The IFRS Foundation has published its annual report and audited financial statements for the year ended 31 December 2018:


The following is a summarised update of the main discussions and tentative decisions taken by the IASB at its meeting on 9, 10 and 11 April 2019.    

Business Combinations under Common Control (“BCUCC”)

The Board directed staff to continue to develop measurement approaches for transactions within the scope of the project, with attention being paid to what information is useful to the users of the financial statements and a cost-benefit analysis.

The Board decided that it need not pursue a single measurement approach for all transactions within the scope of the project, but proposed that the following 2 options could be specifically pursued:

  • a current value approach for all or some transactions that affect non-controlling shareholders in the receiving entity, and
  • a different approach, such as a form of predecessor approach, for transactions that affect lenders and other creditors in the receiving entity but do not affect non-controlling shareholders.

The Board will continue its discussion on measurement approaches for transactions within the scope of this project in future meetings.

Accounting Policies and Accounting Estimates (Amendments to IAS 8)

The Board discussed the staff’s analysis of feedback on the Exposure Draft Accounting Policies and Accounting Estimates but was not asked to make any decisions.

Disclosure Initiative – Accounting Policies

The Board tentatively decided to proceed with an exposure draft of proposed amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements.  The Board also decided to permit early application of the proposed amendments to the standards, and that they should be applied prospectively.

The Board plans to issue the exposure drafts in the second half of 2019

Primary Financial Statements

The Board tentatively decided:

  • to clarify that management performance measures (“MPM”) are subjected to the general requirement that information included in the financial statements must provide a faithful representation, 
  • to specify that an entity may only identify a measure as an MPM in its financial statements if it uses the same measure in its other public communications with users,
  • to place no additional constraints on how MPM should be calculated,
  • to issue no requirement for an entity to identify items of income or expense that meet the definition of unusual items that are excluded from the entity’s MPMs.

With regards to financial entities, the Board tentatively decided:

  • that income from cash and cash equivalents should be included in operating profit if the entity invests in financial assets in the course of its main business activities and they generate a return individually and largely independently of other entity resources,
  • to clarify and illustrate the types of entity the Board had in mind when developing the requirements that refer to ‘main business activities’ and that a separate reportable segment under IFRS 8 Operating Segments may be an indicator of a main business activity,
  • that expenses related to liabilities arising from investment contracts with participation features, in the scope of IFRS 9 Financial Instruments, should be included in operating profit,
  • to clarify that cashflows from associates and joint ventures not accounted for using the equity method should be classified in the same was as cashflows from other investments.

Dynamic Risk Management (DRM)

When discussing whether the DRM model should preclude an entity from designating specific types of strategies within the target profile, the Board tentatively decided:

  • the DRM model should not permit negative balances to be defined within the target profile,
  • when changes in risk management strategy are frequent, an entity should discontinue the DRM model prospectively,
  • the risk management strategy must be clearly documented within the time horizon specified.

When discussing how derivatives designated within the DRM model should be presented in financial statements, the Board also tentatively decided:

  • the model should not require presentation of the designated derivatives in a separate line item in the statements of financial position,
  • the model should not require changes in fair value of designated derivatives in the statement of other comprehensive income, but this information should be clearly communicated to users in the notes to the financial statements,
  • that the aligned portion of the designated derivatives should be presented as a separate line item on the face of the profit and loss, making clear it is related to interest revenue and expense.
  • that the misaligned portion should be communicated in the notes to the financial statements, specifying the line item in the profit and loss where it is presented making clear it is not related to interest revenue, interest expense, and the aligned portion.

Amendments to IFRS 17 Insurance Contracts

The Board tentatively decided:

  • the effective date of IFRS 17 should be for annual period beginning on or after 1 January 2022 with earlier application being permitted,
  • the fixed expiry date for the temporary exemption in IFRS 4 from applying IFRS 9 should be amended so that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2022,
  • some minor changes that would fall within the scope of Annual Improvements, to be addressed in the exposure draft of proposed amendments to IFRS 17.

The staff plan to seek permission from the Due Process Oversight Committee for a reduced comment period for the exposure draft of the proposed amendments to IFRS 17 and expect that it will be published at the end of June 2019.

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