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  • IFRS 5 — Non-current assets held for sale and discontinued operations
    consensus on its inclusion could not be reached Furthermore two respondents questioned whether this issue should be addressed separately from the other issues addressed as Issue 3 Staff recommendation Staff recommend that the agenda decision be finalised subject to minor editorial changes Committee discussion and decision The vast majority agreed with the staff recommendation Issue 2 see Agenda Paper 7B Background Similarly to Issue 1 the Committee decided not to add this issue to its agenda as it considered that sufficient guidance already exists within IFRS 5 and IFRS 10 However diversity in practice exists relating to the presentation of intragroup transactions between continuing and discontinued operations Three primary views exit View 1 eliminate intragroup transactions without any adjustments View 2 eliminate intragroup transactions but make adjustments to illustrate the impact on continuing operations going forward and View 3 do not eliminate intragroup transactions The Committee s tentative conclusion was consistent with View 1 Comment letter analysis A few respondents were concerned that the tentative decision was worded in a way that would not permit presentation other than in accordance with View 1 and in effect created a presentation rule Furthermore many respondents felt that the wording of the existing tentative agenda decision would lead to presentation not consistent with the objective of IFRS 5 Staff recommendation The staff recommends that the agenda decision not be finalised Instead the issue should be transferred to the agenda decision relating to other issues see Issue 3 Committee discussion and decision The discussion centred on whether the issue should be left to the IASB to consider or whether the Committee could provide some assistance relating to the issue raised immediately Ultimately a decision was taken supported by a majority to issue an agenda decision that would remove View 3 as an alternative but to pass the issue of whether View 1 or View 2 was the correct approach to the IASB In other words this would be considered as part of the other issues discussed in Issue 3 below Issue 3 see Agenda Paper 7C Background As a result of many issues being raised relating to the implementation of IFRS 5 the Committee decided to take these issues to the IASB The IASB decided to divide these issues into those to be considered in the short term and those to be discussed in the medium to long term The Committee decided to publish a tentative agenda decision relating to the medium to long term issues acknowledging that these would not be discussed by the Committee in the short term unless a request was received by the IASB to do so Comment letter analysis Respondents agreed that these issues should not be discussed in the short term but believe that the number of unresolved issues indicates a need for standard setting activity In addition respondents believe that Issue 2 above should be incorporated into this agenda decision Staff recommendation Staff recommend that the agenda decision be finalised subject to some changes to the wording

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2016/january/ifrs-5 (2016-02-10)
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  • IAS 12 — Recognition of deferred taxes
    different from an entity s functional currency The Committee decided not to add the issue to its agenda and issued a tentative agenda decision for comment Comment letter analysis The primary concern raised by respondents from South and Central America is significant volatility in effective tax rates and the distortive effects they have on financial statements They raised the requirement of US GAAP which prohibits deferred tax resulting from exchange rate fluctuations on the tax base of a non current asset or liability and suggested that such a requirement be introduced by the IASB Staff recommendation After conducting additional work based on responses received the staff recommend that the Committee that the tentative agenda decision be finalised as originally worded Committee discussion and decision The Staff brought a fourth response received after the papers were posted to the Committee s attention This respondent felt that the issue was too broad for the Committee to address and should instead be added to the IASB s agenda The vast majority agreed with the staff recommendation stating that IAS 12 is clear on this point The three members who did not agree felt that the IASB should explore an exception similar to that provided in US GAAP Related Topics Standards IAS 12 Income Taxes Related news We comment on two IFRIC draft Interpretations 19 Jan 2016 IASB finalises amendments regarding the recognition of deferred tax assets for unrealised losses 19 Jan 2016 EFRAG draft comment letter on DI 2015 1 17 Nov 2015 IFRS Interpretations Committee publishes draft interpretation on accounting for uncertainties in income taxes 21 Oct 2015 Summary of the CMAC February 2015 meeting 09 Apr 2015 We comment on a number of tentative agenda decisions of the IFRS Interpretations Committee 20 Jan 2015 All Related Related Publications IFRS in Focus

