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Pre-meeting summaries for the May IASB meeting

09 May 2019

The IASB will meet in London on 14–16 May 2019 to discuss nine topics. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed, we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

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.

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IFRS Foundation publishes its 2018 annual report

07 May 2019

The IFRS Foundation has published its annual report and audited financial statements for the year ended 31 December 2018.

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.

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EFRAG begins public consultation on equity instruments

06 May 2019

The EFRAG has launched a public consultation exploring potential alternative accounting treatments to fair value measurement for long-term investment portfolios of equity and equity-type instruments.

The consultation represents the EFRAG’s efforts to meet the European Commission’s Action Plan on Sustainable Finance initiative. Through the use of a questionnaire, the EFRAG will gather views from constituents on possible alternative accounting treatments meeting the following objectives:

  • “[P]roperly portray the performance and risks of long-term investment business models, in particular for those equity and equity-type investments that are much needed for achieving the UN Sustainable Development Goals and the goals of the Paris Agreement on Climate Change;”
  • “[P]referably enhance investors’ insight in the long-term performance of investments, as opposed to recognising point-in-time market-based value changes in reported profit or loss during the duration of the equity investment.”

Comments on the questionnaire are due by 5 July 2019. Respondents are encouraged to read the accompanying EFRAG Secretariat background paper. For more information, see the press release on the EFRAG’s website.

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IPSASB takes first step in establishing a comprehensive measurement framework for the public sector

06 May 2019

The International Public Sector Accounting Standards Board (IPSASB) has released a consultation paper 'Measurement' that addresses how measurement bases are determined in the public sector.

In an effort to better communicate with its constituents, the IPSASB is testing a new consultation approach. Therefore, the consultation document contains two separate sections:

  • A concepts-based discussion in the consultation paper which
    • lays out proposed guidance for measurement bases for the assets and liabilities most commonly used by public sector entities when applying IPSAS;
    • proposes the development of a single standard which will provide definitions and guidance on the main measurement bases, while other IPSAS will continue to provide guidance on which particular measurement basis is to be used;and
    • identifies areas where the IPSASB has reached preliminary views; and
  • An illustrative exposure draft, which illustrates what a draft IPSAS could look like, given the IPSASB’s preliminary views.

Comments on the consultation paper are requested by 30 September 2019.

Please click for the following information on the IPSASB website:


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May 2019 IASB meeting agenda posted

06 May 2019

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 14–16 May 2019. There are nine topics on the agenda.

The Board will discuss the following:

  • Provisions
  • Implementation matters
  • Primary financial statements
  • Amendments to IFRS 17 Insurance Contracts
  • Disclosure initiative — Targeted standards-level review of disclosures
  • Management commentary
  • Review of the IFRS for SMEs
  • Rate-regulated activities
  • Goodwill and impairment

The session on amendments to IFRS 17 Insurance Contracts will be rather short (30 minutes on Wednesday afternoon) as the IASB will only discuss sweep issues and the comment period for the forthcoming exposure draft, which the staff, after obtaining permission of the DPOC, proposes to set at 90 days.

The full agenda for the meeting can be found here. We will post any updates to the agenda, our comprehensive pre-meeting summaries as well as observer notes from the meeting on this page as they become available.

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EFRAG extends comment period for NETs discussion paper

03 May 2019

The European Financial Reporting Advisory Group (EFRAG) has extended the comment letter deadline for its discussion paper 'Non-exchange Transfers ('NETs'): A role for societal benefit?' The revised deadline for comments is Tuesday, 14 May 2019 (formerly 30 April 2019).

For more information, please see our November 2018 story on the EFRAG's DP as well as the press release discussing the comment extension on the EFRAG website.

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IASB publishes proposed amendments to IAS 39 and IFRS 9 in the context of the IBOR reform

03 May 2019

The International Accounting Standards Board (IASB) has published an exposure draft 'Interest Rate Benchmark Reform (Proposed amendments to IFRS 9 and IAS 39)' that constitutes a first reaction to the potential effects the IBOR reform could have on financial reporting. Comments are requested by 17 June 2019.



Interbank offered rates (IBORs) are interest reference rates, such as LIBOR, EURIBOR and TIBOR, that represent the cost of obtaining unsecured funding, in a particular combination of currency and maturity and in a particular interbank term lending market.

Recent market developments have brought into question the long-term viability of those benchmarks. The Board is monitoring further developments in this regard in order to determine whether there are any implications for the existing accounting requirements. The focus of the project is currently on financial instruments although an IBOR reform would later definitely also have impact on any standard dealing with discounting.

The amendments proposed today deal with issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative interest rate and consider the implications for specific hedge accounting requirements in IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement, which require forward-looking analysis. 


Suggested changes

The changes proposed in ED/2019/1 Interest Rate Benchmark Reform (Proposed amendments to IFRS 9 and IAS 39)

  • modify specific hedge accounting requirements so that entities would apply those hedge accounting requirements assuming that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result of interest rate benchmark reform;
  • require specific disclosures about the extent to which the entities' hedging relationships are affected by the proposed amendments; and
  • note that the amendments would be mandatory.

The proposed amendments also note that the Boards proposes to amend the hedge accounting requirements only as specified in the exposure draft and that the proposals are not intended to provide relief from any other consequences arising from interest rate benchmark reform. Moreover, the exposure draft notes that if a hedging relationship no longer meets the requirements for hedge accounting for reasons other than those specified in the exposure draft, then discontinuation of hedge accounting is still required.

