November 2020 IASB meeting notes posted

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20 Nov 2020

The IASB met via video conference on 18 November 2020 to discuss five topics and on 19 November it met with the FASB in an educational meeting. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

IASB meeting

Board work plan update: Last month the Board decided to begin the post-implementation review (PIR) of the IFRS 9 classification and measurement requirements and reconsider at a later date when to begin the PIRs of the IFRS 9 impairment and hedge accounting requirements and of IFRS 15. The Board will consider the start dates of those PIRs in the second half of 2021.

Post-implementation review of IFRS 10, IFRS 11 and IFRS 12: The Board confirmed the publication of the request for information (RFI), with a 150-day comment period (rather than the 180 days recommended by the staff). The RFI is expected to be published in December.

Maintenance and Consistent Application—Deferred Tax related to Assets and Liabilities arising from a Single Transaction: The Board is finalising amendments to IAS 12. The amendments are expected to be published in the second quarter of 2021 and will have an effective date of 1 January 2023.

Management Commentary: The staff raised some issues identified during drafting of the Exposure Draft (“sweep issues”). The Board decided that entities not applying IFRS Standards should be permitted to apply the Practice Statement. They also decided to use the term ‘accuracy’ rather than ‘freedom of error, emphasising that it applies to quantitative and qualitative information.

Disclosure Initiative, Subsidiaries that are SMEs: The IASB is developing a Standard setting out reduced disclosure requirements for subsidiaries apply IFRS Standards but meet the definition of an SME. The Board decided to have exceptions to the process for adapting disclosure requirements when preparing the analysis of adaptions to the disclosure requirements of the IFRS for SMEs Standard.  

For an analysis of how the IASB work plan has changed after this meeting, please see

Joint IASB—FASB education meeting

The boards updated each other on individual projects that partially or entirely overlap with a project of the other board. The purpose of the meeting was to share information. As such, no decisions were made.

COVID-19: The boards explained the steps they have taken to respond to the COVID-19, such as implementation and educational guidance and adjustments to their work plans. Much of the discussion focused on the accounting for government grants.

Leases other than COVID-19: The IASB staff explained the recent application questions discussed by the IFRS Interpretations Committee and narrow-scope standard-setting that has been initiated with regard to sale and leaseback transactions. The FASB is monitoring the implementation of its equivalent Standard and in July 2020 added a project to its technical agenda to address issues on which the FASB can act because it already has sufficient information from stakeholders. Both boards highlighted that they should continue to strive for as much convergence as possible between the respective Standards.

Goodwill and Impairment: Both the FASB and the IASB have on their respective agendas projects covering accounting for goodwill. Those projects do not constitute a joint project. However, both boards previously decided to monitor each other’s work because of the largely converged accounting models for business combinations. The FASB’s project is in an active project phase while the IASB’s project is in a research phase.

The initial discussion focused on the IASB’s preliminary view that an entity should be required to disclose the metrics that management (the chief operating decision maker or ‘CODM’ as described in IFRS 8) will use to monitor whether the objectives of the acquisition are met. The boards also discussed the subsequent accounting for goodwill.

Supply chain financing: The IASB described the issues that have been submitted to the IFRS Interpretations Committee, and the tentative agenda decision it has published. The IASB also outlined a possible narrow-scope standard-setting project in early 2021. The Big 4 firms submitted an agenda request to the FASB in October 2019 for guidance on disclosure and cash flow statement presentation of supplier finance programmes involving trade payables. Having undertaken research and outreach, the FASB decided in October 2020 to add a project to its agenda to develop disclosure requirements related to supplier finance programmes involving trade payables (a narrow scope). The FASB noted that there is increased disclosure in the US as a consequence of SEC staff speeches and guidance that encourages qualitative and quantitative disclosures in MD&A.

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

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