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January

Agenda for the January 2019 ITCG meeting

28 Jan 2019

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be held by conference call on 31 January 2019.

The agenda is summarised below:

Thursday 31 January 2019 (12:00-13:00)

  • Proposed Taxonomy Update – Common Practice (IFRS 13): analysis of comments received
  • Updates to the Preparer’s Guide

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

February 2019 IASB meeting agenda posted, further potential amendments to IFRS 17 to be discussed

28 Jan 2019

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 7-8 February 2019. There are five topics on the agenda, including again potential amendments to IFRS 17 'Insurance Contracts'.

The following agenda papers around IFRS 17 will be discussed (links to IASB website):

The discussion on IFRS 17 is presently scheduled for 7 February, 14:45-16:45 (UK time).

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.

Updated IASB work plan — Analysis

25 Jan 2019

Following the IASB's January 2019 meeting, we have analysed the IASB work plan to see what changes have resulted from the meeting and other developments since the work plan was last revised in December. Changes are numerous but minor; most revisions narrow down the IASB's previously-set timelines and some are changes that reflect earlier IASB decisions that were previously not reflected in the work plan.

Below is an analysis of all changes that were made to the work plan since our last analysis on 17 December 2018.

Standard-setting projects

  • No changes.

Maintenance projects

  • Accounting Policies and Accounting Estimates — The IASB will decide on the project direction in April 2019 (formerly Q2 2019).
  • Amendments to IFRS 17 Insurance Contracts — An exposure draft is expected in Q2 2019 (formerly H1 2019).
  • Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction — An Exposure Draft is expected in Q2 2019 (formerly H1 2019).
  • Fees in the ‘10 per cent’ Test for Derecognition — An exposure draft is expected in Q2 2019 (formerly H1 2019).
  • IBOR Reform and its Effects on Financial Reporting — Formerly listed as a research project, an exposure draft is expected in Q2 2019 (formerly H1 2019). — NB This update actually reflects a December 2018 decision of the Board.
  • Lease Incentives — An exposure draft is expected in Q2 2019 (formerly H1 2019).
  • Onerous Contracts — Cost of Fulfilling a Contract — Exposure draft feedback is expected in Q2 2019 (formerly H1 2019).
  • Subsidiary as a First-time Adopter — An exposure draft is expected in Q2 2019 (formerly H1 2019).
  • Taxation in Fair Value Measurements — An exposure draft is expected in Q2 2019 (formerly H1 2019). 
  • Updating a Reference to the Conceptual Framework — An exposure draft is expected in Q2 2019 (formerly H1 2019). 

Research projects

  • Business Combinations under Common Control — A discussion paper is expected in H1 2020 (formerly just listed as 2020).
  • Goodwill and Impairment — The next milestone was changed to a discussion paper, instead of the previously-listed "discussion paper or exposure draft."
  • Disclosure Initiative — Principles of Disclosure — A project summary is expected in March 2019 (formerly listed as Q1 2019).
  • Financial Instruments with Characteristics of Equity — Discussion paper feedback is expected in March 2019 (formerly Q1 2019).
  • Provisions — New project added to the work plan; the IASB plans to review research in the second half of 2019. — NB This update actually reflects a December 2018 decision of the Board.

Other projects

  • IFRS Taxonomy Update — 2018 General Improvements — A date of February 2019 was added for the proposed update feedback.
  • IFRS Taxonomy Update — Common Practice (IFRS 13) — The next milestone was changed from "analyse feedback" to "final update" with an expected date of March 2019. — NB This update seems somewhat premature since the feedback received will not by anlysed by the ITCG until its 31 January meeting.
  • Revisions to the Preface to IFRS Standards — Project removed from the work plan. — NB This changed entry actually reflects an October 2018 decision of the Board.

The above is a faithful comparison of the IASB work plan at 17 December 2018 and at 25 January 2019. For access to the current IASB work plan at any time, please click here.

EFRAG draft comment letter on proposed amendments to IAS 37 regarding onerous contracts

25 Jan 2019

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2018/2 'Cost of Fulfilling a Contract (Proposed amendments to IAS 37)'.

EFRAG ​welcomes the IASB’s efforts to clarify the requirements in IAS 37 regarding the assessment of whether, in a contract, the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. However, EFRAG notes that the proposed amendments would affect the onerous assess​ment not only for long-term construction contracts previously in the scope of IAS 11 but for all contracts in the scope of IAS 37. Consequently, EFRAG encourages the IASB to further assess the expected impact of the proposals.

Comments on EFRAG's draft comment letter are requested by 5 April 2019. For more information, see the press release and the draft comment letter on the EFRAG website.

January 2019 IASB meeting notes posted

25 Jan 2019

The IASB met on Wednesday 23 January 2019 to discuss four topics. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The Board continued to assess concerns and implementation challenges raised by stakeholders about the requirements in IFRS 17 Insurance Contracts. At this meeting the Board considered four issues: insurance acquisition cash flows for renewals outside the contract boundary; reinsurance contracts held—onerous underlying insurance contracts; reinsurance contracts held—underlying insurance contracts with direct participation features; and recognition of the contractual service margin in profit or loss in the general model. In all cases the Board decided to propose amendments to IFRS 17.  

