IFRIC work in progress
The IFRIC reviewed a summary of outstanding issues. With the exception of two outstanding issues, all requests received and considered by the staff were discussed at this meeting. The remaining two issues are expected to be discussed at the May 2010 IFRIC meeting.
IFRS 1 First-time Adoption of International Financial Reporting Standards – Fixed date in derecognition exception
A request was received to replace the fixed date of 1 January 2004 in paragraph B2 of IFRS 1 (relating to the derecognition exception) with ‘the date of transition to IFRSs’. The date of 1 January 2004 was originally included as a result of the revision to IAS 39 Financial Instruments: Recognition and Measurement in 2003.
The IFRIC debated the following courses of action: changing the fixed date to a relative date (for example the ‘date of transition to IFRSs’), deleting paragraph B2 altogether, or making no change to current requirements. The IFRIC noted that they needed more information before they could make a decision.
The IFRIC requested the staff to perform more research and analysis on the issue including review of transition to IFRSs in the context of the Derecognition project. The IFRIC also requested the staff to perform outreach activities with members of the National Standard Setters group to understand better the consequence of removing or amending the exception.
The IFRIC plans to continue its discussion of this issue at the May 2010 meeting.
IAS 1 Presentation of Financial Statements – Comparative information
The IFRIC discussed issues in IAS 1 related to the requirements for comparative information specifically when an entity provides some, but not all individual financial statements beyond the minimum comparative information requirements. One issue relates to the interaction of the requirements for compliance with IFRSs, the requirements for comparative information and the concept of ‘equal prominence’. The second issue relates to determining the relevant date in instances when a statement of financial position as at the beginning of the earliest comparative period is required in accordance with paragraph 39 of IAS 1.
The IFRIC noted that paragraphs BC22 and BC32 provide the Board’s rationale that includes an emphasis on providing information that enables an analysis of the financial statements of the current period. However, the IFRIC also believes that the current guidance in IAS 1 may lead to diversity in practice in understanding the requirements.
At the March joint Board meeting, the IASB and FASB will deliberate these issues in the context of the Financial Statement Presentation project. Therefore, the IFRIC’s preliminary views discussed at the March 2010 IFRIC meeting will be provided to the Boards for their consideration. At the May 2010 meeting, the IFRIC will continue its deliberation of these issues taking into account the Boards’ decisions in the Financial Statement Presentation project.
IAS 21 The Effects of Changes in Foreign Exchange Rates – Repayment of investment/CTA
The Board received a request for a proposed amendment to IAS 21. The request proposes a clarification as to the circumstances in which the separate foreign currency equity reserve related to the retranslation of the net assets of an investor’s net investment in a subsidiary (often referred to as ‘CTA’) should be reclassified to profit or loss.
At the March 2010 meeting, the IFRIC did not make any decisions. Rather the IFRIC directed the staff to continue its research and analysis of this issue. The IFRIC will continue its deliberation of this issue at a future meeting.
IFRIC outstanding issues update
The IFRIC reviewed a summary of outstanding issues. With the exception of two outstanding issues, all requests received and considered by the staff were discussed at this meeting. The remaining two issues are expected to be discussed at the May 2010 IFRIC meeting.