Tentative agenda decisions currently available for comment
The IFRIC reviewed the following matters and tentatively decided that they should not be added to the IFRIC agenda. These tentative decisions, including recommended reasons for not adding the items to the IFRIC agenda, will be reconsidered at the IFRIC meeting in May 2010. Constituents who disagree with the proposed reasons, or believe that the explanations may contribute to divergent practices, are encouraged to communicate those concerns by
12 April 2010
by email to: ifric@iasb.org. Communications will be placed on the public record unless the writer requests confidentiality, supported by good reason, such as commercial confidence
IFRS 1 First-time Adoption of International Financial Reporting Standards ─ Accounting for costs included in self-constructed assets on transition
The IFRIC received two requests concerning the application of IFRSs for an entity that capitalises certain costs, including actuarial gains and losses, as part of self-constructed assets, in accordance with its previous GAAP accounting policies. On transition to IFRSs, the entity changes its accounting policy for actuarial gains and losses and determines that they should no longer be capitalised. The requests ask whether the entity should adjust the carrying amount of self-constructed assets on transition to IFRSs and, if not, how the change in its actuarial gains and losses accounting policy should be reflected in the carrying amount of self-constructed assets in subsequent reporting periods.
The IFRIC noted that paragraph 7 of IFRS 1 requires an entity to use ‘the same accounting policies in its opening IFRS statement of financial position and throughout all periods presented in its first IFRS financial statements’.
The IFRIC concluded that the issue is not currently widespread, although it may impact certain entities in jurisdictions transitioning to IFRS, and that there are not significantly divergent interpretations (either emerging or already existing in practice). Therefore, the IFRIC [decided] not to add this issue to its agenda.
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – Reversal of disposal group impairment losses relating to goodwill
The IFRIC received a request for guidance on whether an impairment loss for a disposal group classified as held for sale can be reversed if it relates to the reversal of an impairment loss recognised for goodwill.
The IFRIC noted a potential conflict between the guidance in paragraph 22 and paragraph 23 of IFRS 5 relating to the recognition and allocation of the reversal of an impairment loss for a disposal group when it relates to goodwill. However, the IFRIC also observed that the issue may not be resolved efficiently within the confines of existing IFRSs and the Framework and that it is not probable that the IFRIC will be able to reach a consensus on a timely basis.
The IFRIC also noted the decision taken by the Board in December 2009 not to add a project to its agenda to address IFRS 5 impairment measurement and reversal issues at this time. Consequently, the IFRIC [decided] not to add this issue to its agenda and recommended that the Board address this issue in a post-implementation review of IFRS 5.
IAS 26 Accounting and Reporting by Retirements Benefit Plans – Valuation of plan assets
A request was received to clarify the interaction between IAS 26 and IAS 39 Financial Instruments: Recognition and Measurement relating to the accounting for retirement benefit plan investments (plan assets), in the financial statements of retirement benefit plans prepared in accordance with IAS 26.
The IFRIC observed that the guidance in paragraph 32 of IAS 26 is clear that plan assets shall be carried at fair value. The IFRIC also noted that it is clear that changes in the fair value of plan assets should be presented and disclosed in accordance with paragraph 35 of IAS 26 in the statement of changes in net assets available for benefits.
The IFRIC concluded that IFRSs are clear and that divergent interpretations are not expected in practice. Consequently, the IFRIC [decided] not to add this issue to its agenda or to recommend an amendment to the standards.