January 2023 IASB meeting notes posted

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02 Feb 2023

The IASB met in London on 24-26 January 2023. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The following topics were discussed:

Maintenance and consistent application

The IASB deferred the final decisions on its project on Supplier Finance Arrangements to the February meeting. The staff recommended that entities be required to apply the amendments for annual reporting periods beginning on or after 1 January 2025, with earlier application permitted. However, some IASB members preferred an earlier effective date. 

Equity Method

IFRS 10 requires that when a parent loses control of a subsidiary it recognises a gain or loss. However, if the subsidiary is sold to an associate or joint venture of the parent, IAS 28 requires that the gain be limited to the  extent of the unrelated investors’ interests. This is perceived as a conflict. The IASB discussed four ways of addressing the issue and decided to continue exploring two of the alternatives in a future decision-making session.

Business Combinations—Disclosures, Goodwill and Impairment

In September 2022, the IASB tentatively decided to exempt entities from some disclosure requirements but did not establish the conditions for that exemption. The IASB decided that the exemption be based on whether disclosing the information could be expected to prejudice seriously any of the entity’s objectives for a business combination. Application guidance would set out the factors that would need to be considered when assessing if the exemption applies and entities would need to disclose the reason for applying the exemption.

The IASB also decided that, subject to the proposed exemption, an entity be required to disclose quantitative information about total expected synergies disaggregated by nature (e.g. total revenue, total cost synergies), when the synergistic benefits are expected to start, and how long they are expected to last.

Primary Financial Statements

The IASB decided:

  • Disaggregation: not requiring disaggregation of material information in relation to information about the nature of operating expenses that are included in a function line item in the statement of profit or loss; clarify the requirements for how disaggregated amounts are labelled (described); add a requirement that any line items presented in the statement(s) of financial performance and the statement of financial position must be recognised and measured in accordance with IFRS Accounting Standards but not prohibit the disaggregation of income and expenses in the notes to the financial statements into components not recognised and measured in accordance with IFRS Accounting Standards; and extend the proposals in the ED for the label ‘other’ to be used only if no more informative label can be found
  • Comprehensive income: withdraw the proposal to relabel the two categories of other comprehensive income as remeasurements permanently reported outside profit or loss and income and expenses to be included in profit or loss in the future
  • Statement of cash flows: confirm that entities other than entities with specified main business activities classify interest received as cash flows arising from investing; and confirm that entities with specified main business activities classify dividends received (other than dividends received investments accounted for using the equity method), interest paid and interest received in a single category of the statement of cash flows (either as cash flows from operating, investing or financing activities)

IFRS Accounting Taxonomy

In November 2022, the IASB published the Proposed IFRS Taxonomy Update—Lease Liability in a Sale and Leaseback and Non-current Liabilities with Covenants. The purpose of this meeting was to summarise the feedback received on the PTU and set out the next steps in the publication of the Update. As a next step, the IASB will begin the balloting process for these updates.

Disclosure Initiative—Subsidiaries without Public Accountability: Disclosures

The IASB decided to proceed with the proposal to include reduced disclosure requirements for IFRS 1. The IASB also decided that when an eligible subsidiary that elects, revokes an election or is no longer eligible to apply the Standard, it does not apply the requirements in IAS 8 on changes in accounting policies. Neither is it required to present a third statement of financial position. Finally, the IASB confirmed its proposal to consider amendments to the Standard when it publishes an exposure draft of a new or amended IFRS Accounting Standard.

An analysis of how the IASB’s work plan has changed as a result of the meeting is available here.

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

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