The Committee discussed an ongoing matter, the comment letter analysis for one tentative agenda decision and an educational paper.

Ongoing matter

IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Negative low or new energy vehicle credits: In its November 2021 meeting, the Committee discussed 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. In the meeting, Committee members generally agreed with the staff's analysis that an entity that has generated negative credits has an obligation that meets the definition of a liability in IAS 37. The staff had edited the wordings according to some Committee members' suggestions and analysed the implications of the consensus in IFRIC 6 Liabilities arising from Participating in a Specific Market—Waste Electrical and Electronic Equipment in an appendix to the paper. In this meeting, despite the concerns raised by some Committee members on various aspects, the Committee decided, by a majority vote, to finalise the agenda decision with proposed refinements to the wordings.

Comment letter analysis

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 analysed the comment letters and recommended finalising the agenda decision with minor editorial changes. In this meeting, despite the concerns raised by some Committee members, the staff still considered that there are merits in finalising the agenda decision and the Committee decided, by a majority vote, to finalise the agenda decision with some editorial changes.

Education session

IFRS 17 Insurance Contracts—Profit recognition for annuity contracts: The Committee received a submission about determining how to recognise unearned profit as revenue based on the services an entity provides to policyholders of annuity contracts in a scenario where an entity includes unearned profit in the measurement of insurance contracts and subsequently recognises it as revenue as the entity provides services. The paper provided an overview of the applicable IFRS 17 requirements and other background related to those requirements.

Administrative matters

Work in progress: The staff are in the process of analysing three matters:

• Rent Concessions: Lessors and Lessees (IFRS 16 and IFRS 9)
• Special Purpose Acquisition Companies (SPAC): Accounting for warrants at acquisition (IFRS 2 or IAS 32)
• Special Purpose Acquisition Companies (SPAC): Classification of Public Shares as Liabilities or Equity (IAS 32)

More In­for­ma­tion

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