IASB Meetings

The following is a summarized update of key matters arising from the discussions and decisions taken by the IASB at its meetings on the following dates: 

  • 21-22 July 2026
  • 22-23 September 2026

The full updates, as published by the IASB, can be found at the IASB Updates archive here.

Research and standard setting

Equity Method (Agenda Paper 13)

In July and September 2026, the IASB continued redeliberating the proposals in the Exposure Draft Equity Method of Accounting—IAS 28 Investments in Associates and Joint Ventures (revised 202x).

Transactions with Associates – Disclosure Requirements

The IASB tentatively decided:

a.    to require an entity to disclose its accounting policy choice for the recognition of gains or losses from transactions with associates.

b.    to require:    

(I)    an investor that chooses to recognise gains or losses in full to disclose gains or losses from ‘downstream’ transactions; and

(II)    an investor that chooses to restrict the recognition of gains or losses to disclose gains or losses from both ‘downstream’ and ‘upstream’ transactions.

c.    to expand the disclosure objective in paragraph 20 of IFRS 12 Disclosure of Interests in Other Entities that investors use in determining the types of transactions with associates for which gains or losses would be disclosed.

d.    to require investors to disclose the nature of transactions with associates and whether those transactions are included in the disclosure of gains and losses.

e.    to provide an exemption from disclosing gains and losses from transactions with associates only if: 

(i)    the information disclosed can be attributed to an individual associate; and

(ii)    the transactions are part of the investor’s ordinary activities.

f.    not to proscribe whether an investor discloses the reconciliation between the opening balance and closing balance of restricted gains and losses separately from or combined with the reconciliation between the opening and closing balance of the carrying amounts of investments in associates.

g.    not to change its tentative decision to require disclosure of the reconciliation of restricted gains and losses and the information to be disclosed in that reconciliation.

Transition Requirements

The IASB tentatively decided:
a.    to confirm its proposal in the Exposure Draft to require an investor to retrospectively apply a change in the accounting policy for recognising gains or losses from transactions with associates, subject to (b)–(c).

b.    to provide relief from retrospective application for cases in which retrospective application would involve undue cost or effort.

c.    to clarify that the requirement in (a) applies only to the unrecognised portion of a previously restricted gain or loss at the transition date. 

d.    not to clarify that the retrospective application in (a) is subject to the ‘impracticability exemption’ in IAS 8 Basis of Preparation of Financial Statements.

The IASB also tentatively decided to add a transition requirement for an investor that has unrecognised losses at the transition date to recognise an adjustment to the opening balance of retained earnings at the transition date and a corresponding decrease in the carrying amount of the investment for the lower of:

a.    the amount of the unrecognised losses; or

b.    the amount of the increase to the carrying amount of the investment resulting from applying the transition requirements in paragraphs C4–C7 of Appendix C Effective date and transition of the Exposure Draft.

The IASB also tentatively decided to require an investor to apply the transition requirements for a change in the accounting policy for recognising gains or losses from transactions with associates to the related amendments in preparing its consolidated financial statements (IFRS 10 Consolidated Financial Statements) and separate financial statements (IAS 27 Separate Financial Statements).

Transition Requirements for First-time Adopters

The IASB tentatively decided:

a.    to clarify that the exemption in paragraph C5 of IFRS 1 First-time Adoption of International Financial Reporting Standards for past acquisitions of investments in associates also applies on purchase of an additional ownership interest while retaining significant influence; and

b.    not to include in IFRS 1 any other transition requirements for the amendments to IAS 28. 

Effective Date and Early Application

The IASB tentatively decided to require an investor to apply the revised IAS 28 for annual reporting periods beginning on or after 1 January 2029, with early application permitted, on the premise that the revised IAS 28 is issued in the first half of 2027. If an investor applies the revised IAS 28 before the effective date, the investor would be required to disclose that it has done so.

