Pre-meeting summaries for the March 2020 IASB meeting

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11 Mar 2020

The IASB will meet in London on 17 and 19 March 2020. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed, we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

Maintenance and Consistent Application: In 2017, the IFRS Interpretations Committee received a question about a particular commodity loan transaction and observed that the transaction may not be captured within the scope of any IFRS Standard. The staff recommend that the Board consider referring to commodity transactions as a potential project in its Request for Information (RFI) on the 2020 Agenda Consultation.

Agenda Consultation: The staff set out the plan for the 2020. They expect to publish the RFI in September, with a comment deadline of January 2021. After the Board has considered the feedback the work plan and feedback statement are expected to be published in Q4 2021.

Disclosure Initiative—Subsidiaries that are SMEs: In the January 2020 meeting, the Board agreed to move the project from the research programme to the standard-setting programme. The objective is to develop a reduced disclosure IFRS Standard that would apply on a voluntary basis to subsidiaries that are SMEs, adapted from the disclosure requirements of the IFRS for SMEs Standard. The staff expect to start drafting an ED or a DP in Q4 2020.

Rate-regulated Activities: The staff have been drafting the ED for the accounting model for regulatory assets and regulatory liabilities since last July. The staff are asking the Board to clarify whether some components included in the regulated rates in a period form part of total allowed compensation for the goods or services supplied by an entity in the same period or in a different period. In particular, the staff are seeking clarification about whether regulatory returns and performance incentives included in the regulated rates for a period form part of the total allowed compensation for to the goods or services supplied in the same period.

Management Commentary: The Board will continue its discussions about the objective of management commentary, which the staff recommend should be to support primary users in assessing an entity’s prospects of future cash flows and assessing management’s stewardship of the entity’s economic resources. The primary users are existing and potential investors, lenders and other creditors and they are expected to have a reasonable knowledge of business and economic activities. The staff will also introduce their thinking on developing disclosure objectives for various types of content to be included in management commentary.

Disclosure Initiative—Targeted Standards-level Review of Disclosures: The staff will ask permission to begin the balloting process on Exposure Draft (ED) Targeted Standards-level Review of Disclosures—Amendments to IAS 19 and IFRS 13. The staff recommend a comment period of 180 days.

Financial Instruments with Characteristics of Equity: At the December 2019 Board meeting, the Board discussed the staff’s preliminary analysis on how the fixed-for-fixed requirement in IAS 32 could be clarified. At this meeting the staff recommend that the Board articulate its foundation principle by stating that in a derivative on own equity that meets the fixed-for-fixed condition, the amount of functional currency units to be exchanged with each underlying equity instrument is fixed and does not vary other than (if applicable) with preservation adjustments and passage of time adjustments. The staff also set out recommendations for how the preservation and passage of time adjustments should be expressed. The staff will also present their plan for outreach with stakeholders on potential disclosures that can be developed as part of the FICE project.

Post-implementation review of IFRS 10, 11 and 12: The staff recommend that the Board proceed with the PIR and publish an RFI to gather more information about the application of these Standards.

Amendments to IFRS 17 Insurance Contracts: The staff recommend that the Board defer the effective date of IFRS 17 (incorporating the amendments) to annual reporting periods beginning on or after 1 January 2023 and extend the fixed expiry date of the temporary exemption from applying IFRS 9 in IFRS 4 to the same date. The staff expect that the amendments will be issued in the second quarter of 2020.

More information

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

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