The International Accounting Standards Board issued a revised version of the Conceptual Framework for Financial Reporting on 29 March 2018. It sets out the fundamental concepts of financial reporting that underpin IFRS. It will replace the 2010 Conceptual Framework.

The main changes to the new Conceptual Framework compared with the 2010 version of the Conceptual Framework are:

  • a new chapter on measurement;
  • improved definitions of, and guidance on, assets, liabilities, equity, income and expenses; and
  • clarifications of important concepts such as stewardship, prudence and measurement uncertainty.

All these materials and further information are available on


The following is a summarised update on the main discussions taken by the IC at its meeting on 13 March 2018.

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

Items on the current agenda:

Costs considered in assessing whether a contract is onerous (IAS 37 Provisions, Contingent Liabilities and Contingent Assets)

In November 2017, the Committee decided to add the narrow-scope standard setting project to clarify the meaning of the term ‘unavoidable costs’ in IAS 37. In this meeting, the Committee decided to make the following recommendations to the Board:

  • propose to specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’;
  • provide examples of costs that do and do not relate directly to a contract to provide goods or services; and
  • develop its proposals as a narrow-scope amendment to IAS 37, rather than as an Interpretation of IAS 37 or as part of the annual improvements process.

Payments relating to taxes other than income tax (IAS 37 Provisions, Contingent Liabilities and Contingent Assets)

The Committee discussed a request about how to account for payments relating to uncertain tax treatments that are outside the scope of IAS 12 Income Taxes. It was described in the request that the entity made a payment which is in dispute with a tax authority and the entity determines that it probably does not have an obligation for the amount.

The Committee observed that the payment made by the entity is:

  • an asset as defined in the Conceptual Framework for Financial Reporting because it creates a resource controlled by the entity as a result of a past event and from which future economic benefits are expected; and
  • not a contingent asset as defined in IAS 37 because it is not a possible asset.

Therefore, the entity recognises an asset when the payment was made to the tax authority.

The Committee also observed that the asset recognised may not be clearly captured within the scope of any IFRS. As such, an entity applies paragraphs 10 and 11 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors in developing and applying an accounting policy for the measurement of the asset.

Bearing in mind that the Board expects to publish the new Conceptual Framework for Financial Reporting around the end of the first quarter of 2018, the Committee will update its analysis to reflect any effect of the new Conceptual Framework for Financial Reporting at a future meeting.

Committee’s tentative agenda decisions

The Committee discussed the following three matters and tentatively decided not to add them to its standard-setting agenda. The Committee encourages interested parties to submit their response on the Open for comment page ( by 22 May 2018.

  • Classification of a particular type of dual currency bond (IFRS 9 Financial Instruments)
  • Hedge accounting with load following swaps (IFRS 9 Financial Instruments and IAS 39 Financial Instruments—Recognition and Measurement)
  • Classification of short-term loans and credit facilities (IAS 7 Statement of Cash Flows)

Committee’s agenda decisions

The committee decided not to add the following matters to its standard-setting agenda.

  • IFRS 9 Financial Instruments and IAS 1 Presentation of Financial Statements
    • Presentation of interest revenue for particular financial instruments
  • IFRS 15 Revenue from Contracts with Customers
    • Revenue recognition in a real estate contract
    • Revenue recognition in a real estate contract that includes the transfer of land
    • Right to payment for performance completed to date


The following is a summarised update of the main discussion and tentative decisions taken by the IASB at its meeting on 21-22 March 2018.

For more details and comprehensive information on the IASB’s discussion see:

Disclosure Initiative - Principles of Disclosure

The Board was provided with the summary of the comment letters and outreach feedback on the Disclosure Initiative - Principles of Disclosure Discussion Paper (the comment period ended in October 2017), and discussed prioritisation of the topics considered in this project and next steps.

Prioritisation of the topics:

  • The Board tentatively decided:
    • to consider the following topics which are more relevant to the Primary Financial Statement project: a) roles of the primary financial statements and the notes, b) presentation of EBIT and EBITDA, c) presentation of unusual or infrequently occurring items, and d) fair presentation of performance measures.
    • it would consider whether to perform any further activities related to materiality when the Board has more information about the practical effects of recent Board publications including Practice Statement 2: Making Materiality Judgements and Better Communication in Financial Reporting: Making disclosures more meaningful; and made progress on the separate Disclosure Initiative—Definition of Material (Amendments to IAS 1 and IAS 8) project.
  • The Board tentatively decided not to pursue any further the following topics: a) guidance on the use of information in the financial statements; b) guidance on the location of accounting policy disclosures; c) relocating of disclosure objectives and requirements in IFRS, and d) clarifying the use of ‘present’ and ‘disclose’ in IFRS as separate activity.
  • The Board decided that the staff should perform further analysis on:
    • location of information that is necessary to comply with IFRS outside, and inclusion of non-IFRS information inside, the financial statements;
    • which accounting policies to disclose;
    • the relationship between the Board’s Better Communication projects;
    • whether and how to consider the effect of technology and digital reporting within the scope of this project.

