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IASB (International Accounting Standards Board) (blue) Image

IFRS Foundation appoints two IASB Board members

12 Mar 2019

The Trustees of the IFRS Foundation have announced the appointment of Tadeu Cendon and Rika Suzuki as IASB Board members.

Mr Cendon and Ms Suzuki will begin their five-year terms on 1 July 2019. They will replace Amaro Gomes and Takatsugu Ochi as their second-term ends on 30 June 2019. For more in­for­ma­tion, see the press release on the IASB’s website.

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Agenda for the March 2019 IFRS Advisory Council meeting

11 Mar 2019

An agenda has been released for the upcoming meeting of the IFRS Advisory Council, which is being held in London on 19–20 March 2019.

A summary of the agenda is set out below:

Tuesday 19 March 2019 (08:30-15:00)

  • Welcome and Chair's preview
  • Guest speaker: Ian McCafferty
  • Update on Board activities
  • Disclosure of sensitive information, including a closed session.
  • Summary findings of the self-review

Wednesday 20 March 2019 (9:00-15:30)

  • Update on Trustees and Foundation activities
  • Strategic stakeholder relationships
  • Breakout on Strategic stakeholder relationships
  • Feedback on disclosure of sensitive information
  • Review of SMEs
  • Feedback on strategic stakeholder relationships
  • Sum up meeting

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

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Agenda for the March 2019 CMAC meeting

08 Mar 2019

Representatives from the International Accounting Standards Board (IASB) will meet with the Capital Markets Advisory Council (CMAC) in London on 21 March 2019. The agenda for the meeting has been released.

The full agenda for the meeting is sum­marised below:

Thursday, 21 March 2019 (09:00-16:25)

  • IASB update
    • Follow up on issues discussed at the last CMAC meeting
  • Extractives
    • Issues faced when using financial statements of entities with extractive activities
  • Financial instruments with characteristics of equity
    • Overview of investors’ feedback on discussion paper
  • Targeted Standards-level review of disclosures
    • Potential disclosure objectives and requirements relating to IAS 19 and IFRS 13
    • User outreach summary
  • IAS 37 Provisions, Contingent Liabilities and Contingent Assets
    • Possible amendments to IAS 37
  • Management commentary practice statement
    • Challenges with the current practice on reporting performance and position in management commentary and the staff’s proposed approach to specific topics in revising the Practice Statement
  • Business combinations under common control
    • Measurement approaches being developed by the staff for BCUCC and whether it meets the needs of the receiving entity’s investors, lenders and other creditors

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

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Pre-meeting summaries for the March IASB meeting

08 Mar 2019

The IASB will meet at its offices in London on 12–14 March 2019. 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 the remaining topics in its review of concerns raised by stakeholders in relation to IFRS 17 Insurance Contracts: credit cards that provide insurance cover; transition requirements—risk mitigation option; implications for disclosure; and transition requirements. The staff are recommending some changes be made to IFRS 17 and IFRS 9 Financial Instruments. The Board will consider the package of amendments as a whole in its April 2019 meeting.

The staff recommend that the Board proceed to publish an Exposure Draft (in April or May) with proposed amendments to IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement to address the uncertainty introduced by IBOR reform.  Because this is an urgent matter, the comment period would be 45 days.

As part of the Disclosure Initiative the staff have developed two examples they think will help those preparing financial statements avoid explaining their accounting polices using boilerplate or generic descriptions or simply repeating the requirements of IFRS Standards. The examples would be included in the Materiality Practice Statement.

The Board will discuss two remaining issues in relation to the Exposure Draft Classification of Liabilities (as current or non-current). The staff are recommending refinements to the proposal in relation to classification of liabilities with equity-settlement features and classification of loans for which the right to defer settlement is subject to lending conditions that will not be tested until after the end of the reporting period.

The Board will continue its discussions of Business Combinations under Common Control by considering whether to develop a current value approach for all or some transactions that affect non-controlling interest (NCI) in the receiving entity (discussed in the December 2018 Agenda Paper 23) and a different approach, such as a predecessor approach, for transactions that affect lenders and other creditors in the receiving entity but do not affect NCI.

