INTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB) LATEST DECISIONS SUMMARY
The following is a summarised update on the main provisional decisions taken by the IASB at its meeting on 16-17 February 2016. Other discussions of the Board covered the Goodwill and Impairment project (in response to some of the findings from the Post-implementation Review of IFRS 3), and its research project on Financial Instruments with Characteristics of Equity (three approaches are being explored as potential ways of improving IAS 32).
For more detailed and comprehensive information on the Board’s discussions: http://media.ifrs.org/2016/IASB/February/IASB-February-Update_Monthly.html
Measurement of long-term interests that, in substance, form part of the net investment in an associate or a joint venture, but to which the equity method is not applied (interaction between IAS 28 and IFRS 9)
Such long term interests would be in the scope of IFRS 9, and consequently they would be recognised and measured by applying the requirements of IFRS 9, including for impairment. The carrying amount of those long-term interests (as determined under IFRS 9) would then form part of the net investment to which any losses of the associate / joint venture are allocated and that would be assessed for impairment in accordance with IAS 28.
Classification of Liabilities (amendments to IAS 1 due Q3/2016)
As proposed in the exposure draft, classification of a liability as either current or non-current would be based on rights in existence at the end of the reporting date: a liability would be current unless the entity has the right to defer settlement for at least twelve months after reporting date. If the right to defer settlement for a period greater than twelve months is subject to conditions, the entity should assess whether it is in compliance with those conditions as at the reporting date, despite any requirement in the lending agreement to test such compliance at a date after the end of the reporting period. The proposed requirements would not be amended in respect of a periodic review clause: if the lender has the right to demand repayment, the entity has a right to defer settlement only up to the date of the periodic review.
UPCOMING COMMENT DEADLINES
18 March 2016
ED/2015/9 - Transfers of Investment Property (Proposed amendment to IAS 40)
RSM INTERNATIONAL COMMENT LETTERS
- On 15 February 2016, RSM International submitted a letter of comment to the IASB on ED/2015/10 Annual Improvements to IFRSs 2014–2016 Cycle http://www.ifrs.org/Current-Projects/IASB-Projects/Annual-Improvements/Exposure-Draft-November-2015/Pages/Comment-letters.aspx
- On 26 February 2016, RSM International submitted a letter of comment to the IASB on ED/2015/8 IFRS Practice Statement: Application of Materiality to Financial Statements http://www.ifrs.org/Current-Projects/IASB-Projects/Disclosure-Initiative/Materiality/Exposure-Draft-October-2015/Pages/Comment-letter.aspx