The Board decided to add some minor amendments “sweep issues” related to its package of amendments to IFRS 17 Insurance Contracts to that package. Additionally, the staff provided a summary of the discussions of the Transition Resource Group for IFRS 17 (TRG) meeting held on 4 April 2019. (See our IFRS in Focus for a summary of the meeting).
For Goodwill and Impairment the staff responded to issues raised by the Board in April in relation to possible new disclosures that the acquirer of a business would be required to provide to help a user assess whether a business combination was a good investment decision and whether that business is performing as expected. The papers included a discussion of ways to present equity (or net assets) excluding goodwill. The staff are also suggesting that the Discussion Paper propose that the requirement for an annual test for impairment of goodwill and intangible assets with an indefinite life staff be removed and an indicator-only approach be used. The staff will bring their recommendations for preliminary views to be expressed in the Discussion Paper to the meeting in June.
One of the threads in the Disclosure Initiative is a targeted Standards-level review of disclosure requirements. The Board has been developing internal guidance for setting disclosure requirements which it decided to test on IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement. The staff presented summaries of the outreach they have been undertaking since November 2018 and the different approaches they plan to take when reviewing IAS 19 and IFRS 13 disclosures. The Board was generally supportive of the approach.
For Primary Financial Statements, the Board decided to develop an Exposure Draft for a new IFRS Standard revising or replacing IAS 1 Presentation of Financial Statements, and that a Discussion Paper is not required.
The staff presented a summary of the feedback received on the Exposure Draft Onerous Contracts—Cost of Fulfilling a Contract (see our IFRS in Focus for a summary of the ED). Board members noted that the proposals received mixed feedback. No decisions were made.
Now that the IASB has published a revised Conceptual Framework, the IASB is considering whether IAS 37 Provisions, Contingent Liabilities and Contingent Assets should be revised. The staff are recommending that the Board align the definition of a liability in IAS 37 with the definition in the Conceptual Framework, including potentially replacing IFRIC 21 Levies with new requirements and illustrative examples in IAS 37. They also recommend that the Board clarify which costs to include in the measure of a provision and specify whether the rate at which an entity discounts a provision for the time value of money should include or exclude the entity’s own credit risk. Many Board members expressed a strong preference for keeping any proposed changes as narrow as possible. The staff will bring their recommendations to a future meeting.
In an an education session for Rate-regulated Activities the Board discussed ways to improve the understanding and clarity of the model that has been developed thus far.
The staff set out their approach to revising the Management Commentary Practice Statement and that the Board provide additional guidance on the objective of management commentary, how to consider qualitative characteristics of useful financial information when providing management commentary and the content of management commentary. Board members said that it needs to be clear what information is expected to be provided in the financial statements and what information is better presented in the management commentary. No decisions were made.
The Board decided that the IFRS for SMEs Standard should be aligned with new and amended IFRS Standards. The Board also thinks stability is important and they will consider ways to phase in updates. The Board also discussed IFRS 16 Leases to identify ways to simplify the requirements for SMEs.
Please click to access the detailed notes taken by Deloitte observers for the entire meeting.