The Board decided to proceed with the publication of an Exposure Draft to amend IAS 12 Income Taxes, in relation to the deferred tax on assets and liabilities arising from a single transaction. 

The staff also gave oral updates on the projects on Rate-regulated Activities and Extractive Activities.

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

IASB decides on further potential amendments to IFRS 17

23 Jan 2019

At its meeting currently held in London, the IASB discussed IFRS 17 'Insurance Contracts' and 5 of the 25 concerns regarding the standard that were identified in October 2018 as candidates for potential amendments.

Applying the criteria for evaluating proposed amendments agreed on in October 2018, the Board came to the following conclusions:

Issue identified at the October IASB meeting

Agenda paper with detailed description (link to IASB website)

Staff recommendation

 Board decision

3 — Acquisition cash flows for renewals outside the contract boundary

Agenda paper 2A

To allocate to any anticipated contract renewals part of the insurance acquisition cash flows directly attributable to newly issued contracts and therefore to capitalise them

13/14 support staff recommendation

12 — Reinsurance contracts held: initial recognition when underlying insurance contracts are onerous

Agenda paper 2B, Agenda paper 2C

To recognise immediate gains on (previously or simultaneously entered) reinsurance contracts, if and to the extent that immediate losses on insurance contracts are recognised; require an entity to apply the expanded exception when the entity
measures insurance contracts applying the PAA

14/14 support staff recommendation

8 — Contractual service margin: limited applicability of risk mitigation exception (some aspects already discussed at the December 2018 meeting)

Agenda paper 2D

To expand the scope of the risk mitigation exception for insurance contracts with direct participation features

14/14 support staff recommendation

13 — Reinsurance contracts held: ineligibility for the variable fee approach

7 — Contractual service margin: coverage units in the general model

Agenda paper 2E

To amend IFRS 17 so that in the general model the contractual service margin should be allocated on the basis of coverage units that are determined by considering both insurance coverage and any investment return service

13/14 support staff recommendation 

The staff notes that papers on the remaining topics from the list of issues presented at the October meeting will be presented to the Board in the first quarter of 2019.

The IASB has published a press release saying it is making progress with its IFRS 17 discussions.

Updated preparer’s guide to the IFRS Taxonomy

23 Jan 2019

The IFRS Foundation has released an updated version of 'Using the IFRS Taxonomy — A preparer’s guide' that is intended to help companies understand the IFRS Taxonomy content.

The updates in comparison to the 2017 version of the document include:

  • a new section that provides more detail on how to communicate company-specific information;
  • new examples illustrating how to find the correct element when tagging the primary financial statements; and
  • other clarifications and improvements.

Please click to access the updated guide on the IASB website.

Agenda for the January 2019 DPOC meeting

23 Jan 2019

The Trustees of the IFRS Foundation will be meeting in Kuala Lumpur from 29 to 31 January 2019. However, only the meeting of the Due Process Oversight Committee (DPOC) on 29 January will be held in public.

The agenda for the DPOC meeting is summarised below.

Tuesday, 29 January 2019 (16:25–17:50)

  • Introduction and Actions from DPOC meeting held on 15 October 2018
  • Technical activities: Key issues and update
  • IBOR Reform – Comment letter period for potential narrow-scope amendments
  • Due Process Handbook review
    • Outline of timetable and next steps
    • Explanation of amendments to the Handbook
    • Agenda decisions
    • Effects analysis
    • Education material
  • Correspondence: update
  • Summary

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

Agenda for the upcoming IASB meeting changed

22 Jan 2019

The agenda for the IASB meeting, which will be held on 23 January 2019 in London, has been changed: The sessions have changed their order - most notably the session on IFRS 17 'Insurance Contracts' has been moved to the afternoon and will now begin at 13:00hrs UK time.

We have updated our meeting note page, which offers access to the agenda and our pre-meeting summaries of the agenda papers to be discussed, accordingly.

FRC Lab report on artificial intelligence in corporate reporting

22 Jan 2019

A new report from the Financial Reporting Lab of the UK Financial Reporting Council (FRC) considers how technology might impact the production, distribution and consumption of corporate reporting.

The report explains what artificial intelligence (AI) is, where its use might make sense in corporate reporting, and explores some of the possible and current use cases for the technology. For each use case it considers what is currently being achieved and what might be achieved in the future. The report finds:

  • Production – AI can enhance efficiency by replacing mechanistic human processing of underlying transactions and transforming that data into accounting and management information; ultimately feeding into annual reports.
  • Distribution – AI can support auditors and boards in the internal and external validation processes needed to ensure that the annual report is credible and compliant in an efficient and effective way.
  • Consumption – Investors are already using AI to enhance effectiveness of investment analysis by extracting meaning and value, not only from company reporting, but also from various sources of alternative data.

Overall, the report concludes hat it is not a question of whether AI will become important for corporate reporting, but when.

Please click to access Artificial Intelligence – How does it measure up? on the FRC website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.