Comments on the proposed changes are requested by 17 June 2019.


Effective date

The exposure draft proposes that the amendments would be effective for annual periods beginning on or after 1 January 2020 and would be applied retrospectively. Early application would be permitted.


Additional information

Please click for:

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FASB Chairman reflects on collaboration with IASB

02 May 2019

At a financial reporting conference at Baruch College in New York City, FASB Chairman Russell Golden discussed the challenges of ‘bilateral convergence’ between IFRS and US GAAP, what the Boards have accomplished together, and how the Boards will work together in the future.

Mr Golden began his speech by acknowledging that comparable global accounting standards help reduce complexity and costs in financial reporting. He stated, however, that “by 2013, [the FASB had] come to realize that the ideal of single set high-quality global accounting standards was just that—an ideal. Different starting points, different cultures, and different legal systems made bilateral convergence impossible to achieve.”

After he highlighted the success of the joint FASB-IASB projects on business combinations, noncontrolling interests, fair value measurements, borrowing costs, segment reporting, stock compensation, and nonmonetary exchanges, Mr Golden reflected on the diverging strategies for the Boards’ projects on revenue recognition, leases, credit losses, and insurance. He closely examined the reasons for divergence, which were usually due to cost and complexity for US stakeholders.

Mr Golden discussed how the FASB is working to “[forge] a new model for how we support the goal of more comparable, high-quality accounting standards worldwide,” which includes:

  • Development of high-quality GAAP — Mr Golden noted that considering opportunities to align with IFRS when possible is ‘embedded’ in the FASB’s process. He said the FASB is in ‘constant contact’ with the IASB about the IASB’s projects and that the Boards share research activities to “continue progress toward improved, aligned solutions.”
  • Active participation in the Accounting Standards Advisory Forum (ASAF) — Mr Golden described the FASB’s commitment to the ASAF, which advises the IASB as it develops IFRS. He called the FASB’s involvement “an important opportunity to represent U.S. interests in the IASB’s standard-setting process” and noted that the ASAF provides a “valuable opportunity to work together with other standard setters on issues of common interest.”
  • Enhancing relationships with other national standard setters — Mr Golden mentioned that the FASB meets individually with standard setters from many countries to “exchange ideas on improving our respective standards. This process also helped promote the broader flow of information and ideas that mutually inform our thinking. And to contribute to an environment that will foster greater alignment of standards across the globe.”

He made clear in his speech that the FASB will continue to work closely with the IASB to improve accounting standards worldwide. He also briefly provided his own opinion on sustainability reporting:

I think we should follow the IASB’s lead and remain focused on improving the financial statement. And leave sustainability reporting and other performance metrics—however important they may be—to other experts.

The full text of Mr Golden’s speech is available on the FASB's website.   

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AASB updates research paper on climate-related risks disclosure

02 May 2019

The Australian Accounting Standards Board (AASB) has released the latest version of 'Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB Practice Statement 2'.

The research paper, originally published in December 2018, contains several updates and guides directors, preparers and auditors when preparing and auditing financial statements. Even though the guidance is not mandatory, it represents the IASB’s best practice interpretation of materiality.

Please click to access the updated research paper on the AASB website.

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IFRS Foundation consults on IFRS IC and IASB agenda decisions

30 Apr 2019

The Trustees of the IFRS Foundation have issued an updated IFRS Foundation Due Process Handbook for public comment. Clarifications regarding the role and status of agenda decisions published by the Interpretations Committee (IFRS IC) and amendments to make agenda decisions a tool for the Board are the most prominent proposed amendments.

On IFRS IC agenda decisions, the Handbook continues to note that agenda decisions do not have the status of IFRSs and cannot add or change requirements in the standards, however, it now also states that in many cases an agenda decision includes explanatory material that explains how principles and requirements in IFRSs apply to the transaction or fact pattern described in the agenda decision. As these explanations provide "new information that was not otherwise available and could not otherwise reasonably have been expected to be obtained", the Handbook states that entities might determine that they need to change an accounting policy as a result of an agenda decision.

The newly proposed Board agenda decisions are intended to support the consistent application of IFRSs by also providing explanatory material. The Board would publish agenda decisions when it has decided not to add a project to the standard-setting agenda but still concludes that consistency of application of the standards would be improved by providing material that explains how the applicable principles and requirements in the standards apply to a particular transaction or fact pattern. Again, the Handbook notes that agenda decisions do not have the same status as IFRSs, but that entities might nonetheless feel the need to change an accounting policy as a result of a Board agenda decision.

In addition to the proposed amendments on agenda decisions, the Trustees also propose to update Handbook regarding the procedures relating to the use of effects analysis to ensure that they are consistent with current activities.

Less prominent proposed updates regard the categories of education material produced by the IFRS Foundation, the consultation requirements for adding major projects to the Board’s work plan, the role of the IFRS Advisory Council, and the processes for approving amendments to the IFRS Taxonomy and the DPOC’s role in overseeing the IFRS Taxonomy due process.

Comments on the proposed updates are due by 29 July 2019. Please see the IASB website for the press release and the consultation document. The IFRS Foundation has also released a YouTube video with a short introduction of the consultation.

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