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We comment on six IFRS Interpretations Committee tentative agenda decisions

  • Deloitte document (mid gray) Image

07 Mar 2019

We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 23, IAS 38, IFRS 9, and IFRS 11, as published in the November 2018 IFRIC Update.

More in­for­ma­tion about the issues is set out below:

Issue

Agenda decision supported?

More in­for­ma­tion

IAS 23 — Over time transfer of constructed good

Yes

o    Deloitte comment letter

o    Committee dis­cus­sion

IAS 38 — Customer’s right to access the supplier’s software hosted on the cloud  

No, we disagree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda. We note that the agenda decision suggests that all licencing agreements are out of the scope of IFRS 16. We believe that this conclusion is an interpretation of the requirements of IFRS 16.3(e) and of IAS 38.6.

o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 9 — Credit enhancement in the measurement of expected credit losses

Yes, we agree with the IFRS Interpretations Committee’s conclusion that if a credit enhancement is required to be recognised separately by IFRS Standards, an entity cannot include the cash flows expected from it in the measurement of expected credit losses. However, we note that IFRS Standards do not specifically address when separate recognition of a purchased credit enhancement is required.

o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 9 — Curing of a credit-impaired financial asset

Yes

o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 9 — Physical settlement of contracts to buy or sell a non-financial item

Yes

o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 11 — Sales of output by a joint operator

Yes; we agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda for the reasons set out in the tentative agenda decision, but recommend a change to provide clarity that no revenue or income should be recognised until the output is sold (whether it is revenue from contracts with customers or other income).

o    Deloitte comment letter

o    Committee dis­cus­sion

Click to access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Committee.

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