The following is a summarised update on the main discussions taken by the Committee at its meeting on 12 June 2018.

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

Items on the current agenda:

  • The Committee decided to recommend that the Board should propose a narrow-scope amendment to IAS 12 Income Taxes that the initial recognition exemption in paragraph 15 and 24 of IAS 12 does not apply to transactions that give rise to both deductible and taxable temporary differences to the extent that an entity would otherwise recognize a deferred tax asset and deferred tax liability of the same amount in respect of those temporary differences.
  • In November 2017, the Committee decided to add a narrow-scope amendment to IAS 37 Provisions, Contingent Liabilities and Contingent Assets to clarify the meaning of “unavoidable costs” in the definition of onerous contract.  IFRIC decided to bring the Committee’s following recommendations to the Board:
    • No additional disclosure requirements;
    • Entities already using IFRS apply a ‘modified retrospective’ approach, i.e., entities would apply the proposed amendments to contracts existing at the date of initial applications; and
    • No specific transition requirements for first-time adaptors.

Committee’s tentative agenda decisions:     

The Committee tentatively decided not to add the following to its standard-setting agenda because the Committee concluded that the principles and requirements in IFRS provides an adequate basis for the following matters. The Committee encourages interested parties to submit their responses on the open for comment page ( by 21 August 2018.

  • Determination of the Exchange Rate When There is a Long-term Lack of Exchangeability (IAS 21 The Effects of Changes in the Exchange Rate).
  • Expenditures on a Qualifying Asset (IAS 23 Borrowing Costs)
  • Borrowing Costs on Land (IAS 23 Borrowing Costs)

Committee’s agenda decisions:    

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

  • Classification of short-term loans and credit facilities (IAS 7 Statement of Cash Flows)



The following is a summarised update of the main discussions and tentative decisions taken by the IASB at its meeting on 20-21 June 2018.  

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

Disclosure Initiative – Principles of Disclosure, Targeted Standards-level Review of Disclosures and Definition of Material

The Board tentatively decided to:

  • Assign a member of the IFRS Taxonomy team in an advisory capacity to each of the IASB’s active projects when developing disclosure objectives and requirements in future.
  • Adopt a five-step approach to developing and drafting disclosure objectives and requirements.
  • Retain the proposal to include the concept of ‘obscuring information’ in the bold definition of material, and replace the proposed wording explaining ‘obscuring information’ in the explanatory paragraphs with a clearer description and examples.
  • Align terminology in the definition of material with terminology in the Conceptual Framework for Financial Reporting, and replace the term ‘could influence’ with ‘could reasonably be expected to influence’ in the definition of material.
  • Replace the definition of material in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors with a reference to the definition of material and explanatory paragraphs in IAS 1 Presentation of Financial Statements.
  • The effective date of amendments to be for annual periods beginning on or after 1 January 2020 with early application permitted.
  • Take no further action in response to the feedback about the use of the terms ‘Immaterial’ and ‘not material’, the different uses of the term ‘material’ in IFRS; and incorporating any of the Materiality Practice Statement into IAS 1 or the Conceptual Framework.

Derivatives used for Dynamic Risk Management (DRM) Purposes

The Board tentatively decided the DRM model should:

  • permit the use of interest rate swaps including basis swaps and forward starting swaps, in addition to forward rate agreements;
  • require formal designation and documentation of derivatives; and
  • require all designated derivatives to have a counterparty external to the reporting entity.

Financial Performance in the context of the DRM accounting model

The Board tentatively decided that:

  • alignment is achieved when the asset profile, in conjunction with the designated derivatives, equals the target profile;
  • reclassification should occur over the time horizon of the target profile such that, in conjunction with the asset profile, the results reported in the statement of profit or loss reflect the entity’s target profile;
  • entities must demonstrate the existence of a continuing economic relationship to apply the DRM accounting model; and
  • if an entity chooses to discontinue the DRM accounting model and, at the date of termination, the cash flows from the designated assets and liabilities still exist and future transactions are still expected to occur, the amount deferred in Other Comprehensive income should be reclassified over the life of the target profile such that the results reported reflect the target profile.

Interbank Offered Rate (IBOR)

The Board decided to add a research project on IBOR reform and its effects on financial reporting to its active research agenda.

Insurance Contacts

  • As part of its next Annual Improvements to IFRS Standards Cycle, the Board tentatively decided to:
    • amend the terminology in paragraph 27 of IFRS 17 to include insurance acquisition cash flows relating to insurance contracts in the group yet to be issued;
    • amend the terminology in paragraph 28 of IFRS 17 to achieve the intended timing of recognition of contracts within a group;
    • remove requirements that could result in double-counting of the risk-adjustment for nonfinancial risk in the insurance contracts reconciliation disclosures and revenue analyses;
    • correct the terminology in the sensitivity analysis disclosures;
    • exclude business combinations under common control from the scope of the requirements for business combinations in IFRS 17;
    • amend IFRS 3 so that the consequential amendment made by IFRS 17 on the classification of insurance contracts applies prospectively;
    • amend IFRS 7 and IFRS 9 and IAS 32 to achieve the intended interaction between the scopes of these financial instruments standards and the scope of IFRS 17, particularly with respect to insurance contracts held; and
    • add an explanation that in Example 9 of the Illustrative Examples on IFRS 17 the time value of the guarantee changes over time.
  • The Board tentatively decided to propose an amendment to the definition of the coverage period for insurance contracts with direct participation features.



27 July 2018

ED/2018/1 - Accounting Policy Changes (Proposed amendments to IAS 8)