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Pre-meeting summaries for the November 2021 IFRS Interpretations Committee meeting

  • IFRIC meeting (blue) Image

29 Nov 2021

The IFRS Interpretations Committee (Committee) meets on Tuesday 30 November and Wednesday 1 December 2021. The Committee will discuss the comment letter analyses for two tentative agenda decisions and two new submissions.

Comment letter analysis

IFRS 16 Leases—Economic Benefits from Use of a Windfarm: In June 2021, the Committee published a tentative agenda decision in response to a submission about the definition of a lease. The submitter asked whether, applying IFRS 16:B9(a), an electricity retailer (customer) has the right to obtain substantially all the economic benefits from use of a windfarm throughout the term of an agreement with a windfarm generator (supplier). The Committee concluded that the principles and requirements in IFRS Standards provide an adequate basis to account for this matter. Many of the respondents to the tentative agenda decision agreed with the conclusion. Nonetheless, some of them raised some further matters for the Committee to consider. The staff analysed these matters and recommend finalising the agenda decision with the addition of two references to previous agenda decisions to address issues raised by respondents.

IFRS 9 Financial Instruments and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance—TLTRO III Transactions: In its June 2021 meeting, the Committee discussed a submission asking how banks account for the European Central Bank (ECB)’s Targeted Longer-Term Refinancing Operations (TLTRO). Specifically, the submission asked whether the TLTRO III tranches are loans at a below-market interest rate which should be accounted for as a government grant. The staff have analysed the comment letters and recommend finalising the agenda decision with minor editorial changes.

New submissions

IFRS 15 Revenue from Contracts with Customers—Principal versus Agent: Software Reseller: The Committee received a submission asking whether a reseller of software licences is a principal or agent in respect to the standard software licences provided to the customer. The staff found that the fact pattern is highly specific and even small or subtle differences in the specific facts and circumstances could change the conclusion when applying the requirements about principal versus agent considerations in IFRS 15. The staff were therefore of the view that it would be inappropriate for the Committee to conclude whether the reseller is a principal or agent in the fact pattern submitted. Instead, the staff recommend publishing a tentative agenda decision should that only sets out the applicable requirements in IFRS 15 and explains how a reseller might apply those requirements.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Negative low or new energy vehicle credits: The Committee received a submission asking whether an entity with negative low emission vehicle credits has a present obligation that meets the definition of a liability in IAS 37. If the answer to this question is "no", the submitter asked whether the Committee’s views would be different if the entity had entered into a binding contract to purchase positive new energy credits before the end of the reporting period the entity, but that contract is settled after the end of the reporting period. The staff recommend that the Committee publish a tentative agenda decision that outlines whether an entity with negative low emission vehicle credits has a present obligation that meets the definition of a liability in IAS 37.

Work in progress: The following new matters have not yet been presented to the Committee:

  • Rent Concessions: Lessors and Lessees (IFRS 16 and IFRS 9)
  • Special Purpose Acquisition Companies (SPAC): Classification of Public Shares as Liabilities or Equity (IAS 32)

The full agenda for the meeting and our com­pre­hen­sive pre-meet­ing summaries can be found here.

Related Topics

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.