Amendments to IFRS 17 Insurance Contracts:The Board will continue its discussion of topics for which it had decided to consider the feedback from respondents further, specifically:

• Contractual service margin attributable to investment services (finalise the amendments proposed, with some changes)
• Level of aggregation—annual cohorts for insurance contracts with intergenerational sharing of risks between policyholders (recommend retaining the requirement in IFRS 17).
• Applicability of the risk mitigation option—non-derivative financial instruments at fair value through profit or loss (recommend the that the risk mitigation option be extended for insurance contracts with direct participation features in IFRS 17:B115)
• Minor editorial and consequential amendments (recommend the Board finalise them with minor changes).
• Additional specific transition modifications and reliefs (recommend extending, amending and adding modifications to the modified retrospective approach).
• For other topics raised by respondents to the Exposure Draft Amendments to IFRS 17 the staff recommend an amendment only to resolve an inconsistency between IFRS 17:B65(m) and IFRS 17:B66(f) and not for any of the other matters raised.

IBOR Reform and the Effects on Financial Reporting: The Board will complete its discussions of proposed amendments that respond to IBOR reform. The staff are recommending that the ED:

• Limit the scope of the amendment to clarify that a change in the basis on which the contractual cash flows are determined that alters what was originally anticipated constitutes a modification of a financial instrument in accordance with IFRS 9 to changes made in the context of IBOR reform;
• Propose temporary relief for hedging relationships that are amended to reflect modifications directly required by the reform;
• Set out how the amendments are apply when transition to an alternative benchmark rate occurs for classification and measurement of financial instruments; hedge accounting; lease accounting; and disclosures. The separately identifiable requirement for risk components should cease applying 12 months after the date that the alternative benchmark rate was designated as a risk component for hedge accounting purposes. These amendments should be mandatory and not voluntary.
• Have an effective date of annual periods beginning on or after 1 January 2021 with earlier application permitted, and be applied retrospectively.

The ED is expected to be published in April, with a comment period of 45 days.

Disclosure Initiative—Targeted Standards-level Review of Disclosures: The Board will continue its discussions of potential revisions to the disclosure requirements in IFRS 13 and recommend that the disclosure requirements in IFRS 13 be amended to:

• refer to significant drivers of change in the objective;
• require an entity to disclose a reconciliation from opening to closing balances of recurring fair value measurements categorised within Level 3 of the fair value hierarchy;
• state that an explanation by an entity of significant drivers of change in fair value measurements other than those classified in Level 3 of the fair value hierarchy might be necessary for it to meet the disclosure objective.

Disclosure Initiative—Accounting Policies: The staff will present a summary of the feedback received on the proposal to amend IAS 1 (or its proposed replacement, see https://www.iasplus.com/en/projects/major/pfs) to require the disclosure of ‘material’ rather than ‘significant’ accounting policies and to add guidance on how to whether an accounting policy is material.

Business Combinations under Common Control: The staff set out the disclosures requirements that they recommend should accompany the acquisition and predecessor approaches for a BCUCC. The staff also recommend that the Board publish a DP as the next step.

The staff will give an updates on recent activities of the IFRS Interpretations Committee and recommend that the Board not finalise the proposed amendments to IFRIC 14 related to Availability of a Refund. 

More information

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