post any updates to the agenda, our comprehensive pre-meeting summaries as well as observer notes from the meeting on this page as they become available.

EFRAG draft comment letter on proposed amendments to IAS 12

13 Sep 2019

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2019/5 ‘Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction — Proposed amendments to IAS 12'.

The exposure draft addresses the uncertainty in practice about how an entity applies the initial recognition exemption in paragraphs 15 and 24 of IAS 12 Income Taxes to transactions that give rise to both an asset and liability on initial recognition and may result in temporary differences of the same amount.

EFRAG is broadly supportive of the changes proposed; however, it questions whether the IASB's approach ('gross method') that considers the unit of account in IAS 12 as being the asset and the liability rather than as a single transaction is the best approach given the complexity. EFRAG also has concerns with the recogniton 'cap' in paragraph 22A(b) for a deferred tax liability, and the consequences of this proposal in subsequent periods.

Comments on EFRAG's draft comment letter are requested by 25 October 2019. For more information, see the press release and the draft comment letter on the EFRAG's website.

FASB proposes amendments to classification of debt that would bring US GAAP and IFRSs closer together

13 Sep 2019

The US standard-setter FASB has issued a revised version of its proposed Accounting Standards Update (ASU) 'Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent).'

The proposed amendments would make US GAAP more consistent with IFRSs, especially with IAS 1 Presentation of Financial Statements that includes guidance on the classification of liabilities. The exposure draft notes that FASB leveraged IAS 1 guidance when developing its proposals for the classification of debt. Furthermore, the FASB’s decision on applying the debt classification principle to post-balance-sheet refinancings of debt is consistent with the guidance in IAS 1. However, differences would still remain between US GAAP and IFRSs for classifying debt arrangements with covenant violations.

The IASB currently has a project on its agenda to amend IAS 1 that is specifically related to the classification of liabilities. Final amendments to IAS 1 are currently expected in the fourth quarter of 2019.

The exposure draft can be accessed through the press release on the FASB website. Comments are requested by 28 October 2019.

ESMA continues series of video tutorials on ESEF

11 Sep 2019

The European Securities and Markets Authority (ESMA) has released the third in a series of tutorial videos designed to guide market participants through the new requirements of European Single Electronic Format (ESEF), which will become effective in 2020.

The new video answers ten questions which are frequently asked by market participants to ESMA and National Competent Authorities on the ESEF Regulation.

Please click to access the seven minute video on YouTube.

IASB publishes project update on goodwill and impairment related to business combinations

10 Sep 2019

The IASB has published an article by IASB member Tom Scott on the status of the Board's goodwill and impairment project following its post-implementation review of IFRS 3, 'Business Combinations'.

Within its goodwill and impairment project, the Board is investigating how companies can provide users of financial statements with better information about mergers and acquisitions (business combinations) at a reasonable cost. This investigation includes the challenging question of how companies should account for goodwill after the business combination.

The six-page article discusses the Board's preliminary views that:

  • "we should enhance disclosure objectives and requirements to improve the information provided to users about an acquired business and its subsequent performance, even if that information must be on a combined basis where the acquired business has been integrated into an existing business;
  • it is not feasible to make the impairment test significantly more effective at recognising impairment losses of goodwill;
  • reintroducing amortisation of goodwill would not provide significantly better information to users;
  • we should reduce the cost and complexity of the impairment test by providing relief from the mandatory annual quantitative impairment test for goodwill;
  • we should also reduce the cost and complexity of the impairment test by simplifying some of the requirements for estimating value in use;
  • we should not allow more intangible assets to be included in goodwill; and
  • we should enhance transparency by requiring companies to present total equity before goodwill in their balance sheets."

The article notes that the Board plans to issue a discussion paper on these issues at the end of 2019.

EFRAG appoints new TEG member

10 Sep 2019

The Board of the European Financial Reporting Advisory Group (EFRAG) has announced the appointment of Olivier Schérer​ to its Technical Experts Group (TEG), effective from 16 September.

Mr Schérer will replace Isabelle Grauer-Gaynor, who is stepping down from EFRAG TEG as of 13 September.

For more information, see the press release on the EFRAG's website.

Agenda for the September 2019 IFRS Advisory Council meeting

06 Sep 2019

An agenda has been released for the upcoming meeting of the IFRS Advisory Council, which is being held in London on 18–19 September 2019.

A summary of the agenda is set out below:

Wednesday 18 September 2019 (09:00-17:45)

  • Welcome and Chair's preview
  • Effect of technology on the investment process (introduction and breakout sessions)
  • Consistent adoption and application of IFRSs
  • Effect of technology on the investment process (feedback)
  • Effective risk management (introduction and breakout sessions)
  • Update on Trustees and Foundation activities
  • Update on the Board’s activities

Thursday 19 September 2019 (9:15-14:45)

  • Digital experience for customers and stakeholders (introduction and breakout sessions)
  • 2020 Agenda Consultation — Proposed approach
  • Effective risk management (feedback)
  • Digital experience for customers and stakeholders (feedback)
  • Summing up of the meeting

Agenda papers for the meeting are available on the IASB website.

