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Issue 58 – IFRS News In Brief

IFRS INTERPRETATIONS COMMITTEE

LATEST DECISIONS SUMMARY

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 22 March 2016.

For more detailed and comprehensive information on the IC’s discussions: https://s3.amazonaws.com/ifrswebcontent/2016/IFRIC/March/IFRIC-Update-March-2016.html

  • IAS 16 should be amended to prohibit the deduction of proceeds from selling items produced before an item of PPE is capable of operating as intended by management (e.g. in the testing phase) from the cost of PPE.
  • IAS 12 should be amended to clarify that the recognition requirements in paragraph 52B apply to all payments on financial instruments classified as equity that are distributions of profits (i.e. dividends), in all circumstances.
  • A cash payment received from a government to help finance an entity’s research and development project that is either (i) repayable in cash if the entity decides to exploit and commercialise the results of the research phase of the project, or (ii) not repayable but the rights to the research must be transferred to the government if the entity decides not to exploit and commercialise the results of the research phase, would give rise to a financial liability for the entity.

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 15-16 March 2016. Other discussions of the Board covered the feedback received on the two Conceptual Framework exposure drafts, and on the recent Agenda Consultation, as well as the Definition of a Business project and the Goodwill and Impairment project.

For more detailed and comprehensive information on the Board’s discussions: http://media.ifrs.org/2016/IASB/March/IASB_Update_March_2016.html

Insurance Contracts (amendments to IFRS 4 due September 2016)

As proposed in the exposure draft Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts, entities would be able to qualify for either a ‘deferral approach’ (i.e. a temporary exemption from applying IFRS 9) or an ‘overlay approach’ (i.e. adjusting profit or loss (P/L) and other comprehensive income to remove from P/L the effect of newly measuring financial assets at fair value through P/L in accordance with IFRS 9), under the following conditions in particular:

  • Both approaches should be optional.
  • There should be a fixed expiry date for the temporary exemption.
  • The assessment of eligibility for the deferral approach should be performed only at the reporting entity level (i.e. not below), and the reporting entity should apply only one Standard (either IFRS 9 or IAS 39) to all of its financial instruments.

RSM INTERNATIONAL COMMENT LETTERS

On 15 March 2016, RSM International submitted a letter of comment to the IASB on ED/2015/9 Transfers of Investment Property (Proposed amendment to IAS 40). View here.

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