Statement of Cash Flows and Related Matters (Agenda Paper 20)

In July and September 2026, the IASB met to discuss: 

  • improvements to disclosures about non-cash transactions from investing and financing activities (non-cash transactions); 
  • planned work and areas of focus on the statement of cash flows for financial institutions:
  • potential requirements for classification of acquisition-related payments, in particular:
    • payments of pre-existing debt;
    • contingent and deferred consideration; and
    • transaction costs; and
  • potential disclosure requirements for information about specified changes in specific assets and liabilities.

Non-cash transactions

The IASB tentatively decided to propose in a future exposure draft:

a.    adding application guidance to clarify the non-cash transactions within the scope of paragraphs 43–44 of IAS 7 Statement of Cash Flows. Specifically, the guidance would:

(i)   explain that to identify non-cash transactions, an entity identifies non-cash additions and disposals of assets, and non-cash issuances and redemptions of liabilities and equity items, for which cash flows would be classified as investing or financing activities.

(ii)    include examples of non-cash changes in the items described in (i) that are within the scope of the disclosure requirements and examples that are outside that scope. 

b.    adding a disclosure objective that would require an entity to disclose information about non-cash transactions that enables investors to understand changes in the entity’s net assets and its ability to generate future cash flows.

c.    requiring an entity to disclose information about non-cash transactions in a single note.

d.    adding requirements to paragraphs 43–44 of IAS 7 for an entity to disclose:

(i)    a list of non-cash transactions and applicable cross-references that identify the location of any related information in other notes.

(ii)    the transaction amount—that is, the consideration attributed to the transaction in accordance with IFRS Accounting Standards. The entity would also be required to disclose information about the related investing, financing and operating activities from which the transaction arises. Operating activities would only be included in the scope of these proposed requirements if involved in a transaction that involves both operating and investing or financing.

(iii)    the effect of non-cash transactions on assets, liabilities and equity alongside the amounts of similar cash transactions. The entity would be required to add these amounts to show their combined effect on its activities in the statement of cash flows.

e.    requiring an entity to provide the information described in (d) in a structured format, like a table.

f.    requiring an entity to explain the nature of the information available in the related notes identified in cross-references disclosed as described in (d)(i) if the transaction amounts are not separately identifiable in those notes.

Approach to the Statement of Cash Flows for Financial Institutions 

The IASB discussed the plan for future work on the statement of cash flows for financial institutions. The plan includes prioritising research and stakeholder engagement on:

a.    defining the scope of entities that would apply any potential changes to IAS 7 arising from this work; and

b.    considering possible exemptions for financial institutions from some or all of the requirements for presenting a statement of cash flows.

Classification of Acquisition-related Payments

The IASB tentatively decided to propose amending the requirements in paragraph 39 of IAS 7 Statement of Cash Flows to state that ‘cash flows arising from obtaining or losing control’ include only payments of items included in ‘consideration transferred’ as described in paragraph 37 of IFRS 3 Business Combinations. As a result, in the statement of cash flows:

a.    payments of deferred and contingent consideration arising from a business combination would be classified as investing activities.

b.    payments of pre-existing debt of the acquiree in a business combination would be classified as financing activities.

c.    payments of transaction costs arising in a business combination would be classified as operating activities.

Specified Changes in Specific Assets and Liabilities

The IASB tentatively decided to propose: 

a.    introducing a disclosure objective in IAS 7 that requires an entity to disclose specified non-cash changes in assets and liabilities and that enables users of financial statements to better understand the relationship between:

(i)    amounts reported in an indirect method reconciliation for changes in assets and liabilities; and

(ii)    the same assets and liabilities presented in the statement of financial position.

b.    requiring an entity to satisfy the disclosure objective by disclosing—for each line item in the statement of financial position that includes assets and liabilities included in the indirect reconciliation—the amounts of non-cash changes from:

(i)    translating the results and financial position of foreign operations;

(ii)    obtaining or losing control of subsidiaries or other businesses; and

(iii)    reclassifying assets and liabilities in the statement of financial position.

c.    requiring an entity to provide the information in (b) in a table.

d.    not providing an exemption from the general requirement for an entity to disclose material information beyond that specified in (b).

Financial Instruments with the Characteristics of Equity (Agenda Paper 5)

In September 2026 the IASB met to continue deliberating on the proposed requirements in the Exposure Draft Financial Instruments with Characteristics of Equity.

