IASB March 2008
The Board redeliberated ten of the proposals in the exposure draft published in October 2007. The Board reaffirmed four of the proposed amendments with only minor or no changes from the proposals in the exposure draft without discussion. These proposed amendments were:
- Presentation of finance costs (IFRS 7 Financial Instruments: Disclosure )
- Components of borrowing costs (IAS 23 Borrowing Costs )
- Measurement of subsidiary held for sale in separate financial statements (IAS 27 Consolidated and Separate Financial Statements)
- Disclosure of estimates used to determine recoverable amount (IAS 36 Impairment of Assets)
The Board discussed six other proposals and tentatively decided to issue final amendments, subject to additional drafting changes, as summarised here.
The Board will discuss any sweep issues that arise from the drafting process in the April meeting before finalising these amendments for issue. The Board aims to publish the final amendments in May.
IAS 1 Presentation of Financial Statements - Current/non-current classification of derivatives
The Board tentatively decided to amend the proposals in the exposure draft to show more clearly how the similar terms used in IAS 1 and IAS 39 relate to each other. The Board also tentatively decided to explain in the basis for conclusions the difference between ‘held primarily for the purpose of trading’ under IAS 1 and ‘held for trading’ under IAS 39.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors - Status of implementation guidance
The Board tentatively decided to modify its proposed amendment to paragraph 9 to take into consideration the varying authority of the different types of guidance in standards. The Board reaffirmed its proposed amendments to paragraphs 7 and 11, which clarify that entities are not required to consider guidance that is not part of IFRSs.
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance - Government loans with a below-market rate of interest
The Board reaffirmed its proposed amendment, which requires government loans to be recognised and measured in accordance with IAS 39 reflecting a market interest rate. The Board tentatively decided to modify its proposal to clarify that a government grant would be recognised as equal to the difference between the cash received and the recognised amount of the loan. It would be accounted for using IAS 20. The Board also tentatively decided that the amendment should be applied prospectively to loans received after the effective date of the amendment.
IAS 38 Intangible Assets - Unit of production method of amortisation
The Board reaffirmed its proposal to remove the last sentence of paragraph 98 of IAS 38. The Board concluded that the principle in paragraph 97 of IAS 38 that ‘the amortisation method shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity’ is sufficiently clear. The Board also decided to add an explanation that the amendment applies to all intangible assets and is not limited to those arising in service concessions.
IAS 41 Agriculture - Point-of-sale costs
The Board reaffirmed its proposal to replace the term ‘point-of-sale costs’ with the term ‘costs to sell’ in IAS 41.
IAS 41 Agriculture - Additional biological transformation
The Board had proposed to remove the prohibition on taking ‘additional biological transformation’ into consideration when calculating the fair value of biological assets using discounted cash flows. The Board reaffirmed this proposal and also tentatively decided to remove ‘harvest’ from the definition of ‘biological transformation’. The Board tentatively decided that the proposed amendment should be applied prospectively.