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2019

November 2019 IASB meeting notes posted

26 Nov 2019

The IASB met on 19–20 November 2019 to discuss seven topics. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

Amendments to IFRS 17 Insurance Contracts: In June 2019 the Board issued ED/2019/4 Amendments to IFRS 17. The staff summarised the feedback from the comment letters on the ten questions in the ED and summarised comments on areas for which amendments to IFRS 17 were considered but not proposed. The Board supported the staff’s plan for redeliberations.

Implementation matters:

  • Lack of Exchangeability (IAS 21): In June 2019, the IFRS Interpretations Committee discussed the difficulties in applying IAS 21 when a currency suffers from an extreme long-term lack of exchangeability and when a foreign operation has not been able to access foreign currencies using the available legal exchange mechanisms, such as with the Venezuelan Bolivar. The Board concluded that this matter is widespread, could have a material effect on those affected and it is necessary to amend IAS 21 to address the matter.  
  • Annual Improvements: The Board published ED/2019/2 Annual Improvements to IFRS Standards 2018–2020 in May 2019. The Board discussed the comments received: Subsidiary as a First-time Adopter (Amendment to IFRS 1); Fees Included in the ‘10 per cent’ Test for Derecognition of Financial Liabilities (Amendment to IFRS 9); Lease Incentives (Amendment to Illustrative Examples accompanying IFRS 16); Taxation in Fair Value Measurements (Amendment to IAS 41).
  • Cryptoassets: The Board was given updated information the staff has obtained by monitoring developments on holdings of cryptocurrencies or initial coin offerings and decided that the staff should continue to monitor developments.

Primary Financial Statements

During the drafting of the ED to replace parts of IAS 1, the staff concluded that it did not have sufficient guidance from the Board on how gains and losses from disposal or impairment of integral associates and joint ventures should be classified. The Board decided that they should be presented together with the share of profit or loss, and impairment losses and reversal of impairment, from those investments.

IFRS 3 reference to the Conceptual Framework: In May 2019, the Board published ED/2019/3 Reference to the Conceptual Framework, which proposed amendments to IFRS 3. The Board discussed the comments received. All respondents supported updating the references in IFRS 3, albeit with some disagreement about aspects of the ED. No decisions were made, although several Board members emphasised that out of scope items identified by respondents should not compromise the project timeline.

Management Commentary: The Board decided to include guidance in the revised Practice Statement about an entity’s business model.

Disclosure Initiative: The Board continued looking at the disclosure requirements in IAS 19 and IFRS 13. In particular it decided to propose changes to those Standards so that some requirements use prescriptive language (shall) and others use less prescriptive language (such as ‘shall consider’ or ‘will normally disclose’).

Subsidiaries that are SMEs: The objective of this project is to consider providing disclosure relief for subsidiaries that are SMEs. The Board decided that the project proceed based on the original scope (i.e. considering only subsidiaries that are SMEs) but consider later whether the scope can be expanded without significantly affecting the conclusions already reached.

IBOR Reform and the Effects on Financial Reporting: The October papers stated that the staff would bring the hedge accounting issues arising in Phase 2 for discussion with the Board at this meeting. That discussion was not on the November agenda.

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

We comment on five IFRS Interpretations Committee tentative agenda decisions

25 Nov 2019

We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 21, IAS 29, IFRS 15, and IFRS 16, as published in the September 2019 IFRIC Update.

More in­for­ma­tion about the issues is set out below:

Issue

Agenda decision supported?

More in­for­ma­tion

IAS 29 — Translating a hyperinflation foreign operation

Yes

IFRS 15 — Training costs to fulfil a contract

Yes; however, we are concerned that the request received by the Committee indicates a potential ambiguity on the IFRS Standard (IAS 38 vs IFRS 15) that applies to certain costs and that, without further clarity, inappropriate analogies may be drawn to the tentative agenda decision.

IAS 21 and IAS 29 — Presenting comparative amounts when a foreign operation first becomes hyperinflationary

Yes and believe it would be useful if the agenda decision confirmed how the requirements of IAS 21 paragraph 42(b) apply to comparative amounts in interim and annual financial statements when the entity has a foreign operation that becomes hyperinflationary and the entity’s financial statements are presented in the currency of a non-hyperinflationary economy.

IFRS 16 — Definition of a lease — Shipping contract

Yes and suggest some editorial changes.

IAS 21 and IAS 29 — Cumulative exchange differences before a foreign operation becomes hyperinflationary

Yes and suggest some editorial changes.

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

Updated IASB work plan — Analysis (November 2019)

25 Nov 2019

Following the IASB's November 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. Changes are numerous.

Below is an analysis of all changes that were made to the work plan since our last analysis on 25 October 2019.