Obligations to Purchase Own Equity Instruments – Debit Entry on Initial Recognition 

The IASB tentatively decided to proceed with the proposed requirements related to the debit entry on initial recognition of the financial liability, subject to some drafting improvements and targeted refinements. These refinements would clarify that:

a.    an entity assesses whether an obligation issued over non-controlling interest currently gives the entity access to the returns associated with an ownership interest in accordance with the requirements in IFRS 10 Consolidated Financial Statements; and

b.    an entity whose obligation over non-controlling interest does not currently give it access to the returns associated with an ownership interest:

(i)    deducts the debit amount from non-controlling interest on initial recognition but does not derecognise non-controlling interest; and

(ii)    presents the debit amount as a separate line item, deducted from a gross line item for non-controlling interest in the statement of financial position, unless separate presentation is unnecessary for that statement to provide a useful structured summary as described in IFRS 18.

Obligations to Purchase Own Equity Instruments – Other Matters

The IASB tentatively decided to proceed with the proposed requirements related to the expiry of written put options, subject to drafting improvements and a targeted refinement. The targeted refinement would clarify that on expiry of the put option on non-controlling interest, an entity recognises in profit or loss the difference between:

a.    the carrying amount of the financial liability; and

b.    the initial amount by which non-controlling interest was reduced.

Amortised Cost Measurement (Agenda Paper 11)

In September 2026 the IASB met to discuss:

  • the application of the 10% test to specific financial instruments;
  • the accounting for the effective interest rate of a modified financial instrument; and
  • the accounting for costs or fees on modification of a financial instrument.

Application of the 10% Test 

The IASB tentatively decided to clarify that an entity applying the 10% test to a financial asset or financial liability:

a.    considers all contractual terms of the financial instrument.

b.    determines the contractual cash flows of a financial instrument that includes an option or contingent term on the basis that the option is exercised—or that the contingent event occurs—at the earliest possible date specified in the contract. The probability or estimated timing of the option being exercised, or the contingent event occurring, has no effect on determining those cash flows.

The IASB also tentatively decided to clarify that an entity applying the 10% test to a financial asset or financial liability that is a revolving credit facility determines the facility’s contractual cash flows based on the contractual terms of the facility as a whole. In particular, the entity determines the contractual cash flows based on the maximum credit capacity over the remaining term of the facility, under the new and original contractual terms.

Accounting for the Effective Interest Rate of a Modified Financial Instrument

The IASB also tentatively decided to propose amending IFRS 9 to require that, when a modification of a financial instrument does not result in derecognition, an entity adjusts the effective interest rate to reflect a change in the contractual interest rate that provides consideration for the time value of money or for credit risk.

Accounting for Costs or Fees on Modification of a Financial Instrument

The IASB tentatively decided to clarify that:

a.    for the purposes of an entity applying paragraphs 5.4.3 and B3.3.6A of IFRS 9, the term ‘costs or fees incurred’ includes:  

(i)   all fees and points paid or received between parties to the contract that are directly attributable to the modification of the financial instrument, including fees paid or received by either the borrower or the lender on the other’s behalf; and

(ii)    transaction costs and all other premiums or discounts that are directly attributable to the modification of the financial instrument.

b.    if the modification of a financial asset or financial liability does not result in derecognition, an entity continues to recognise any unamortised costs or fees at the time of the modification as part of the gross carrying amount of the modified financial asset or the amortised cost of the modified financial liability. Those costs or fees are amortised over the remaining term of the modified financial instrument. 

Maintenance and consistent application

Presentation of Taxes or Other Charges that are not Tax Expense or Tax Income Applying IAS 12 Income Taxes (IFRS 18) (Agenda Papers 12A-12C)

In July 2026 the IASB met to discuss the project Presentation of Taxes or Other Charges that Are Not Tax Expense or Tax Income Applying IAS 12 Income Taxes (IFRS 18 Presentation and Disclosure in Financial Statements).

