September 2022 IASB-FASB joint meeting notes posted

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12 Oct 2022

The IASB and FASB met virtually and in its offices in London on 30 September 2022. We have posted our comprehensive Deloitte observer notes for all the discussion held during the meeting.

The following topics were discussed:

Goodwill and Impairment (IASB) and Identifiable Intangible Assets and Subsequent Accounting for Goodwill (FASB)

The IASB has, and the FASB had, on their respective agendas projects covering the accounting for goodwill and intangible assets acquired in a business combination. The purpose of this meeting was to provide an opportunity for FASB and IASB members to discuss the status of the respective projects; the subsequent accounting for goodwill—including the FASB’s progress with developing an amortisation-with-impairment model and recent decision to deprioritise and remove the project from its technical agenda, and the IASB’s research on this topic; and the redeliberations of the IASB in relation to disclosures about business combinations. FASB members updated the IASB as to why they had removed the project from the agenda. One of the main reasons why the FASB could not agree on a way forward was that they did not have a clear objective as to whether the project was to reduce cost or to increase benefits. The IASB Chair highlighted that the IASB would have to consider the objective of their project before making a decision on amortisation in November. The boards discussed whether the impairment model could be improved and whether some intangibles could not be separated from goodwill. A FASB member asked whether the IASB would be prepared to split the amortisation part of the project from the disclosure part of the project if they ran into similar difficulties as the FASB. The IASB Chair confirmed that they are prepared to do so if necessary. The other main discussion point was the exemption the IASB tentatively decided to provide with regard to disclosures that are commercially sensitive.

Disaggregation-related projects

Both the IASB and the FASB are currently undertaking, or will undertake, projects whose objectives include providing users of financial statements with more disaggregated information. The purpose of this meeting was to provide both boards with an opportunity to share comments and ask questions about these projects. The boards discussed their projects on the statement of cash flows; the FASB has already started whereas the IASB has only just added a research project. They discussed investor calls for more disaggregation and more information about direct cash flows. They also discussed income statement disaggregation, including the difficulty of defining unusual items. A suggestion was made by a FASB member that this was better left for management commentary.

Digital Assets

The boards discussed the results of the FASB’s research and outreach related to digital assets, which led the FASB to add a project to its technical agenda—Accounting for and Disclosure of Crypto Assets. The IASB outlined its work and its decision not to add a project on cryptocurrencies and related transactions to its workplan. The discussion mainly focused on when to start addressing the crypto asset issue, particularly whether the boards should act now while the issue is not pervasive (i.e. leading the market) or wait until it becomes pervasive (i.e. following the market). There were strongly held, but opposite, views within the IASB about whether the IASB should start a project.

2021 Agenda Consultation (FASB) and Third Agenda Consultation (IASB)

Both the IASB and the FASB have recently finalised their agenda consultations. The purpose of this meeting was to provide both boards with an opportunity to share comments and ask questions about these consultations. The FASB’s new project on software costs sparked some interest among IASB members. The IASB Chair noted that both boards will look into issues around intangibles and cash flow statements and that US GAAP and IFRS are not converged for those areas. He said it would be good to exchange information between the boards on these projects, keeping the broader constituency of both boards in mind.

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

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