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2016/january/ias-12 (2016-02-10)
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  • IFRIC 12 — Payments made by an operator to a grantor in a service concession arrangement
    concession arrangement Date recorded 12 Jan 2016 Background A request was received relating to the accounting for variable contractual payments made by an operator under a service concession agreement within the scope of IFRIC 12 The issue was discussed in numerous Committee meetings and they noted that the variability of these payments was part of the broader issue of accounting for variable payments for asset purchases In their November 2015 meeting the Committee decided that developing accounting for variable payments for asset purchases was too broad an issue for it to address and issued a related tentative agenda decision The Committee then considered whether a solution could be reached relating to the accounting for payments made by an operator to a grantor without addressing the variable payments for asset purchases issue They decided that this issue too was too broad and requested the staff to prepare a tentative agenda decision Staff recommendation The staff have drafted a tentative agenda decision and recommend that this be approved by the Committee Committee discussion and decision A few members raised concerns regarding the wording of the tentative agenda decision in particular the paragraph discussing the link to the accounting for variable payments for asset purchases and whether sufficient explanation had been provided for the conclusions reached Despite this there was general support for the Agenda Decision The Chair based on the concerns raised about the wording provided requested assistance to be provided to the Staff by some Committee members in order to address the drafting concerns raised Related Topics Standards IFRIC 12 Service Concession Arrangements Related news IASB publishes editorial corrections 19 Sep 2014 FASB issues guidance on service concession arrangements 24 Jan 2014 ESMA publishes more enforcement decisions 04 Apr 2013 Notes from the November IFRS Interpretations Committee meeting 07 Nov 2011

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2016/january/ifric-12 (2016-02-10)
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  • IFRS Interpretations Committee meetings (2016)
    United Kingdom English United States English Toggle navigation Search site Toggle navigation Home News Publications Meetings Standards Projects Jurisdictions Resources My IAS Plus Topics Communications Toggle navigation Search site Navigation Deloitte meeting notes International Accounting Standards Board IFRS Interpretations Committee 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Items not added to the agenda IFRS Foundation Trustees Advisory bodies Info IFRS Interpretations Committee meetings 2016 Below you will find links to Deloitte observer notes for meetings of the IFRS Interpretations Committee during 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Related Meetings IFRS Interpretations Committee meeting 12 January 2016 The IFRS Interpretations Committee met at the IASB s offices in London on 12 January 2016 The Interpretations Committee continued its discussions on IFRIC 12 Payments made by an operator to a grantor in a service concession arrangement The Interpretations Committee also finalised six agenda decisions 12 Jan 2016 12 Jan 2016 Quick links About meeting notes IFRS Interpretations Committee Upcoming meetings February 2016 IASB meeting February 2016 IFRS Advisory Council meeting March 2016 IASB meeting education session March 2016 IASB meeting March 2016 IFRS Interpretations Committee meeting Contact us About Legal Privacy FAQs Material on

    Original URL path: http://www.iasplus.com/en/meeting-types/ifrs-ic/2016 (2016-02-10)
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  • IAS 39 — Financial instruments: recognition and measurement
    negative interest rates representing a fee for depositing money The outreach conducted by the staff had revealed that European regulators standard setters and accounting firms preferred View 2 Some argued that the market rate of interest referred to in IAS 39 AG33 b was an overall interest rate that included spreads above the benchmark interest rate Even if the benchmark rate was negative the overall interest rate including the spread would be positive and the zero per cent floor would be out of the money However some respondents preferred separation The staff was in the view that negative interest is a form of interest as IFRS 9 indicated that in extreme economic circumstances interest could be negative Therefore IAS 39 AG33 b was also applicable in a negative interest rate environment When considering the market rate of interest an entity was required to include the relevant credit or other spreads IAS 39 therefore contained sufficient guidance to resolve the issue raised by the submitter Many Committee members agreed with the staff view One Committee member said that even when including the spread sometimes the market interest could be negative albeit this was a very rare scenario He asked whether the interest could be hedged if there was no bifurcation One Committee member asked if jurisdictions that did not allow having interest below zero had an implicit floor in every contract Some Committee members struggled with negative interest being interest One Committee member said that the Committee had previously decided that negative interest should be presented in an appropriate expense category which did not automatically make it interest expense The Technical Director warned that not seeing the negative interest as interest could lead into problems with the SPPI test in IFRS 9 If it was argued that this was a special case this would have to be cut out very clearly One Committee member saw it as a penalty but wondered whether IFRS 9 could be analogised to account for the penalty The Chairman said that IFRS 9 clarified that interest was a composite This was picked up by an observing Board member who said that the discussion around interest should be conducted very carefully She said that the overall interest would still be interest even if one component dominated The Technical Director warned that this could also trigger a debate about the justification of discounting items in the balance sheet Some Committee members said that it should be clarified that comparing the benchmark interest and the market interest was not in accordance with IAS 39 AG33 b Instead the total coupon should be compared The Technical Director acknowledged this and said that the agenda decision should reflect this discussion One Committee member said that it needed to be clarified what the market was when determining the market interest rate When called to vote 11 of the 14 Committee members supported the agenda decision with some revision to the wording Related Topics Standards IAS 39 Financial Instruments Recognition and Measurement Related

