Pre-meeting summaries for the February IASB meeting

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30 Jan 2019

The IASB will meet in London on 7–8 February 2019 to discuss five topics. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

The Board is considering amending IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement to provide relief from the effects of uncertainties caused by the reform of IBOR. The staff are recommending that relief be provided in relation to the highly probable requirement and prospective assessments, but not for designation of risk components that are not separately identifiable. An Exposure Draft is likely to be published in April with a short comment period, enabling any amendments to be finalised and published by December 2019, with an effective date of 1 January 2020.

The Board will continue to assess concerns and implementation challenges raised by stakeholders about the requirements in IFRS 17 Insurance Contracts. The staff are recommending that IFRS 17 and IFRS 9 be amended to allow an entity to apply either IFRS 17 or IFRS 9 to insurance contracts for which the only insurance in the contract is for the settlement of some, or all, of the obligation created by the contract (with consequential amendments to the disclosure requirements). The staff are recommending that the transition requirements in IFRS 17 be retained, except for a liability that relates to the settlement of claims incurred before an insurance contract was acquired. The staff are recommending a change to the modified retrospective approach that would require an entity to classify such liabilities as a liability for incurred claims (to the extent that it does not have reasonable and supportable information to apply a retrospective approach) and to permit an entity applying the fair value approach to choose to classify such liabilities as a liability for incurred claims.

For the Primary Financial Statements project, the staff are recommending that the Board modify some of its earlier decisions. Within the statement of cash flows, the starting point for the reconciliation of operating cash flows should be the operating profit subtotal, for all entities. Additionally, they are recommending that all entities classify cash flows from dividends paid as financing cash flows and cash flows from dividends received from equity-accounted associates and joint ventures as investing cash flows. However, the staff also set out special requirements, for both the statement of cash flows and the statement(s) of profit or loss and other comprehensive income, for entities that have as their main business activity providing financing to customers or investing in assets that generate a return individually and largely independently of other resources held by the entity. The staff also present additional proposals related to aggregation and disaggregation of information in the primary financial statements and in the notes, including a requirement to describe items in a way that faithfully represents the items they aggregate.

The Board will consider a project plan for a comprehensive review of the IFRS for SMEs Standard that proposes the publication of a Request for Information by about July 2019, an Exposure Draft sometime between January 2020 and February 2021 and amendments between July 2021 and May 2022. The IFRS for SMEs Standard does not reflect the current requirements in IFRS 3, 10, 11, 12, 13, 14, 15, 16 or 17.

The staff will also give an oral update on the Management Commentary project (the consultative group met in January).

More information

Our pre-meeting summaries are available on our February meeting note page and will be supplemented with our popular meeting notes after the meeting.

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