Updates on IFRIC meetings given to the IASB
IASB January 2009
IFRIC 18 – approval of interpretation
The Board approved IFRIC 18 Transfers of Assets from Customers and decided that an entity:
- should apply IFRIC 18 prospectively to assets received from customers on or after 1 July 2009;
- may apply IFRIC 18 earlier if it obtained the valuations and other information needed to apply the Interpretation to past transfers at the time those transfers occurred;
- should disclose the date from which it applied the Interpretation.
IFRIC 9 – proposed consequential amendment
The Board was advised that the changed definition of a business combination within the revised IFRS 3 caused embedded derivatives acquired during the formation of a joint venture to be within the scope of IFRIC 9 Reassessment of Embedded Derivatives. The Board noted that common control transactions may also be within the scope of IFRIC 9 depending on which level of the group reporting entity is assessing the combination.
The Board decided to propose an amendment to paragraph 5 of IFRIC 9 to exclude from its scope embedded derivatives in contracts acquired in combinations of entities or businesses under common control and in the formation of joint ventures.
The Board decided to publish an exposure draft of this proposal in January with a 30-day comment period. The Board expects to finalise the amendment at its meeting in March.
IFRIC 16 – proposed amendment
IFRIC 16 Hedges of a Net Investment in a Foreign Operation does not permit hedge accounting if the hedging instrument is held by the foreign operation that is being hedged. At this meeting, the Board decided to propose an amendment to paragraph 14 of IFRIC 16 to remove this restriction.
The Board decided to publish an exposure draft of this proposal in January with a 30-day comment period. The Board asked the staff to present an analysis of the comment letters at the IFRIC meeting in March to obtain input from the IFRIC. The Board expects to finalise the amendment at its meeting in March.
IFRIC 14 – voluntary prepayments
The Board considered a proposal to amend IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction to eliminate an unintended consequence that arises from some voluntary prepayments to a defined benefit plan that is subject to a minimum funding requirement.
The Board tentatively decided to amend IFRIC 14 so that an entity recognises an asset for a prepayment that will reduce future contributions by the entity. (This is View C as set out in the observer notes). The staff will draft for written ballot an exposure draft proposing these changes.
Meeting Audio Playback:
23 January 2009
London UK
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IASB July 2008
The Director of Implementation Activities reported on the IFRIC’s meeting on 10 and 11 July. Details of the meeting had been published in IFRIC Update.
The IFRIC had started its redeliberations of draft Interpretations D23 Distributions of Non-cash Assets to Owners and D24 Customer Contributions, and confirmed its conclusions that it should develop interpretations on both topics.
On D23, the IFRIC decided to continue the project without changing its scope. However, it directed the staff to redraft the Interpretation to clarify that transactions in which the shares of group entities are distributed to shareholders outside the group do not meet the definition of common control transactions in IFRS 3 Business Combinations and would therefore be within the scope. The IFRIC also concluded that the dividend payable should be measured by reference to the fair value of the assets to be distributed and that any gain on the settlement of the dividend payable should be reflected in profit or loss. The IFRIC decided to recommend that the Board amend IFRS 5 to make it applicable to such distributions.
On D24, the IFRIC directed the staff to carry forward the proposals for the recognition and measurement of the contributed asset. However, it also directed the staff to develop additional examples for it to consider and to develop indicators based on IAS 18 Revenue to help identify performance obligations arising from a customer contribution.
The IFRIC considered the staff’s analysis of comments received on the Board’s exposure draft Group Cash-settled Share-based Payment Transactions and redeliberated the scope and measurement proposals. The IFRIC will recommend that the Board amend some defined terms and paragraph 3 of IFRS 2 Share-based Payment to ensure that all relevant transactions are included in its scope. The staff will bring the proposals to the Board in September.
The IFRIC had confirmed as final one tentative agenda decision that had been published after its meeting in May and reached three tentative agenda decisions that were published for comment in IFRIC Update.
Meeting Audio Playback:
23 July 2008
London UK
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IASB May 2008
The Director of Implementation Activities reported on the IFRIC’s meeting on 8 May. Details of the meeting had been published in IFRIC Update. The IFRIC had completed its redeliberations of draft Interpretations D21 Real Estate Sales and D22 Hedges of a Net Investment in a Foreign Operation, voted, and confirmed each consensus. Subject to drafting changes, the IFRIC directed the staff to present the final Interpretation to the IASB for approval at its meeting in June 2008.
On D21, the staff had developed a flowchart to illustrate how to determine whether an agreement for the construction of real estate was in the scope of IAS 18 or IAS 11. The IFRIC had concluded that the flowchart provided useful guidance and that it should be included in the final Interpretation. At this meeting the staff presented a revised version of the flowchart to provide an opportunity for the Board to ask questions about the logic underlying the final Interpretation. If the Board agreed with the IFRIC’s conclusions reflected in the flowchart, its review of the Interpretation should focus on ensuring those conclusions were clearly set out. The Board identified a few areas it would specifically consider to ensure that the flowchart was clear when considered in conjunction with the complete Interpretation.
