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.

The DP considers three alternatives for accounting for pension plans in the scope of the project:

• capped asset return approach;
• fair-value based approach;
• fulfilment value approach.

The DP and a press release are available on the EFRAG website. Comments are due by 15 November 2019. There is also a short video presentation explaining the main ideas behind the DP.

The MCCG discussed the following topics:

• Overall proposed approach to reporting business model, strategy, operating environment and risks including cross-cutting issues;
• Business model;
• Strategy; and
• Operating environment and risks.

For more information, see the summary on the IASB website.

Professor Tarca's 24 minute webcast discusses:

• Definition and importance of comparability;
• research evidence in four research areas:
  • Policy choice;
  • Measuring compliance;
  • Comparing numbers derived in accounting systems; and
  • Comparability and market outcomes;
• Tools the IFRS Foundation uses to promote comparability; and
• IASB achievements and challenges.

Please click to access the webcast on the IASB website.

EFRAG ​welcomes the IASB’s proposals to provide relief on hedge accounting requirements and to split the work in two phases. As stated in the draft comment letter, the ‘EFRAG supports the proposals for providing relief on hedge accounting requirements in these periods until the uncertainty ceases to exist regarding how the reform of IBOR rates will affect the cash flows of the hedged item and of hedging instrument because the details of the replacement of interest rate benchmarks are unknown’. In addition, the EFRAG believes that the second phase related to replacement issues should be addressed as soon as possible.

Comments on EFRAG's draft comment letter are requested by 31 May 2019. For more in­for­ma­tion, see the press release and the draft comment letter on the EFRAG website.

Companies' lease obligations are moving front and center onto the balance sheet, as a new leasing standard went into effect for both US GAAP and IFRS companies effective 1 January 2019. Because US GAAP and IFRS have decided on different solutions and transition methods, investors need to carefully consider the impacts of the new standards on the companies in which they invest. The CFA Institute has therfore prepared a guide to help investors understand the change they are about to witness. It provides the top ten considerations for investors as they evaluate the impact of the change to the new standard. As the most significant change and the greatest comparability challenges arise from lessee accounting, the report focuses on lessee accounting.

The top 10 considerations identfied in the report are:

Please click to access the report on the website of the CFA Institute.

In 2015, the FRC published a discussion paper on the same topic found that ‘whilst the system of financial reporting is not fundamentally flawed, there is a higher incidence of poorer quality annual reports by smaller quoted companies than by their larger counterparts’. Therefore, the FRC has deveopled a guide that offers practical, cost-effective suggestions on how smaller quoted companies can improve the quality of their financial reporting and suggested questions for audit committees to ask themselves and those associated with the financial reporting process that are designed to encourage the smaller quoted companies to reflect on current practices and consider areas for improvement. The guide not only builds on the 2015 discussion paper but also includes more recent developments such as three new international accounting standards, on revenue (IFRS 15), leases (IFRS 16) and financial instruments (IFRS 9), coming into effect in the last three years.

Please click to access the guide on the FRC website.

The topics covered during the meeting were the following (numbers in brackets are references to the corresponding paragraphs of the summary):