Agenda and pre-meeting summaries for the September 2019 IFRS Interpretations Committee meeting

05 Sep 2019

The IFRS Interpretations Committee will meet on Tuesday 17 September 2019 to discuss nine issues, including three new interpretation requests.

New Issues

The Committee will discuss three new issues.

IFRS 15 Revenue from Contracts with Customers—Training costs to fulfil a contract (Agenda Paper 2). Should training costs that are incurred by a supplier, that are necessary to be able to deliver a service to a customer and that are recoverable from the customer, be recognised as a contract asset?

IFRS 16 Leases—Definition of a lease—Shipping contract (Agenda Paper 3). Does a particular type of shipping contract contain a lease? 

IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 29 Financial Reporting in Hyperinflationary Economies—Translation of a hyperinflationary foreign operation (Agenda Paper 4) How does an entity, with a non-hyperinflationary presentation currency, present the information required by IAS 21 and IAS 29 for its interest in a foreign operation which is hyperinflationary?

The staff are recommending that the Committee not develop any Interpretations or amendments but instead publish tentative agenda decisions. 

Agenda decisions to finalise

The staff are recommending that the Committee finalise six tentative agenda decisions.

IFRS 15 Revenue from Contracts with Customers—Compensation for delays or cancellations (Agenda Paper 5). Should an obligation to compensate customers for delayed or cancelled flights (as set out in legislation) be recognised as part of the transaction price or as an obligation in accordance with IAS 37?

IAS 41 Agriculture—Subsequent expenditure (Agenda Paper 6). Should an entity capitalise or expense the costs related to the biological transformation of biological assets?

IAS 7 Statement of Cash Flows—Changes in liabilities arising from financing activities (Agenda Paper 7). Some investors have expressed concerns about the quality and consistency of disclosures about changes in liabilities arising from financing activities required by IAS 7.

IFRS 16 Leases—Incremental borrowing rate (Agenda Paper 8). Does the incremental borrowing rate need to reflect the interest rate in a loan with both a similar maturity to the lease and a similar payment profile to the lease payments?

IFRS 9 Financial Instruments—Fair value hedge of foreign currency risk on non-financial assets (Agenda Paper 9). Can foreign currency risk be a separately identifiable and reliably measurable risk component of a non-financial asset held for consumption (for example, property, plant and equipment and inventory denominated in a foreign currency) that an entity can designate as the hedged item in a fair value hedge accounting relationship?

IAS 1 Presentation of Financial Statements—Presentation of liabilities or assets related to an uncertain tax position (Agenda Paper 10). Should an entity present a liability related to uncertain tax treatments as a current (or deferred) tax liability or as a provision?

Work in progress (Agenda Paper 11)

There are no new matters that have not yet been presented to the Committee. The staff will present the analysis of comments of the tentative agenda decision 'Lease Term and Useful Life of Leasehold Improvements (IFRS 16 Leases and IAS 16 Property, Plant and Equipment)' at a future meeting.

The full agenda for the meeting can be found here. We will update this page for any changes to the agenda and our Deloitte pre-meeting summaries for the meeting as they become available.

IVSC begins article series on goodwill amortisation

05 Sep 2019

The International Valuation Standards Council (IVSC) has published the first article in a series looking into whether principles underlying business valuations are compatible with the concept of goodwill amortisation. The series aims at encouraging public discussion by exploring certain fundamental questions in this area to inform financial statement preparers, reviewers, and users, and aid the capital market.

The first article Is Goodwill a Wasting Asset? can be accessed through the press release on the IVSC website.


IASB chair speaks in South Korea

04 Sep 2019

In a keynote speech given at an event organised to celebrate the 20th anniversary of the Korea Accounting Standards Board (KASB), IASB chair Hans Hoogervorst discussed Korea’s contribution to international standard-setting through history and remaining relevant in the future.

Mr Hoogervorst began by reflecting on the IASB's history with the KASB. He moved on to discuss the future of financial reporting and remaining relevant in a changing world. He noted, 'To remain relevant, we must adapt.' He reiterated his view that the IASB is unlikely to tackle sustainability reporting standards, but noted their importance. He also pointed to the work the KASB is doing to shrink the gap between book value and market value of companies — the KASB is researching the possibility of a separate 'Statement of Key Intangibles'. 

For more information, see the transcript of Mr Hoogervorst's speech on the IASB's website.

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