Issue 72 – IFRS News In Brief


Release of IFRIC Interpretation 23 Uncertainty over Income Tax Treatments

On 7 June 2017, the IASB provided guidance to specify how to reflect the effects of uncertainty in accounting for income taxes, as IAS 12 is currently silent on this issue. The Interpretation is effective for annual periods beginning on or after 1 January 2019 (earlier application permitted).

For more information:

Proposed narrow-scope amendments to IAS 16 open for comment until 19 October 2017

On 20 June 2017, the IASB published an exposure draft aimed at prohibiting the deduction of sales proceeds from the cost of an item of property, plant and equipment while that asset is being made available for use, thus requiring recognition of those sales proceeds and related costs in profit or loss.

For more information:

Draft guidance on the IFRS for SMEs open for comment until 1 September 2017

On 26 June 2017, the IFRS Foundation published a questions and answers (Q&A) document developed by the SME Implementation Group (SMEIG) aimed at addressing the accounting treatment for a financial guarantee issued by a parent company in that parent company's separate financial statements.

For more information:


The following is a summarised update on some of the main discussions or tentative decisions taken by the IC at its meeting on 13 June 2017.

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

  • When accounting for centrally cleared client derivative contracts, a clearing member should apply first the requirements for financial instruments. It is only when the transaction is not within the scope of IFRS 9 / IAS 39 and another Standard does not specifically apply that the clearing member applies the hierarchy in IAS 8 to determine an appropriate accounting policy.
  • The IC tentatively clarified how an entity accounts for the acquisition of a group of assets that does not constitute a business, specifically how to allocate the transaction price to the identifiable assets acquired and liabilities assumed when (i) the sum of the individual fair values of the identifiable assets and liabilities in the group differs from the transaction price, and (ii) the group includes identifiable assets and liabilities initially measured both at cost and at an amount other than cost.
  • When accounting for the acquisition of an interest in an associate or joint venture from an entity under common control, an entity should not apply by analogy the scope exception for business combinations under common control in IFRS 3 as IAS 28 does not include a scope exception for the acquisition of such an interest.
  • In determining which costs to include in assessing whether a contract is onerous, a reasonable reading of the requirements in IAS 37 relating to the unavoidable costs of fulfilling the contract could result in applying consistently one of two approaches: either the costs that an entity cannot avoid because it has the contract, or the costs that an entity would not incur if it did not have the contract.
  • In accordance with IAS 38, an entity should recognise any expenditure on goods acquired solely for promotional activities as an expense when it owns or has a right to access the goods, regardless of when it distributes the goods.


The following is a summarised update on the main tentative decisions taken by the IASB at its meeting on 21-22 June 2017. Additional discussions of the Board included the following projects: long-term interests in associates and joint ventures (due process to amend IAS 28), Primary Financial Statements, Rate-regulated Activities, and Dynamic Risk Management (education session).

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

Conceptual Framework (final due Q4/2017)

The description of the boundary of a reporting entity that is not a legal entity should emphasise that the information needs of users of financial statements play an important role in establishing such boundary.

Accounting policy changes resulting from agenda decisions (proposed amendments to IAS 8 due H1/2018)

The impracticability threshold regarding retrospective application of voluntary changes in accounting policies that result from agenda decisions published by the IFRS Interpretations Committee should be lowered and include a consideration of the benefits and costs of applying the change retrospectively. However, whether a change that results from an agenda decision is the correction of an error or a voluntary change in an accounting policy is not to be addressed.

Definition of a business (amendments to IFRS 3 due H1/2018)

Many proposals in the exposure draft Definition of a Business and Accounting for Previously Held Interests (‘the ED’) are to be confirmed, sometimes with additional clarification. In particular:

  • To be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together are required to contribute significantly to the ability to create outputs.
  • If an acquired set of assets generated revenues before the acquisition, but when integrated by the acquirer no longer generates revenues after the acquisition, that set of assets is regarded as creating outputs.
  • The definition of ‘output’ is to be amended by removing the reference to the ability to reduce costs, and clarifying that ‘other revenues’ means other income arising from contracts that are within the entity’s ordinary activities but are outside the scope of IFRS 15.
  • The guidance on substantive processes should specify that difficulties in replacing an acquired workforce may indicate that the workforce performs a substantive process.
  • The statement that a set of assets and activities in which goodwill is present is presumed to be a business should be removed from IFRS 3, and the ED’s proposed statement that the presence of more than an insignificant amount of goodwill may be an indicator that an acquired process is substantive should not be retained.


31 July 2017

ED/2017/2 - Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34)

1 September 2017

Draft SMEIG Q&A - IFRS for SMEs Standard - Accounting for financial guarantees in parent’s separate financial statements (Section 12 Other Financial Instrument Issues, Issue 1)

22 September 2017

Request for Information - Post-implementation Review — IFRS 13 Fair Value Measurement

2 October 2017

DP/2017/1 - Disclosure Initiative—Principles of Disclosure

19 October 2017

ED/2017/4 - Property, Plant and Equipment— Proceeds before Intended Use (Proposed amendments to IAS 16)




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