Standard-setting projects

  • No changes

Maintenance projects

  • Accounting policies and accounting estimates — the IASB decided to issue an IFRS amendment (no date given)
  • Amendments to IFRS 17 — final amendments are expected in Q2 2020
  • Classification of liabilities as current or non-current — final amendments are now expected in January 2020 (previously Q1 2020)
  • Deferred tax related to assets and liabilities arising from a single transaction — exposure draft feedback is now expected in Q1 2020 (previously no date given)
  • Disclosure initiative — Targeted standards-level review of disclosures — an exposure draft is now expected in H2 2020 (previously no date given)
  • Annual improvements to IFRSs 2018–2020 — the IASB discussed the feedback to the exposure draft and final amendments are expected in Q2 2020 on the following sub-projects:
    • Fees in the ‘10 per cent’ test for derecognition of financial liabilities
    • Lease incentives
    • Subsidiary as a first-time adopter
    • Taxation in fair value measurements
  • IBOR reform and its effects on financial reporting — Phase 2 — an exposure draft is now expected in H1 2020 (previously no date given)
  • Lack of exchangeability — newly added to the work plan and marked as "work in progress"
  • Updating a reference to the conceptual framework — the IASB discussed the feedback to the exposure draft and will issue final amendments (no date given)

Research projects

  • Dynamic risk management — core model outreach is planned for H1 2020
  • Financial instruments with characteristics of equity — the project direction will now be decided in H2 2020 (previously Q1 2020)
  • Pensions benefits that depend on asset returns — a research review is now expected in H2 2020 (previously December 2019)
  • Post-implementation review of IFRS 10, IFRS 11 and IFRS 12 — there is no longer a dtate given for the research review (previously Q1 2020)

Other projects

  • Due Process Handbook review — exposure draft feedback will now be discussed in December 2019 (previously October 2019)

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

Agenda for the December 2019 Emerging Economies Group meeting

25 Nov 2019

The agenda is available for the upcoming meeting of the IASB's Emerging Economies Group (EEG), which is being held in Xiamen on 2-4 December 2019.

The agenda for the meeting is summarised below (all times are local time in China):

Monday 2 December 2019 (09:00-16:45)

  • Welcome
  • Primary financial statements (three slots with breaks in between)
  • IBOR reform – Overview of Phase 1 and progress on Phase 2

Tuesday 3 December 2019 (09:00-17:00)

  • 2019 Comprehensive review of the IFRS for SMEs
  • Post-implementation review of IFRS 10, IFRS 11 and IFRS 12 – input for the request for information
  • Update on the Due Process Handbook Review – application of agenda decisions
  • IAS 16 – Update on Exposure Draft Property, Plant and Equipment — Proceeds before Intended Use
  • Agenda Consultation – identification of matters among EEG members for the request for information
  • IFRS 9 Financial Instruments - implementation experience in China

Wednesday 4 December 2019 (09:00-11:30)

  • Update on IASB projects
  • Accounting for non-public interest entities in Turkey
  • Extractive activities – Scope of project

Agenda papers from this meeting are available on the IASB's website

IASB releases podcast on IFRS 17

21 Nov 2019

The IASB has released a podcast featuring IASB members Darrel Scott and Nick Anderson as well as technical staff member Roberta Ravelli as they discuss the developments at the November 2019 Board meeting related to the amendment IFRS 17 'Insurance Contracts'.

In particular, Mr Anderson discusses the investors’ view on the implementation of IFRS 17 and the discussions at the CMAC meeting on this topic.

The podcast can be accessed through the press release on the IASB website. Our earlier news item summarising the results of the IASB's votes is available here.

IFRS Foundation issues guide on accounting policies

21 Nov 2019

The IFRS Foundation has issued, ‘Guide to Selecting and Applying Accounting Policies — IAS 8’.

This guide explains how to apply the three-step process to developing accounting policies by using material and examples that have been discussed by the IASB or IFRS Interpretations Committee.

For more information, see the press release on the IASB’s Web site.

Recent sustainability and integrated reporting developments

21 Nov 2019

A summary of recent developments at WBCSD, TCFD, IFAC, CFA Institute, WBCSD/ICAEW, and Deloitte.

The World Business Council for Sustainable Development (WBCSD) has released the 2019 edition of Reporting matters. This year’s report provides insights that aim to help companies navigate new contexts through the lens of materiality, judgement and visual language. Three addendum reports explore distinct aspects of reporting. The press release on the WBCSD website offers access to all reports.

The Task Force on Climate-related Financial Disclosures (TCFD) announces that it is forming an advisory group to assist the TCFD in developing practical guidance on climate-related scenario analysis. Please click for the announcement on the TCFD website.

The International Federation of Accountants (IFAC) has published a point of view Enhancing Corporate Reporting. The point of view discusses the need for enhancing the corporate reporting system, integrated reporting, and the role of the accountancy profession in enhancing corporate reporting. Please click to access the point of view on the IFAC website.