The IASB tentatively decided to propose amending IFRS 18:

a.    to require an entity to classify, in the income taxes category of the statement of profit or loss, tax charges imposed by a government as a direct substitute for income taxes; and

b.    to require the classification described in (a) only if legislation specifies that an entity pays either an income tax or a specified tax charge.

The IASB tentatively decided:

a.    to require an entity that classifies tax charges other than income taxes in the income taxes category:

(i)    to disaggregate, in the statement of profit or loss, those other tax charges from income taxes;

(ii)    to disclose the nature and amount of those other tax charges and the bases for their calculation; and

(iii)    to label the subtotal for profit before financing and income taxes (see paragraph 69 of IFRS 18) or the subtotal for profit before income taxes (see paragraph 118 of IFRS 18) in a way that would faithfully represent the amounts included in the subtotals (in accordance with paragraph 43 of IFRS 18);

b.    with respect to management-defined performance measures:

(i)    to require an entity to disclose the effect of other tax charges classified in the income taxes category for each item disclosed in the reconciliation required by paragraph 123(c) of IFRS 18; and

(ii)    to allow an entity to use any reasonable method to determine the effect of the other tax charges for the reconciling items (similar to requirements in paragraph B141 of IFRS 18); and

c.    to amend paragraphs B63–B64 of IFRS 18 to also refer to assets arising from tax charges other than income taxes that an entity classifies in the income taxes category

The IASB tentatively decided not to amend the requirements in IFRS 18 relating to income tax recognised in other comprehensive income. 

The IASB tentatively decided 

a.    to require an entity to apply the proposed amendments retrospectively in accordance with IAS 8 Basis of Preparation of Financial Statements; and

b.    to provide no exemption or exception from retrospective application of the proposed amendments for first-time adopters.

IFRS Interpretations Committee (IFRIC) Latest decisions summary

The following is a summary of key matters arising from the discussions and decisions taken by the IFRIC at its meeting on 15-16 September 2026. The June IFRIC Update is available on the IFRS Foundation website here. All tentative agenda decisions are open for comment until 30 November 2026.

Committee’s tentative agenda decisions

Assets that Generate a Return Individually and Largely Independently of an Entity’s Other Resources (IFRS 18 Presentation and Disclosure in Financial Statements)—Agenda Paper 2 

The Committee received a request asking how an investment fund entity assesses whether financial assets it holds (such as debt or equity investments) generate a return individually and largely independently of the entity’s other resources, as specified in paragraph 53(c) of IFRS 18.

Paragraph 53(c) of IFRS 18 states that ‘except as required by paragraphs 55–58 [of IFRS 18] for an entity that has a specified main business activity, an entity shall classify in the investing category [of the statement of profit or loss] income and expenses … from … (c) other assets if they generate a return individually and largely independently of the entity’s other resources’.

Paragraph B46 of IFRS 18 states that assets that generate a return individually and largely independently of the entity’s other resources in paragraph 53(c) typically include:

a.    debt or equity investments; and

b.    investment properties, and receivables for rent generated by those properties.

Paragraph B48 of IFRS 18 states that assets that an entity uses in combination to produce or supply goods or services do not generate a return individually and largely independently of the entity’s other resources, and such assets typically include:

a.    property, plant and equipment;

b.    assets that arise from the production or supply of goods and services for which the income and expenses are classified in the operating category (for example, receivables for such goods and services); and

c.    if the entity provides financing to customers as a main business activity, any loans to a customer.

In applying paragraph 53(c) of IFRS 18 and the related application guidance in paragraphs B45–B49 of IFRS 18:

a.    an entity would typically conclude that the debt and equity investments it holds generate a return individually and largely independently of its other resources. For example, an investment fund that holds debt or equity investments would typically conclude that those investments generate such a return.

b.    an entity that holds debt instruments arising from the production or supply of goods or services to a customer, however, would typically conclude that those instruments do not generate a return individually and largely independently of the entity’s other resources.

The Committee concluded that the principles and requirements in IFRS 18 provide an adequate basis for an entity to assess, in the context of paragraph 53(c), whether an asset it holds generates a return individually and largely independently of its other resources. Consequently, the Committee decided that a standard-setting project is not needed to address the request.