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2015/september/ias-39 (2016-02-10)
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  • IFRS 9 — Financial instruments
    The Director for Implementation Activities replied that it could only be an Annual Improvement if the Committee concluded that the issue arose from an unintended oversight Many Committee members agreed with the staff s recommendation to clarify the issue preferably by way of an amendment However several Committee members expressed concern about the staff s conclusion that IAS 28 preceded IFRS 9 One Committee member said that IFRS 9 could not be interpreted to include long term investments for classification and measurement but not for impairment Some struggled with the compatibility between IAS 36 impairment and IFRS 9 amortised cost accounting Many Committee members preferred View B while some preferred View C and View D The Chairman concluded that the issue should be solved by way of an amendment He suggested that the staff brought back a paper with the suggested wording for the amendment One observing IASB member said that many issues relating to IAS 28 had been put on hold due to a broader project on the equity method She said that this could be the same with this project The Chairman suggested raising this issue with other Board members to obtain a clearer view of the Board s intentions Agenda Paper 7 Transition for hedge accounting The Technical Manager introduced the agenda paper that concerned a request for guidance on the transition from IAS 39 to IFRS 9 The Committee had been asked to consider whether an entity could treat a hedging relationship as continuing on transition from IAS 39 to IFRS 9 if the hedged item was changed from an entire non financial item to a component of a non financial item and this would be in order to align the accounting with its risk management objective Issue 1 If Issue 1 required dedesignation the Committee had been asked whether this changed if the entire non financial item remained designated Issue 2 An outreach conducted by the IASB had resulted in mixed views for Issue 1 While accounting firms had tended to discontinue the hedge securities regulators would continue the hedge Issue 2 also prompted mixed views Here accounting firms had tended to continue the original hedge designation All respondents had seen a potential for diversity as regards these issues The staff noticed that treating the hedging relationship as a continuing hedging relationship in Issue 1 implied a retrospective designation of a hedging relationship that was not permitted under IAS 39 As IFRS 9 required prospective application of the hedge accounting requirements retrospective application was also not allowed under IFRS 9 Under Issue 2 not changing the designation would result in a mismatch between the designation and the entity s risk management objective i e proxy hedging Proxy hedging was not prohibited by IFRS 9 but there should be at least some kind of linkage in the staff s view IFRS 9 acknowledged that it would not always be possible to replicate the actual risk management perspective Therefore the staff believed that the entity could continue

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2015/september/ifrs-9 (2016-02-10)
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  • IAS 32 — Classification of liability for prepaid cards issued by a bank in the bank’s financial statements
    introduced the Agenda paper 4 IAS 32 Financial Instruments Presentation Classification of liability for prepaid cards issued by a Bank in the Bank s financial statements He said that in the last discussion held by the Committee it was tentatively decided to analyse more complex arrangements including loyalty programs to consider the basis for distinction with prepaid cards He then said that the staff recommendation was that i the obligation of the bank for the prepaid card was a financial liability ii loyalty programmes should not be considered in this prepaid card issue iii not to proposed a narrow scope amendment to reflect breakage because that could lead to unintended consequences and iv not to take the issue into the agenda He then opened the discussion to the Committee There was general agreement with the staff recommendation Some Committee members raised concerns that the issue was not only related to banks Another concern mentioned in the discussion was related to whether the features of the prepaid card should include or exclude the fact that the customer could redeem it not only to third parties but also to the issuer itself Some Committee members suggested issuing a narrow scope amendment and also considering the amendments issued under U S GAAP which allowed breakage on the basis of a speech issued by the SEC staff The Project manager responded that to allow breakage would require amending IFRS 9 One Board member indicated that there would be no justification for treating this particular financial liability different from others The Implementation Director indicated that there was general support for the agenda decision they would delete reference to banks and also they would take out the observation that the issue was not widespread One Committee member raised a concern that the guidance would only be helpful for this particular fact patter Another Committee member requested to clarify that the discussion did not include loyalty programs The Chairman concluded that the staff would consider the proposals for rewording and the majority 13 votes approved the staff recommendation for the agenda decision Related Topics Standards IAS 32 Financial Instruments Presentation Related news We comment on a number of tentative agenda decisions of the IFRS Interpretations Committee 19 Jan 2016 We comment on a number of tentative agenda decisions of the IFRS Interpretations Committee 30 Nov 2015 Accounting for sovereign debt restructurings under IPSAS 21 May 2015 IASB s Financial Instruments Guide 2015 available now 16 Apr 2015 Feedback on the EFRAG Discussion Paper on the classification of claims 31 Mar 2015 IASB s Financial Instruments Guide 2015 coming soon 19 Mar 2015 All Related Related Publications Deloitte comment letter on tentative agenda decision on IAS 32 Offsetting and cash pooling 19 Jan 2016 Deloitte comment letter on tentative agenda decision on IAS 32 Classification of the liability for a prepaid card in the issuer s financial statements 30 Nov 2015 Deloitte comment letter on tentative agenda decision on IAS 32 Accounting for a financial instrument mandatorily convertible