In the Primary Financial Statements project the staff are recommending that the Board require the separate presentation of several items in the primary financial statements (such as, in the statement of financial position, goodwill and investment in “integral” and “non-integral” associates and joint ventures accounted for using the equity method). However, they recommend that entities not be required to present amortisation, depreciation and research and development expenditure in the statement(s) of financial performance. They also recommend that entities be required to provide information about unusual items presented in the statement(s) of financial performance.

The staff will provide an overview of the feedback it has analysed in relation to the Discussion Paper on Financial Instruments with Characteristics of Equity.

The 2015 Agenda Consultation led to a project to consider whether subsidiaries that are SMEs should be permitted to apply IFRS standards with reduced disclosures. The staff paper sets out the objective of the project and provides some background information.

The staff will update the Board on progress in the Extractive Activities project, setting out the more significant developments in extractive activities since the publication of a Discussion Paper by the IASB in 2010. 

The staff recommends that in reviewing and revising the IFRS for SMEs Standard, that it should continue to be aligned with full IFRS Standards. This would mean updating the IFRS for SMEs Standard for new and amended IFRS Standards, while considering whether the changes to IFRS Standards are relevant to SMEs, if the requirements should be simplified and ensuring the outcome is proportionate.

More information

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

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IFRS Interpretations Committee holds March 2019 meeting

08 Mar 2019

The IFRS Interpretations Committee met on Tuesday 5 and Wednesday 6 March 2019. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

Agenda decisions to finalise

The Committee finalised eight tentative Agenda Decisions.

  • IFRS 11 Joint Arrangements — Sale of output by a joint operator. When the output a joint operator receives in a reporting period is different from the output to which it is entitled, the joint operator recognises revenue that depicts the transfer of output to its customers in each reporting period, i.e. revenue is recognised by applying IFRS 15.
  • IFRS 11 Joint Arrangements — Liabilities in relation to a joint operator's interest in a joint operation. IFRS 11 requires a joint operator to recognise its liabilities, which will include those for which it has primary responsibility including when an operator is the primary obligor for a lease contract.
  • IAS 38 Intangible Assets — Customer's right to access the supplier's software hosted on the cloud. In a cloud-computing arrangement for which the customer does not receive a software asset, the customer receives a service and the arrangement does not contain a lease.
  • IFRS 9 Financial Instruments — Physical settlement of contracts to buy or sell a non-financial item. When an entity contracts to buy or sell a non-financial item in the future at a fixed price, it is not appropriate at the time of physical settlement for an entity to (a) reverse the accumulated gain or loss previously recognised in profit or loss on the derivative, and (b) recognise a corresponding adjustment to either revenue (in the case of a sale contract) or inventory (in the case of a purchase contract).
  • IAS 23 Borrowing Costs — Revenue recognised over time. Borrowing costs would not be capitalised when the borrowings relate to the construction of a residential multi-unit real estate development for which revenue is recognised over time.
  • IFRS 9 Financial Instruments — Application of the highly probable requirement in a cash flow hedge relationship. In a cash flow hedge, a forecast transaction can be hedged if, and only if, it is highly probable. This requires consideration of the uncertainty over both the timing and magnitude of the forecast transaction. Furthermore, in the fact pattern analysed, forecast energy sales cannot be specified solely as a percentage of sales during a period.
  • IFRS 9 Financial Instruments — Credit enhancement in ECL measurement. If a credit enhancement is required to be recognised separately by IFRS Standards, an entity cannot include the cash flows expected from it in the measurement of expected credit losses.
  • IFRS 9 Financial Instruments — Presentation of contractual interest. The reversal of the unwinding of discount is presented as a reversal of credit impairment when the asset is cured.
  • Additional statement. IFRIC Update will include a statement that:

    The process for publishing an Agenda Decision might often result in explanatory material that provides new information that was not otherwise available and could not otherwise reasonably have been expected to be obtained. Because of this, an entity might determine that it needs to change an accounting policy as a result of an Agenda Decision. It is expected that an entity would be entitled to sufficient time to make that determination and implement any change (for example, an entity may need to obtain new information or adapt its systems to implement a change).

New issues

The Committee will discussed three new issues. In each case the Committee decided not to develop an Interpretation or amendment but instead publish a tentative Agenda Decision.