The CFA Institute announces in its latest report ESG Disclosures In Asia Pacific that as the Asia Pacific investment community increasingly integrates material ESG factors into the investment management process, there has been a notable increase in demand for issuers to provide high quality, comparable and relevant ESG information. Please click to access the report through the press release on the website of the CFA Institute.

The WBCSD and the Institute of Chartered Accountants in England and Wales (ICAEW) have launched guidance on non-financial assurance. The publication is designed to demystify common misconceptions about assurance and help users procure fit-for-purpose assurance services. Please click to access the guidance through the press release on the ICAEW website.

Deloitte (UK) has commented on Recommendations for SDG Disclosures: a consultation paper jointly published by the Association of Chartered Certified Accountants (ACCA), Chartered Accountants Australia and New Zealand (CAANZ), and the Institute of Chartered Accountants of Scotland (ICAS). Please see our comment letter here.

IASB discusses redeliberation plan for proposed IFRS 17 amendments

20 Nov 2019

At its meeting currently held in London, the IASB was given an overview of the feedback received on the exposure draft ED/2019/4 'Amendments to IFRS 17' and discussed a plan for redeliberating the proposed amendments.

There were four papers for the meeting (all links to the IASB website):

  • Agenda Paper 2A provided an overview of the comment letters and overall feedback on the exposure draft.
  • Agenda Paper 2B summarised the feedback from the comment letters on the ten questions in the exposure draft.
  • Agenda Paper 2C summarised comments on areas for which amendments to IFRS17 were considered but not proposed and other comments.
  • Agenda Paper 2D set out the staff recommended plan for redeliberations and asked whether the Board agreed with that plan.

The proposed redeliberation plan summarised staff recommendations for each point for the Board to decide whether it could confirm the proposed amendment at a future meeting, should consider further the feedback from respondents on the topic, or did not intend to consider further the topic.

The Board did not discuss each of the topics individually. Rather, the staff grouped the topics together into three groups:

  1. Proposed amendments that could be confirmed without further discussion because of general support in the comment letters (listed in Agenda Paper 2D paragraph 7).
  2. Proposed amendments that warranted further discussion as the feedback in the comment letters was constructive and provided at least a "little element" of new information (listed in Agenda Paper 2D paragraph 9).
  3. Topics that did not warrant further discussion as either there was support in the comment letters for the Board not picking them up or as the feedback in the comment letters did not provide any new information (listed in Agenda Paper 2D paragraph 10).

The Board's votes translate as follows into the staff's table of proposed further actions included as Appendix A in Agenda Paper 2D:

Question/Topic Detailed description in Agenda Paper, paragraphs Staff recommendation Board decision
Question 1(a) — Scope exclusion for credit cards 2B, 6‒9 Consider further the feedback from respondents 14 Yes
Question 1(b) — Scope exclusion for loans 2B, 10-14 Confirm the proposed amendment 14 Yes
Question 2 — Expected recovery of insurance acquisition cash flows 2B, 15-21 Consider further the feedback from respondents 14 Yes
Question 3(a) — Contractual service margin attributable to investment services | Coverage units for insurance contracts without direct participation features 2B, 22‒24 Consider further the feedback from respondents 14 Yes
Question 3(b) — Contractual service margin attributable to investment services | Coverage units for insurance contracts with direct participation features 2B, 25‒27 Confirm the proposed amendment 14 Yes
Question 3(c) — Contractual service margin attributable to investment services 2B, 28‒31 Consider further the feedback from respondents 14 Yes
Question 4 — Reinsurance contracts held — recovery of losses 2B, 32‒36 Consider further the feedback from respondents 14 Yes
Question 5 — Presentation in the statement of financial position 2B, 37‒41 Confirm the proposed amendment 14 Yes
Question 6 — Applicability of the risk mitigation option 2B, 42‒47 Confirm the proposed amendment for reinsurance contracts held and consider further the feedback from respondents on non-derivative financial instruments measured at fair value through profit or loss 14 Yes
Question 7(a) — Effective date of IFRS 17 2B, 48‒53 Consider further the feedback from respondents 14 Yes
Question 7(b) — IFRS 9 temporary exemption in IFRS 4 2B, 54‒59 Consider further the feedback from respondents 14 Yes
Question 8(a) — Transition reliefs for business combinations 2B, 60‒66 Confirm the proposed amendment and consider further the feedback from respondents on contracts acquired in their settlement period 14 Yes
Question 8(b)–(c) — Transition reliefs for the risk mitigation option 2B, 67‒72 Confirm the proposed amendment and consider further the feedback from respondents on the prohibition from applying the risk mitigation option retrospectively 14 Yes
Question 9 — Minor amendments 2B, 73‒77 Consider further the feedback from respondents 14 Yes
Question 10 — Terminology 2B, 78‒82 Consider further the feedback from respondents as part of the discussion of Question 3 14 Yes
Level of aggregation 2C, 7‒13 Consider further the feedback from respondents on some specific contracts 14 Yes
Cash flows in the boundary of a reinsurance contract held 2C, 14‒19 Do not plan to consider further the topic 13 Yes
Subjectivity in the determination of discount rates and the risk adjustment for non-financial risk 2C, 20‒24 Do not plan to consider further the topic 13 Yes
Risk adjustment for non-financial risk in a consolidated group of entities 2C, 25‒29 Do not plan to consider further the topic 13 Yes
Discount rate used to determine adjustments to the contractual service margin 2C, 30‒36 Do not plan to consider further the topic 13 Yes
Other comprehensive income option for insurance finance income or expenses 2C, 37‒41 Do not plan to consider further the topic 13 Yes
Business combinations| Contracts acquired in their settlement period 2C, 42‒48 Consider further the feedback from respondents 14 Yes
Business combinations| Classification of contracts acquired 2C, 49‒55 Do not plan to consider further the topic 13 Yes
Scope of the variable fee approach| Reinsurance contracts issued 2C, 56‒62 Do not plan to consider further the topic 13 Yes
Interim financial statements 2C, 63‒74 Consider further the feedback from respondents 14 Yes
Mutual entities issuing insurance contracts 2C, 75‒79 Do not plan to consider further the topic and confirm the addition of the proposed footnote to the Basis for Conclusions on IFRS 17 13 Yes
Additional transition modifications and reliefs 2C, 80‒81 Consider further the feedback from respondents on additional specific transition modifications and reliefs 14 Yes
New concerns and implementation questions 2C, 82‒85 Consider further the feedback from respondents 14 Yes

