Issue 54 – IFRS News In Brief


Proposed guidance on transfers of investment property open for comment until 18 March 2016

On 19 November 2015, the IASB published an exposure draft aimed at clarifying the existing guidance on transfers to, or from, investment properties in IAS 40.

For more information:

Annual Improvements to IFRSs 2014-2016 Cycle open for comment until 17 February 2016

On 19 November 2015, the IASB published an exposure draft covering narrow-scope amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 12 Disclosure of Interest in Other Entities, and IAS 28 Investments in Associates and Joint Ventures.

For more information:



The following is a summarised update on some of the main discussions or provisional decisions taken by the IFRS Interpretations Committee (IC) at its meeting on 10-11 November 2015.

For more detailed and comprehensive information on the IC’s discussions:   

Topics retained on the IC’s agenda with no decisions taken

  • Whether the measurement (including impairment) of long term interests that, in substance, form part of the ‘net investment’ in an associate or joint venture should be governed by IFRS 9 or IAS 28.
  • Whether tax consequences of payments on, and issuing costs of, financial instruments that are classified as equity should be recognised in profit or loss, or directly in equity (interaction between various requirements of IAS 12 unclear).
  • Payments made by an operator to a grantor in a service concession arrangement (IFRIC 12): mixed views on whether the issue is linked to the broader issue of variable payments for asset purchases, or is similar to the principles developed by the IASB for the accounting for variable payments in lease contracts.
  • Accounting for combined service concession and lease arrangements: the IC clarified that an arrangement in which there are no construction or upgrade services can fall within the scope of IFRIC 12.

Clarifications to topics not taken on the IC’s agenda

  • Under IFRS 9, the ‘lower of’ test (clearly required for cash flow hedges) should be applied when determining the effective portion of the gains or losses arising from the hedging instrument when accounting for net investment hedges.
  • Whether cash pooling arrangements meet IAS 32 requirements for offsetting - in particular for what constitutes an intention to settle on a net basis - would depend on the individual facts and circumstances, as there are many different variations of cash pooling arrangements.
  • Accounting for long-term supply contracts for inventories when the purchaser agrees to make significant prepayments to the supplier would require judgement to determine if the individual arrangement contains a financing component; such financing component should then be accounted for separately.



The following is a summarised update on the main provisional decisions taken by the IASB at its meeting on 18-19 November 2015. Other discussions of the Board included the unit of account for measuring fair value, and research projects on post-employment benefits, goodwill and impairment, and on share-based payments.

For more detailed and comprehensive information on the Board’s discussions:

Insurance Contracts (new IFRS due in 2016)

  • The variable fee approach would not be amended so that a financial guarantee embedded in an insurance contract would be treated as if it were part of the underlying assets (i.e. similar to the general model).
  • Remeasurement of the contractual service margin using current discount rates would not be allowed in the general model.
  • Investment properties, investments in associates, owner occupied property, own debt and own shares that are underlying items held for a contract with direct participation features could be measured at fair value through profit or loss.
  • A simplified retrospective approach could be applied to determine the contractual service margin on transition for contracts measured using the variable fee approach
  • The option to recognise changes in the value of the guarantee embedded in the insurance contract with direct participation features in profit or loss (instead of in the contractual service margin) could be applied only prospectively from the date of initial application of the Standard.

Implementation Projects

The proposals in the November 2014 and August 2015 exposure drafts related to clarifications on classification and measurement of share-based payment transactions (amendments to IFRS 2) and deferral of the effective date of Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (September 2014 amendment to IFRS 10 and IAS 28) respectively will be finalised shortly.



31 December 2015

Request for Views - 2015 Agenda Consultation

19 January 2016

DI/2015/1 - Uncertainty over Income Tax Treatments

19 January 2016

DI/2015/2 - Foreign Currency Transactions and Advance Consideration

17 February 2016

ED/2015/10 - Annual Improvements to IFRSs 2014–2016 Cycle

26 February 2016

ED/2015/8 - IFRS Practice Statement: Application of Materiality to Financial Statements

18 March 2016

ED/2015/9 - Transfers of Investment Property (Proposed amendment to IAS 40)



  • On 9 November 2015, RSM International submitted two letters of comments to the IASB respectively on:

ED/2015/3 Conceptual Framework for Financial Reporting

ED/2015/4 Updating References to the Conceptual Framework (Proposed amendments to IFRS 2, IFRS 3, IFRS 4, IFRS 6, IAS 1, IAS 8, IAS 34, SIC-27 and SIC-32)

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