The IFRIC was undertaking the preliminary consideration of comments received on the Board’s exposure draft Group cash-settled share-based payment transactions and had approved the staff’s project plan for the redeliberations. In response to constituents’ comments, the Board directed the staff to draft the final amendments to incorporate both IFRIC 8 and IFRIC 11 into the body of IFRS 2.
The IFRIC confirmed as final two tentative agenda decisions that had been published and published one tentative agenda decision for comment. The staff had presented a proposed plan for developing an agenda decision recommendation on regulatory liabilities (and assets). Several new issues had been submitted and the staff hoped to present most of them to the IFRIC for tentative agenda decisions at the meeting in July 2008
Meeting Audio Playback:
20 March 2008
London UK
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IASB March 2008
The IFRIC Co-ordinator reported on the IFRIC’s meeting of 6 March. Details of the meeting have been published in IFRIC Update.
The IFRIC had continued its redeliberations of draft Interpretations D21 Real Estate Sales and D22 Hedges of a Net Investment in a Foreign Operation. On D21, the staff had developed a flowchart to illustrate how to determine whether a real estate sale agreement was within the scope of IAS 18 or IAS 11 and two approaches to finalising the interpretation. The IFRIC asked the staff to make some modifications to the flowchart and directed the staff to draft a final interpretation reflecting the approach recommended by the staff. The staff expected that the IFRIC would approve the final interpretation at its meeting in May and the Board would be asked in June to approve it for issue. The IFRIC Co-ordinator asked the Board to consider the approach adopted by the IFRIC and to communicate any concerns in advance of the IFRIC’s meeting in May. On D22, the IFRIC had asked the staff to develop examples to illustrate the application of the conclusions in the draft Interpretation. These examples were considered and the IFRIC reaffirmed its previous conclusions. However, the analysis of the examples highlighted some issues that should be dealt with in the interpretation. The IFRIC directed the staff to draft the final interpretation for consideration at its meeting in May. Once again, the staff expected the final interpretation to be presented to the Board in June for approval.
The IFRIC confirmed one tentative agenda decision which was being published as final and reached two tentative agenda decisions that were being published for comment. A request for an interpretation had recently been received and was being analysed by the financial instruments team.
Meeting Audio Playback:
12 March 2008
London UK
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IASB January 2008
The IFRIC Co-ordinator reported on the IFRIC’s meeting in January. Details of the meeting had been published in IFRIC Update, which was available on the IASB Website.
The IFRIC had begun its redeliberations of draft Interpretations D21 Real Estate Sales and D22 Hedges of a Net Investment in a Foreign Operation by considering comments received. On D21, the IFRIC was focusing on reaching conclusions on real estate sales before it considered the draft Interpretation’s applicability to other situations. Application of the draft Interpretation to industries other than real estate was a concern of respondents. The staff is developing a flowchart to illustrate the accounting for real estate sale agreements in accordance with IAS 18 and IAS 11 for the IFRIC to consider at its next meeting.
On D22, most respondents agreed with the IFRIC’s conclusions in the draft Interpretation although many asked for more guidance on its application to specific situations. The IFRIC confirmed its conclusions but asked the staff to develop a comprehensive example to illustrate their application. This example will be considered at the next meeting and should resolve outstanding concerns raised by respondents.
The IFRIC confirmed its tentative agenda decisions on five issues, which were then published as final, and reached a tentative agenda decision on one issue. One tentative agenda decision from November was not finalised because more work was needed to clarify the reason for it. One issue was discussed but required further research by the staff. A request for an interpretation had recently been received but the staff were expecting another submission on the same topic shortly and intended to analyse them at the same time.
Meeting Audio Playback:
22 January 2008
London UK
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IASB November 2007
The IFRIC co-ordinator reported on the IFRIC’s meeting in November. Details of the meeting had been published in IFRIC Update, which was available on the IASB Website.
The IFRIC had continued its discussions on customer contributions and non-cash distributions to shareholders and had considered draft interpretations on both projects. The drafts will be circulated to the Board in late November or early December for negative clearance before publication. As part of its recommendations, the IFRIC will propose changes to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations in respect of non-cash distributions to shareholders. Therefore, those proposals will be presented for approval by the Board at its meeting in December.
The IFRIC reached final agenda decisions on two of the three remaining issues relating to IAS 19 Employee Benefits. It also reached tentative agenda decisions on five other issues. One issue, related to a scope exception from IAS 39 Financial Instruments: Recognition and Measurement for contracts to buy or sell an acquiree in a business combination, raised questions that the Board might consider as part of its annual improvements project
Meeting Audio Playback:
13 November 2007
London UK
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IASB September 2007
The IFRIC chairman reported on the IFRIC’s meeting in September. He pointed out that details of the meeting had been published in IFRIC Update, which was available on the IASB Website.