The staff plan to present papers on the above topics to the Board at future meetings in the period from December 2019 to February 2020. The staff expect that there will sufficient time for the Board to consider the detailed feedback and finalise any resulting amendments by mid-2020.

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

19 Nov 2019

The IFRS Interpretations Committee will meet on Tuesday 26 November 2019 to discuss six issues, including three new interpretation requests.

New Issues

The Committee will discuss three new issues and recommends:

IFRS 16 Leases—Sale and leaseback with variable payments (Agenda Paper 5): If an entity sells an asset and leases it back with variable payments, how does the entity measure the ROU asset so as to determine the amount of gain or loss to be recognised at the transaction date?

IFRS 15 Revenue from Contracts with Customers—Presentation of player transfer payments (Agenda Paper 6): Does a football club transferring a player to another club recognise the transfer payment received as revenue applying IFRS 15, or instead recognises the gain or loss in profit or loss applying IAS 38?

IAS 12 Income Taxes—Tax consequences under multiple tax regimes (Agenda Paper 7): How does an entity account for deferred taxes when the recovery of the carrying amount of an asset gives rise to multiple tax consequences? In some tax jurisdictions, the manner in which an entity recovers the carrying amount of an asset—for example, whether it recovers the asset through use or through sale—determines the tax consequences that follow from such recovery.

Agenda Decision to finalise

IFRS 16 Leases—Lease term and useful life of leasehold improvements (Agenda Paper 4): In the light of comments received on the tentative Agenda Decision the staff recommend either finalising an amended Agenda Decision recommend that the IASB propose an amendment to IFRS 16 as part of the next Annual Improvements to IFRS Standards.

Committee Input to the IASB

The IASB is seeking input from the Committee on two projects.

Agenda Consultation (Agenda Paper 2): The staff are presenting an overview of the IASB’s approach to the 2020 Agenda Consultation and seeking input on the matters that should be included in the Request for Information.  

Post-implementation review of IFRS 10, 11 and 12 (Agenda Paper 3): The IASB has started a PIR of IFRS 10, 11 and 12. The Committee will discuss the agenda decisions published in relation to these Standards along and other application issues.

Work in progress (Agenda Paper 11)

There are no new matters that have not yet been presented to the Committee.

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.

Summary of the October 2019 GPF meeting

19 Nov 2019

Representatives from the International Accounting Standards Board (IASB) met with the Global Preparers Forum (GPF) in London on 8 October 2019. Notes from the meeting have now been released.

The topics discussed at the meeting included:

  • IASB update
  • IBOR — Phase 2 update
  • Primary financial statements — Project update
  • Accounting policies disclosure — Summary of exposure draft and gathering preliminary views from GPF members
  • Post-implementation reviews of IFRS 10, IFRS 11, and IFRS 12 — Gathering GPF’s views to be considered in the Request for Information.
  • Agenda consultation — Gathering GPF’s views on potential financial reporting priorities for a Request for Information related to the 2020 Agenda Consultation

The next GPF meeting will be held on 5 March 2020.

For more information, see the meeting page and the meeting summary on the IASB's website.

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