The Board will discuss these topics at a future meeting.

Next Steps:

The Board decided to perform a targeted Standards-level review of disclosure requirements.

The Board tentatively decided to develop guidance for the Board itself to use when developing and drafting disclosure requirements, and obtain formal stakeholder feedback when the guidance is subsequently used as part of standard -setting. The Board also tentatively decided to test the guidance developed by applying it to one or two selected standards. The objective will be to improve the usefulness of disclosures provided to the primary users of financial statements, and not to change the volume of disclosure requirements. However, this may be a consequence. Finally, the Board tentatively decided to prepare an Exposure Draft of amendments to the disclosure requirements which would give stakeholders the opportunity to comment on the guidance.

Dynamic Risk Management

The Board discussed the target profile; one of the core areas of the dynamic risk management accounting model. No decision was made; however, the Board tentatively decided that staff should continue developing the model and update the Board in a future meeting.

Rate-regulated Activities

The Board discussed the possible accounting model being developed for activities subjected to ‘defined rate regulation’. The Board’s discussion focused on the scope of the recognition and measurement model, and the criteria for the recognition of regulatory assets and regulatory liabilities in the financial statements.

The Board tentatively decided that the accounting model should:

  • apply defined rate regulation established through a formal regulatory framework that is binding on both the entity and the regulator;
  • establish a basis for the rate specified goods and services that includes a rate-adjustment mechanism;  
  • require the recognition of regulatory assets or regulatory liabilities if it is more likely than not that they exist; and
  • not set thresholds that would prevent recognition of a regulatory asset or regulatory liability for which there is low probability of an inflow or outflow of economic benefits or high measurement uncertainly.

The next steps are that the Board will discuss proposals for the measurement aspect of the model and will decide whether to develop proposals for an Exposure Draft or a higher level overview of the model for consultation through a Discussion Paper.

Proposed amendments to IAS 8 Accounting Policies and Accounting Estimates

The Board was provided a summary of comments on the Exposure Draft Accounting Policies and Accounting Estimates (. However, the Board was not asked to make any decisions and will discuss its approach to the project at a future meeting.

Improvements to IFRS 8 Operating Segments

The Board discussed how to proceed with the Exposure Draft Improvements to IFRS 8 (Proposed amendments to IFRS 8 and IAS 34). The four proposed amendments are:

  • to the definition and disclosure requirements of the chief operating decision maker (CODM);
  • to link reportable segments with other parts of the annual reporting package;
  • to the aggregation criteria for segments; and
  • for additional disclosures, reconciling items and interim financial statements.

The Board initially supported the following proposals:

  • to require disclosure of the title and description of the CODM role;
  • to assess whether to narrow the scope of the proposal that an entity link its IFRS 8 reportable segments with other parts of the annual reporting package;
  • to clarify the level of details required for the reconciling items in reconciliations of segment disclosure to financial statements; and
  • to require that all interim periods of the current and prior financial years be restated and presented in the first interim report after a change in reportable segments.

However, the Board decided not to amend IFRS 8 as, when taken in aggregate, the Board believed that the proposals would not result in sufficient improvements in information to investors to justify the costs that stakeholders would incur.

Post-implementation review of IFRS 13 Fair Value Measurement

The Board concluded IFRS 13 is working as intended based on the feedback received from the Post-implementation Review of IFRS 13 (PIR). The Board decided to perform the follow-up work listed below:

  • Feed the PIR findings regarding the usefulness of disclosure into the work on Better Communication in Financial Reporting.
  • Continue liaison with the valuation profession, monitoring new developments in practice and promoting knowledge development and sharing.
  • Conduct no other follow-up activities as a result of findings from the PIR.

Management Commentary

The Board was provided with an update on the project to update IFRS Practice Statement 1 Management Commentary. The Board was not asked to make any decisions.


27 July 2018ED/2018/1 - Accounting Policy Changes (Proposed amendments to IAS 8)
22 May 2018Tentative agenda decision—Classification of short-term loans and credit facilities (IAS 7)
22 May 2018Tentative agenda decision—Classification of a particular type of dual currency bond (IFRS 9)
22 May 2018Tentative agenda decision—Hedge accounting with load following swaps (IFRS 9)