The IFRIC had continued its discussions on customer contributions, non-cash distributions to shareholders and group cash-settled share-based payment transactions. The IFRIC plans to consider draft interpretations relating to customer contributions and non-cash distributions to shareholders at its next meeting. As part of its recommendations, the IFRIC is likely to propose changes to standards in respect of non-cash distributions to shareholders and group cash-settled share-based payments. Therefore, the Board would be required to vote before the IFRIC could publish its recommendations for comment.
On two issues related to IAS 39, the IFRIC staff is undertaking further analysis. Once that analysis is complete, the IFRIC will consider whether it should recommend to the Board changes to IAS 39 to help remove diversity in practice.
The IFRIC reached final decisions to recommend that the Board, as part of its annual improvements process, include further guidance on identifying whether an entity is acting as an agent or a principal in IAS 18 and clarify the interaction between the disclosure requirements of IFRS 5 and other standards.
Meeting Audio Playback:
19 September 2007
London UK
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IASB Meeting July 2007
The staff reported on the IFRIC’s meeting in July, details of which were about to be published in IFRIC Update.
The IFRIC continued its discussions on customer contributions and determined the scope for its new project on non-cash distributions to shareholders. On two issues related to IAS 39, the IFRIC published tentative decisions in May. As a result of comments by respondents, the staff intended analyse the issues further and the IFRIC deferred its decision on whether to confirm the tentative agenda decisions. In both cases, the IFRIC might recommend that the Board clarify the requirements of IAS 39.
The IFRIC reached final or tentative decisions to draw the Board’s attention to four other issues for consideration as part of either the annual improvements process or other projects.
Meeting Audio Playback:
17 July 2007
London UK
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IASB Meeting June 2007
The Board considered two IFRIC Interpretations. The first was IFRIC X IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The Board approved the Interpretation for issue. The second was IFRIC X Customer Loyalty Programmes. The Board approved the Interpretation for issue. However, it decided to postpone the effective date to allow more time for affected entities to undertake necessary systems changes. The Interpretation will be effective for annual periods beginning on or after 1 July 2008
Meeting Audio Playback:
19 June 2007
London UK
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IASB Meeting May 2007
The staff reported on the IFRIC’s meeting in May, details of which were published in IFRIC Update.
The IFRIC had reached consensus on the following documents:
- the Interpretations resulting from its consideration of comments received on D19 IAS 19 The Asset Ceiling: Availability of Economic Benefits and Minimum Funding and D20 Customer Loyalty Programmes;
- a draft Interpretation on IAS 18 Revenue – Sales of Real Estate; and
- a draft interpretation on IAS 21 The Effects of Changes in Foreign Exchange Rates – Hedging of a Net Investment in a Foreign Operation.
At its meeting in June, the Board will be asked to approve the Interpretations submitted to it by the IFRIC. The draft Interpretations will be presented to the Board for review in the next few weeks, and will be released for public comment unless four or more Board members object.
Meeting Audio Playback:
16 May 2007
London UK
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IASB Meeting March 2007
The staff reported on the IFRIC’s meeting in March, details of which are published in IFRIC Update. The IFRIC has made progress on its redeliberations on D19 IAS 19—The Asset Ceiling: Availability of Economic Benefits and Minimum Funding Requirements and D20 Customer Loyalty Programmes. The IFRIC expected to vote on both documents at its meeting in May and bring them to the Board for approval as Interpretations shortly thereafter.
The IFRIC continued its discussions on sales of real estate and hedging a net investment and will be considering texts for draft Interpretations on each at its meeting in May.
The IFRIC reached final or tentative decisions to pass to the Board four other issues for consideration as part of either the annual improvements process or other projects.
Meeting Audio Playback:
23 March 2007
London UK
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IASB Meeting January 2007
The staff reported on the IFRIC’s January meeting, details of which are published in IFRIC Update. One item related to the application of IAS 18 Revenue to initial fees charged by fund management groups and other entities. Despite agreement among IFRIC members on some IAS 18 principles to be applied to such fees, the IFRIC was unable to agree on the further principles that would be necessary for it to reach consensus on an Interpretation. The IFRIC has debated the issues for three consecutive meetings without prospect of a consensus. Therefore in accordance with the IFRIC Preface that indicates the IFRIC will consider only issues on which timely guidance can be given it decided to discontinue its work on this topic.
Meeting Audio Playback:
24 January 2007
London UK
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IASB Meeting November 2006
The staff reported on the November meeting of the IFRIC, details of which were available in IFRIC Update. With the improvement in staff resources during the current year, the IFRIC had cleared much of its backlog of work, although several pensions issues remained that would not be covered in phase I of the Board’s pensions project. One item from the backlog was resumption of work on aspects of IAS 41 Agriculture. The staff reassured the Board that any changes to IAS 41 would be co-ordinated with proposals in the Board’s Fair Value Measurements project.
Meeting Audio Playback
16 November 2006
London UK
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