  • IFRS 15 Revenue from Contracts with Customers—Costs to fulfil a contract.  When revenue is recognised over time (in this case from a property sale, using the output method to measure progress) any costs incurred to fulfil the performance obligation are recognised as an expense when they are incurred.
  • IFRS 16 Leases—subsurface rights. When a contract between a land owner and another party gives the other party the right to place an oil pipeline in a specified underground space for 20 years, with the land owner retaining the right to use the surface area of the land above the pipeline, that contract contains a lease.
  • IAS 19 Employee Benefits—Effect of a potential discount on plan classification. The existence of a potential discount on the contribution an entity is obliged to make to a post-employment benefit plan, if the ratio of plan assets to plan liabilities exceeds a set level, does not preclude the plan from being a defined contribution plan.

Continuing discussions

Holdings of a cryptocurrency. The Committee decided to publish a tentative Agenda Decision stating that a cryptocurrency does not meet the definitions of cash or a financial asset but does meet the definition of an intangible asset. Accordingly, IAS 38 Intangible Assets applies to holdings of a cryptocurrency, unless the cryptocurrency is held for sale in the ordinary course of business—in which case IAS 2 Inventories applies.

Future discussions

The staff are working on potential amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to provide more guidance when a spot exchange rate is not observable.

The staff have also received a request in relation to a foreign currency hedge of a non-financial asset. The staff are in the process of analysing the matter.

More information

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

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DPOC to hold conference call on 11 March

08 Mar 2019

The Due Process Oversight Committee (DPOC) of the IFRS Foundation has published an agenda and papers for a conference call to be held on 11 March 2019.

The purpose of the call is to seek the approval of the DPOC for a shortened comment period for the forthcoming exposure draft on the IBOR reform and its effects on financial reporting.

In addition, the DPOC will discuss a question on the review of the due process handbook and education material carried forward from the DPOC meeting in January.

Please click to access the agenda and the papers for the call on the IASB website.

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We comment on six IFRS Interpretations Committee tentative agenda decisions

07 Mar 2019

We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 23, IAS 38, IFRS 9, and IFRS 11, as published in the November 2018 IFRIC Update.

More in­for­ma­tion about the issues is set out below:


Agenda decision supported?

More in­for­ma­tion

IAS 23 — Over time transfer of constructed good


o    Deloitte comment letter

o    Committee dis­cus­sion

IAS 38 — Customer’s right to access the supplier’s software hosted on the cloud  

No, we disagree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda. We note that the agenda decision suggests that all licencing agreements are out of the scope of IFRS 16. We believe that this conclusion is an interpretation of the requirements of IFRS 16.3(e) and of IAS 38.6.

o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 9 — Credit enhancement in the measurement of expected credit losses

Yes, we agree with the IFRS Interpretations Committee’s conclusion that if a credit enhancement is required to be recognised separately by IFRS Standards, an entity cannot include the cash flows expected from it in the measurement of expected credit losses. However, we note that IFRS Standards do not specifically address when separate recognition of a purchased credit enhancement is required.

o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 9 — Curing of a credit-impaired financial asset


o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 9 — Physical settlement of contracts to buy or sell a non-financial item


o    Deloitte comment letter

o    Committee dis­cus­sion

IFRS 11 — Sales of output by a joint operator

Yes; we agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda for the reasons set out in the tentative agenda decision, but recommend a change to provide clarity that no revenue or income should be recognised until the output is sold (whether it is revenue from contracts with customers or other income).

o    Deloitte comment letter

o    Committee dis­cus­sion

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

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Agenda for the April 2019 ASAF meeting

06 Mar 2019

The International Accounting Standards Board (IASB) has released an agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 1 and 2 April 2019.

The agenda for the meeting is sum­marised below:

Monday, 1 April 2019 (09:00-17:00)

  • Accounting treatment of ICOs and tokens in France
    • Overview of Autorité des normes comptables accounting regulation on ICO treatment and tokens in France.
  • Management commentary
    • Discuss the IASB staff’s proposed approach to specific topics in revising Practice Statement 1 Management Commentary.
  • IFRS 17 Insurance Contracts
    • Discuss tentative decisions made during IASB’s Board meetings on possible amendments to IFRS 17.
  • Onerous Contracts — Cost of Fulfilling a Contract (Proposed Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets)
    • Provide preliminary views on the exposure draft.
  • Accounting Policy Changes (Proposed Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors)
    • Provide views on how to proceed with this project.
  • Provisions
    • Provide views on research to date and future of this project.

