On Wednesday 22 February, the staff is bringing the Insurance Contracts project back to the Board to discuss the findings from the external editorial review of a draft of IFRS 17 Insurance Contracts. The staff is proposing some drafting changes to address matters identified in the review. The most significant changes proposed relate to changes to the carrying amount of the contractual service margin and introducing a narrow exemption to the requirements to group insurance contracts when a regulation or law constrains an entity from fully pricing the insurance risks transferred based on the characteristics of each policy holder.
For the project on financial instruments with the characteristics of equity, the papers explore whether rights and obligations arising from non-contractual terms (e.g. those arising from law) should be taken into account when classifying a financial instrument as equity. The Board will be looking at mandatory tender offers and bonds that are contingently convertible to ordinary shares as a result of regulatory requirements.
In January 2017 the Board decided to develop an exposure draft to amend IFRS 9 Financial Instruments in relation to symmetric prepayment options, to allow instruments with a prepayment options to qualify for amortised cost measurement. Having discussed the urgency of the amendment with the Due Process Oversight Committee the staff is proposing a 30 day comment period with the goal of finalising the amendment so that it can have an effective date of 1 January 2018.
The staff will update the Board on the project to amend the definition of a business in IFRS 3 Business Combinations. The staff will also formalise the steps for publishing a request for views as part of the post-implementation review of IFRS 13 Fair Value. And there will be a brief update on the Research Programme.
On Thursday 23 February, the staff will present an analysis of the proposed new accounting model for rate-regulated activities that was discussed in the December 2016 Board meeting. The papers look at the general approach of the model, the scope and the recognition of regulatory assets and regulatory liabilities.
The discussions on the Conceptual Framework project are entering the final stages. The papers for this meeting relate mostly to housekeeping matters: whether the appendix on ‘cash-flow-based measurement techniques’ should be retained; a review of existing Standards for potential inconsistencies with the revised CF, the effects of the revised CF; and minor comments on concepts supporting asset and liability definitions and due process.
The Board will discuss two issues relating to IFRS 9 Financial Instruments that have come from the Interpretations Committee and the Transitional Resource Group for Impairment of Financial Instruments.
Our pre-meeting summaries are available on our February meeting note page and will be supplemented with our popular meeting notes after the meeting.