The following is a summarised update on the main tentative decisions taken by the IASB at its meeting on 18-19 July 2017.

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

Income tax consequences of payments on financial instruments classified as equity (amendments to IAS 12 due Q4/2017)

The proposed amendments (in exposure draft Annual Improvements to IFRS Standards 2015–2017 Cycle[1]) to clarify that all income tax consequences of dividend payments should be accounted for in the same way (ie the requirements in IAS 12.52B apply to all income tax consequences of dividends, and not only to the circumstances described in IAS 12.52A) should be finalised with no substantive changes, except for the proposed retrospective application to be replaced with a requirement of prospective application of the amendments to dividends recognised on or after the beginning of the earliest period presented.

Borrowing costs eligible for capitalisation (amendments to IAS 23 due Q4/2017)

The proposed amendments (in exposure draft Annual Improvements to IFRS Standards 2015–2017 Cycle[1]) to clarify that any outstanding borrowing made specifically to obtain a qualifying asset that is ready for its intended use or sale should be treated as part of the entity’s general borrowings are to be finalised with no substantive changes. In addition, it should be clarified that an entity’s general borrowings also include funds borrowed specifically to obtain a non-qualifying asset.

Prepayment features with negative compensation (amendments to IFRS 9 due October 2017)

While the exposure draft[2] proposed two conditions to be met for particular financial assets with prepayment features that may result in negative compensation to be eligible to be measured at amortised cost or at fair value through other comprehensive income, only the first eligibility criterion should be retained. Thus, the fair value of the prepayment feature should not have to be assessed at initial recognition. The amendments should become effective for annual periods beginning on or after 1 January 2019 (earlier application permitted), and should be applied retrospectively using IFRS 9’s transition provisions with particular transition disclosures and no restatement of prior periods.

Materiality Practice Statement (final due September 2017)

While guidance (as proposed in exposure draft IFRS Practice Statement: Application of Materiality to Financial Statements[3]) about how to assess the materiality of information related to covenants is to be retained, guidance about the impact of covenants on materiality judgements about other information should be removed. In addition, it is to be clarified that information about a covenant is not material if the likelihood of breaching it is remote.


1 September 2017Draft 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 2017Request for Information - Post-implementation Review — IFRS 13 Fair Value Measurement
2 October 2017DP/2017/1 - Disclosure Initiative—Principles of Disclosure
19 October 2017ED/2017/4 - Property, Plant and Equipment— Proceeds before Intended Use (Proposed amendments to IAS 16)



On 27 July 2017, RSM International submitted a letter of comment to the IASB on ED/2017/2 Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34) .

As the IASB and IFRS IC will next meet in September  and there is no significant activity expected in August,our next IFRS News in Brief will be issued beginning of October 2017.