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2015/september/ias-32 (2016-02-10)
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  • IFRS 5 — Non-current assets held for sale and discontinued operations
    stating that the individual assets within the disposal group may be misstated and could indeed be negative and therefore users would not have access to useful information The Chair clarified the situation stating that the situation under discussion may be one where an amount would have to be paid by the entity for the asset to be taken over by another entity Another Committee member agreed with the staff analysis but raised a potential conflict between the unit of account as determined by IFRS 5 and IAS 36 as these are different He suggested that the agenda decision be clarified to indicate that the situation being dealt with is where the disposal group consists of non current assets and not financial assets as this is an issue that has been included as a medium to long term issue Another Committee member agreed with the staff but suggested a wording amendment to the decision to clarify that there should be no restriction to the amount of loss to be recognised as this would provide more useful information to the users Another Committee member questioned whether the disposal group in total could be carried at an amount below zero and what such a situation would lead to be recognised in an entity s accounts She highlighted the fact that a linked issue was to be discussed in the medium term and given this the agenda decision relating to this issue may resulting in uncertainty as to whether an amount below zero could be recognised An observing IASB member agreed with the staff view if the disposal group is disposed of as one group However he added that should the disposal be piecemeal potentially given a change in plans to sell allocation to different assets within the group would be necessary The point was raised by a Committee member that disclosure is already required of the major asset and liability components therefore allocation of losses would be necessary She also echoed the concern regarding recognition of amounts below zero When called to vote ten members supported the staff s recommendations subject to wording changes being made to the agenda decision The Chair requested that the members provide the staff with their suggested amendments to the wording of the agenda decision Agenda Paper 2C Presentation of intragroup transactions between continuing and discontinued operations The Visiting Fellow introduced the paper which discussed an issue discussed at the May 2015 Committee meeting He explained that the issue had been taken to the IASB for discussion at their meeting in July He stated that the majority of the Committee members had agreed with the staff s analysis relating to the issue which would require elimination of intragroup transactions between continuing and discontinued operations in the income statement View 1 but questioned the staff s recommendation that additional information which included showing how eliminated transactions would impact continuing operations going forward View 2 be presented in the income statement Rather the Committee suggested that such information would be more useful and would not lead to departure from presentation requirements if provided in the notes The issue taking into account the Committee s discussion was taken to the IASB with the proposal that the issue could be addressed by a Committee agenda decision The IASB agreed with this proposal The Visiting Fellow summarised the analysis first presented to the Committee in May stating that the staff are of the belief that there are no current IFRS requirements that override the consolidation requirements of IFRS 10 and therefore full elimination of the transactions would be required In addition the Visiting Fellow stated that the staff were of the view that if an entity feels that this would not be the best way to disclose its results and additional information would be useful to users they could provide this in the notes in accordance with paragraph 30 of IFRS 5 The staff also believe that any amendment to the required presentation of the income statement would require a broader project than the Committee could undertake The Visiting Fellow stated that the staff recommend that the Committee should not add this issue to its agenda A number of Committee members agreed with the proposal but raised concerns that the resulting disclosure on the face of the income statement would not constitute useful information A few Committee members agreed with the staff recommendation but felt that the decision may be seen as the Committee dictating how the transactions should be presented Other members raised a concern that by advocating a single approach entities that may have been applying different approaches may be seen as having made an error They said that the wording of the agenda decision should be clear that this was not the case One member agreed with proposal and stated that if further disclosures were required this would entail an amendment to the standard or raising of another issue for discussion by the IASB In addition he questioned the importance of any additional information provided given the fact that transfer prices and therefore margins could be negotiated which would not be the case with non group transactions An observing IASB member summarised the conclusion from the previous Committee meeting in that the Committee agreed that View 1 is the correct interpretation of the standard regardless of how good the resulting disclosure may or may not be and that any supplementation of the standard should not necessarily be discussed by the Committee Rather the Committee was trying to confirm the requirements in the standard while acknowledging that other disclosures may be useful The Chair called for a vote aware that the wording of the agenda decision could be reworded in response to many Committee members requesting rewording to the agenda decision and eleven members voted in favour of the staff recommendation After the vote the wording of the proposed agenda decision was discussed further especially regarding a portion of the agenda decision that was perceived to require inclusion of pro forma

    Original URL path: http://www.iasplus.com/en/meeting-notes/ifrs-ic/2015/september/ifrs-5 (2016-02-10)
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