Tuesday, 2 April 2019 (9:00-16:15)

  • Application of IFRS Practice Statement 2: Making Materiality Judgements to reporting climate related and other emerging risk issues on financial statements
    • Summary will be provided and ASAF will be asked for their views on the application of IFRS Practice Statement 2 and similar recent development.
  • Improving the impairment testing model in IAS 36 Impairment of Assets
    •    Summary will be provided and ASAF will be asked for their views on the improving IAS 36 and recommendation in the Research Report.
  • Business Combinations under Common Control
    • Provide views on the accounting approach to business combination under common control between entities that are wholly owned by the controlling party.
  • SMEs that are subsidiaries
    • Members will be asked if the Board were to develop an IFRS Standard that permits a subsidiary of a parent entity that applies IFRS Standards to apply the recognition and measurement requirements of IFRS Standards and the disclosures requirements in the IFRS for SMEs Standard would application be permitted in your jurisdiction?
  • Disclosure Initiative: Targeted Standards-level review
    • Provide views on feedback received from outreach with users of financial statements.
  • IFRS Foundation – Due Process Handbook Review
    • Provide views on the IFRS Foundation Trustees’ tentative decisions to amend the Due Process Handbook. 
  • Agenda planning

For more information, see the agenda on the IASB's website.

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IASB chair discusses primary financial statements

06 Mar 2019

In a speech given at the Seminario international sobre NIIF y NIF in Mexico City, Mexico, IASB chair Hans Hoogervorst discussed IFRS as global standards, recently issued major Standards, and the IASB’s project on primary financial statements.

Mr Hoogervorst began with a recap of the progress IFRS Standards have made globally with 144 jurisdiction which have adopted IFRS Standards. He mentioned that other jurisdictions, such as China, India, and Indonesia, have substantially converged their national accounting requirements with IFRS Standards and that the United States remains as the only large jurisdiction where adoption has stalled.

Next, he shared feedback on the big four Standards (IFRS 9, IFRS 15, IFRS 16, and IFRS 17) that have been issued and provided examples of how these Standards have benefited financial reporting.

Lastly, Mr Hoogervorst discussed the primary financial statements project, which he considers a ‘game changer’ since it provides an opportunity to improve the communications effectiveness of financial statements. He noted that:

Overall, our decisions thus far will create much more structure in the income statement and will definitely enhance comparability. The improved structure will make it much easier for users to find the components for the analysis that they prefer. The increased transparency around the adjustments that companies make in their non-GAAP measures will provide the investor with a lot of information about the underlying strategy of management.

For more information, see the transcript of the speech on the IASB’s website.

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IFRS Foundation Trustees and Due Process Oversight Committee hold January 2019 meeting

06 Mar 2019

The IFRS Foundation Trustees and the Due Process Oversight Committee (DPOC) met in Kuala Lumpur on 30-31 January 2019.

Meeting activities included the following:

  • Executive session:
    • Report of the Executive Director — The Trustees received a report from the Executive Director Lee White on activities since the last meeting.
    • Strategy review — The Trustees discussed a global environment scan and considered the key strategic themes that now face the Foundation.
    • Governance issues — The Trustees reviewed and approved the business case for improvements to the Foundation’s business process and technology
    • Operations analysis — The Trustees received presentations on the work plan for the Asia-Oceania Office and on the Foundation’s People Strategy.
    • Future meetings — Trustees confirmed that their next meetings would be in Munich in June 2019, New York in October 2019, and Brussels in early 2020.
    • Committee reports — The Trustees discussed reports from the Audit and Finance Committee, the Human Capital Committee, the Nominating Committee, and the DPOC. (A report of the DPOC meeting is attached to the meeting summary.)
  • IASB Chairman’s report — The Chair of the IASB provided the Trustees with a general update on the IASB’s technical activities, especially on IFRS 17 and possible amendments to the standard, the IBOR reform, accounting for goodwill, and primary financial statements.
  • Meetings in Kuala Lumpur — The Trustees met with members of the Asian-Oceanian Standard Setters Group and also discussed the work of the IFRS Foundation Advisory Council with its chair Joanna Perry. They also held a stakeholder dinner which was co-hosted by the Malaysian Accounting Standards Board.

The full report on the IFRS Foundation trustees’ and DPOC meeting is available on the IASB’s website.

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