• Accounting treatment of ICOs and tokens in France (1–14): The ANC member provided an overview of the accounting regulation for Initial Coin Offerings and tokens issued by the ANC in December 2018. Aspects considered by the ASAF members were the application of IFRS, holders, prevalence, and legitimisation.
• Management commentary (15–36): The objective of the session was to receive the ASAF members' input on the staff's proposals. Aspects considered by the ASAF members were the interaction between management commentary and other reports, providing information 'through the eyes of management' and the interplay with users' information needs and with the concept of neutrality, forward-looking information in management commentary, and information about tax in management commentary.
• IFRS 17 Insurance Contracts (37–46): The objective of the session was to ask ASAF members’ views on the Board’s tentative decisions on possible amendments to IFRS17 Insurance Contracts. Topics discussed by the ASAF members were loans that transfer insurance risk, acquisition cash flows for renewals, profit allocation for some contracts, the risk mitigation option, balance sheet presentation, transition, and the level of aggregation.
• Onerous Contracts — Cost of Fulfilling a Contract (47–52): ASAF members provided preliminary views on the exposure draft.
• Accounting Policy Changes (53–58): ASAF members provided views on how to proceed with this project.
• Provisions (59–68): ASAF members provided views on research to date and future of this project. Topics discussed by the ASAF members were aligning the liability definition with the Conceptual Framework, clarifying which costs to include, clarifying whether the discount rate should reflect the own credit risk, and several other topics.
• Subsidiaries that are SMEs (69–74): The objective of the session was to obtain ASAF members’ views on the likelihood of a standard that permits a subsidiary of a parent entity that applies IFRSs to apply the recognition and measurement requirements of IFRSs and the disclosures requirements in the IFRS for SMEs, should the Board proceed with the project, being adopted in the ASAF members' jurisdictions.
• Application of IFRS Practice Statement 2: Making Materiality Judgements to reporting climate related and other emerging risk issues on financial statements (75–81): The AASB presented its December 2018 guidance Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB Practice Statement 2. The objective of the session was to obtain ASAF members’ advice on whether the guidance is useful and any similar recent developments in ASAF member jurisdictions.
• Improving the impairment testing model in IAS 36 Impairment of Assets (82–89): A representative of the AASB presented the AASB Research Report 9 Perspectives on IAS 36: A case for standard setting activity. The objective of the session was for the AASB to share the results of their research and seek feedback from other ASAF members.
• Business Combinations under Common Control (90–94): ASAF members provided views on the accounting approach to business combination under common control between entities that are wholly owned by the controlling party.
• Targeted standards-level review of disclosures (95–105): The purpose of the session was to seek ASAF members’ views on potential disclosure requirements identified by users of financial statements during outreach relating to IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement.
• IFRS Foundation – Due Process Handbook Review (106–113): The staff presented what was at the time of the meeting a preview of the amendments that were proposed on 30 April to the Due Process Handbook. The main amendments relate to effects analysis and agenda decisions.

A full summary of the meeting is available on the IASB's website.

The Board will consider three “sweep issues” related to its package of amendments to IFRS 17 Insurance Contracts. Additionally, the staff provide a summary of the discussions of the Transition Resource Group for IFRS 17 (TRG) meeting held on 4 April 2019. (See our IFRS in Focus for a summary of the meeting)

For goodwill and impairment the staff are responding to issues raised by the Board in April in relation to possible new disclosures that the acquirer of a business would be required to provide to help a user assess whether a business combination was a good investment decision and whether that business is performing as expected. The papers include a discussion of ways to present equity (or net assets) excluding goodwill. The staff are also proposing that the Discussion Paper propose that the requirement for an annual test for impairment of goodwill and intangible assets with an indefinite life staff be removed and an indicator-only approach be used.

One of the threads in the Disclosure Initiative is a targeted Standards-level review of disclosure requirements. The Board has been developing internal guidance for setting disclosure requirements which it decided to test on IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement. The staff present summaries of the outreach they have been undertaking since November 2018 and the different approaches they plan to take when reviewing IAS 19 and IFRS 13 disclosures.

For Primary Financial Statements, the staff are recommending that the Board develop an Exposure Draft for a new IFRS Standard to replace IAS 1 Presentation of Financial Statements, and that a Discussion Paper is not required.

The staff will present a summary of the feedback received on the Exposure Draft Onerous Contracts—Cost of Fulfilling a Contract. (See our IFRS in Focus for a summary of the ED).

Now that the IASB has published a revised Conceptual Framework, the IASB is considering whether IAS 37 Provisions, Contingent Liabilities and Contingent Assets should be revised. The staff are recommending that the Board align the definition of a liability in IAS 37 with the definition in the Conceptual Framework, including potentially replacing IFRIC 21 Levies with new requirements and illustrative examples in IAS 37. They also recommend that the Board clarify which costs to include in the measure of a provision and specify whether the rate at which an entity discounts a provision for the time value of money should include or exclude the entity’s own credit risk.

There is an education session for Rate-regulated Activities at which the staff will ask the Board for any suggestions to improve the understanding and clarity of the model that has been developed thus far.

The staff set out their approach to revising the Management Commentary Practice Statement and recommend that the Board provide additional guidance on the objective of management commentary, how to consider qualitative characteristics of useful financial information when providing management commentary and the content of management commentary.

The staff recommend that the IFRS for SMEs Standard should be aligned with new and amended IFRS Standards. The alternative would be to provide a stable platform that is updated only for specific problems brought to the Board’s attention. If the Board decides to take the recommended approach the staff set out ways to phase in updates. The staff also discuss IFRS 16 Leases to identify ways to simplify the requirements for SMEs.

More information

Our pre-meeting summaries are available on our May meeting notes page and will be supplemented with our popular meeting notes after the meeting.

The report for 2018 provides an overview of the IFRS Foundation’s activities during the past year and sets out the Foundation’s and IASB’s priorities for 2019.

For more information, see the press release and annual report (available in PDF format and inline XBRL version) on the IASB’s website.