Estimating Residual Value (IAS 16 Property, Plant and Equipment) – Agenda Paper 4

The Committee received a request asking whether an entity’s estimate of residual value reflects expected future developments other than the expected age and condition of the item at the end of its useful life (other expected future developments).

In the fact pattern described in the request:

a.    an entity manufactures cars and leases them to its customers. The lease term is usually three years, which is significantly shorter than the cars’ economic lives. The entity sells the leased cars at the end of the lease term.

b.    the entity classifies the lease contracts as operating leases and recognises the leased cars as property, plant and equipment. The entity measures the leased cars using the cost model in IAS 16 and depreciates them on a straight-line basis over the lease term.

The request asks whether the entity is required to reflect other expected future developments in its estimate of the leased cars’ residual value.

Paragraph 6 of IAS 16 defines the residual value of an asset as ‘the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.’

The Committee observed that the definition of residual value requires an entity to estimate the amount it would currently obtain—that is, the amount the entity would obtain at the reporting date—from disposing of the asset if it were already of the age and in the condition expected at the end of its useful life. In doing so, an entity:

a.    reflects other expected future developments to the extent such developments affect the amount the entity would currently obtain from disposing of the asset (that is, to the extent those developments affect current prices). For example, expected future technological changes that might make an asset obsolete could affect the amount an entity would currently obtain for the asset.

b.    does not reflect other expected future developments to the extent they would affect the amount the entity will obtain for the asset only in the future (that is, to the extent they affect only future prices). For example, inflation between the reporting date and the end of an asset’s useful life might affect the amount an entity expects to obtain for the asset only in the future.

The Committee concluded that the principles and requirements in IAS 16 provide an adequate basis for an entity to determine whether it is required to reflect other expected future developments in estimating the residual value of an item of property, plant and equipment. Consequently, the Committee decided that a standard-setting project is not needed to address the request.

Sale of Equity Investments Measured at Fair Value Through Other Comprehensive Income (IFRS 10 Consolidated Financial Statements)—Agenda Paper 5

The Committee received a request about how an entity accounts for a difference between the fair value of an investment in an equity instrument and the consideration received upon the sale of that instrument when the entity has elected to measure the investment at fair value through other comprehensive income in accordance with IFRS 9.

In the fact pattern described in the request an entity has elected to measure an investment in an equity instrument at fair value through other comprehensive income in accordance with paragraph 5.7.5 of IFRS 9. The entity subsequently sells that investment and the consideration the entity receives for the investment differs from the fair value of that investment at the disposal date.

The request asks whether the entity accounts for a difference between the fair value of the investment at the disposal date and the consideration the entity receives upon the disposal of that investment in profit or loss or in other comprehensive income.

Evidence and feedback gathered by the Committee indicates little diversity in practice an applying IFRS 9 to the fact pattern and suggests that entities, for an investment in an equity instrument they have elected to measure at fair value through other comprehensive income, generally recognise a difference between the fair value of that investment at the disposal date and the consideration received upon the disposal of that investment in other comprehensive income.

Based on its findings, the Committee concluded that the matter described in the request does not have widespread effect. Consequently, the Committee decided that a standard-setting project is not needed to address the request.

QUERY OF THE MONTH 

Classification of an investment in shares with a contingent redemption option (IFRS 9)

Background

An entity invests in pre-IPO shares. The investment terms include an option for the holder to redeem the shares for cash if the issuer does not complete a qualifying IPO by a specified date. 

Question

Can the entity elect to measure its investment in the shares at FVOCI in accordance with IFRS 9?

Answer

The shares are not eligible for classification at FVOCI. The Basis of Conclusions to IFRS 9 clarifies that this option is only available for instruments that meet the definition of an equity instrument in IAS 32. 

IAS 32.25 addresses the classification of instruments with contingent settlement provisions by the issuer. Where the contingent settlement event is not within the control of the issuer, such as completion of a successful IPO, the issuer does not have an unconditional right to avoid delivering cash and the instrument is a financial liability of the issuer.  This classification is based solely on the terms of the contract – the likelihood of the IPO being completed successfully is not relevant to the classification.

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