The 20-minute podcast can be accessed through the press release on Accountancy Europe's website. It is the third in a series of podcasts focusing on different aspects of the crisis. The entire series is available on Accountancy Europe's podcast page.

Deviating slightly from the original proposal but not changing the core practical relief, the Board decided to allow the expedient to be applied to COVID-19-related rent concessions to payments originally due on or before 30 June 2021. The Board also decided to require disclosure of the amount recognised in profit or loss to reflect changes in lease payments that arise from COVID-19-related rent concessions. Finally, the Board decided that in the reporting period in which a lessee first applies the amendment, it is not required to disclose the quantitative information required by paragraph 28(f) of IAS 8. All decisions were supported by 13 Board members.

The amendment will have an effective date of 1 June 2020 with early application permitted. Despite the wording "annual reporting periods" the amendment would also be available for interim reports.

For lessors, the Board decided to take no further action. It argued that as many entities face significant challenges at the moment, there needs to be sufficient reason to undertake standard-setting, which the Board did not see enough evidence for. This decision was supported by all 14 Board members.

The Board did not see a need for re-exposure and no Board member intends to dissent from the issuance of the amendment. The Board is satisfied that it has complied with the applicable due process requirements and gave permission to begin the balloting process for the amendment. These decisions were supported by all 14 Board members.The staff expect issuing a final amendment on or around 28 May 2020.

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

The topics discussed at the meeting included:

• Primary financial statements.
• Financial instruments with characteristics of equity.
• IBOR reform and its effects on financial reporting.
• Management commentary.

For more in­for­ma­tion, see the meeting page and the meeting summary on the IASB's website.

The agenda is sum­marised below:

Agenda papers for this meeting are available on the IASB website.

This webcast discusses the Board’s approach to the second comprehensive review of the IFRS for SMEs Standard. A third webcast is expected at a later date and will discuss alignment of IFRS for SMEs Standards with IFRS Standards.

The IASB, in cooperation with the SME Implementation Group (SMEIG), has developed and issued a request for information seeking comments on strategic and general questions, specific sections of the IFRS for SMEs, as well as new topics and other matters related to the IFRS for SMEs.

For more in­for­ma­tion, see the press release on the IASB’s website.

Background

The issue was initially raised with the IFRS Interpretations Committee that had originally intended to develop an interpretation of IAS 16 Property, Plant and Equipment to deal with it. However, during the course of discussions the Committee concluded that a narrow-scope amendment to IAS 16 would be a better solution. The IASB developed an exposure draft published in June 2017 and has now finalised the amendments.

Changes

Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16) amends the standard to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss.

Effective date and transition

The amendments published today are effective for annual periods beginning on or after 1 January 2022. Early application is permitted. An entity applies the amendments retrospectively only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments.

Additional information

Please click for:

• IASB press release (link to IASB website)
• IFRS in Focus newsletter
• Our IAS Plus project page on IAS 16 — Proceeds before intended use

Annual Improvements to IFRS Standards 2018–2020 makes amendments to the following standards:

The amendments to IFRS 1, IFRS 9, and IAS 41 published today are all effective for annual periods beginning on or after 1 January 2022. Early application is permitted. The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.

Please click for the following additional information:

• IASB press release (link to IASB website)
• IFRS in Focus newsletter
• Our IAS Plus project page on Annual improvements — 2019-2020 cycle

Background

In March 2018, the IASB issued the 2018 Conceptual Framework and most references to the Framework included in IFRSs were updated to the 2018 Framework at that time. However, paragraph 11 of IFRS 3 Business Combinations, which continued to refer to the 1989 Framework, was not updated as this could have caused conflicts for entities applying IFRS 3.

Potential conflicts occur as the definition of assets and liabilities in the 2018 Framework differ from those in the 1989 Framework potentially leading to day 2 gains or losses post-acquisition for some balances recognised.

In a May 2019 exposure draft, the IASB identified three possible amendments to IFRS 3 that would update IFRS 3 without significantly changing its requirements. These amendments have now been finalised.

Changes

The changes in Reference to the Conceptual Framework (Amendments to IFRS 3):

• update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework;
• add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination; and
• add to IFRS 3 an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination.

Effective date

The amendments published today are effective for annual periods beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.

Additional information

Please click for:

• IASB press release (link to IASB website)
• IFRS in Focus newsletter
• Our IAS Plus project page on IFRS 3 — Updating a reference to the Conceptual Framework

Background

The IFRS Interpretations Committee received a request to clarify what costs an entity considers in assessing whether a contract is onerous. The Committee’s research revealed that, for some contracts, differing interpretations of the onerous contract requirements in IAS 37 Provisions, Contingent Liabilities and Contingent Assets could have a material effect on entities that enter into those contracts. Consequently, the Committee recommended that the Board clarifies the onerous contract requirements in IAS 37. The Board supported the Committee’s suggestion and published an exposure draft of proposed clarifications in December 2018, which were finalised today.

Changes

The changes in Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

Effective date and transition requirements

The amendments published today are effective for annual periods beginning on or after 1 January 2022. Early application is permitted.

Entities apply the amendments to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not restated.

Additional information

Please click for:

• IASB press release (link to IASB website)
• IFRS in Focus newsletter
• Our IAS Plus project page on IAS 37 — Onerous contracts

More in­for­ma­tion about the issues is set out below:

Click to access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Committee.