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. This tentative decision, including recommended reasons for not adding the item to the IFRIC agenda, will be reconsidered at the IFRIC meeting in November 2008. Constituents who disagree with the proposed reasons, or believe that the explanations may contribute to divergent practices, are encouraged to communicate those concerns by 13 October 2008 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
....................................................................................................................
IAS 39 Financial Instruments: Recognition and Measurement—Valuation of restricted securities
The IFRIC received a request for guidance on whether a discount must be applied to the quoted market price when establishing the fair value of a security quoted in an active market when there is a contractual, governmental or other legally enforceable restriction that prevents the sale of the security for a specified period. Guidance was requested only in situations in which the restriction applied to the current holder of the security and would not transfer to another entity.
The IFRIC noted that any guidance it could provide would be in the nature of implementation guidance rather than an interpretation. In its view, any additional guidance that is necessary should be provided by the Board in its project on fair value measurement.
The IFRIC therefore [decided] not to add this issue to its agenda.
Location: London UK
Date: September 2008
Observer notes:
Meeting audio:
....................................................................................................................
IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction—Stable workforce assumption
The IFRIC received a request to address an issue arising from IFRIC 14. The issue relates to the economic benefit available in the form of reductions in future contributions when there is a minimum funding requirement. IFRIC 14 requires the economic benefit to be determined assuming a stable workforce in the future unless the entity is demonstrably committed at the end of the reporting period to make a reduction in the number of employees covered by the plan. The request asserted that in some circumstances the assumption of a stable workforce may understate the economic benefits available to the entity as a reduction in future contributions. The request noted that contributions to a plan are recognised as an expense, not an asset, if they provide no economic benefits in accordance with IFRIC 14. Therefore, by choosing the timing and the level of such contributions, an entity can affect its reported earnings.
The IFRIC noted that the requirements of IFRIC 14 regarding the assumption of a stable workforce are clear. The issue was discussed extensively during the development of IFRIC 14 and the request provides no new information to cause the IFRIC to reconsider it.
The effect of the timing of voluntary contributions described in the request is an inherent part of the limit on the asset that can be recognised in respect of a surplus in accordance with IAS 19.
The IFRIC therefore [decided] not to add this issue to its agenda.
Location: London UK
Date: September 2008
Observer notes:
Meeting audio: