IASB Update February 2024

Work plan overview

IASB work plan update (Agenda Paper 8)

The IASB met on 19 February 2024 to receive an update on its work plan. The IASB was not asked to make any decisions.

Next step

The IASB expects to receive another update on its work plan in the next three to four months.

Research and standard-setting

Post-implementation Review of IFRS 15 Revenue from Contracts with Customers (Agenda Paper 6)

The IASB met on 21 February 2024 to analyse stakeholder feedback on the Request for Information Post-implementation Review of IFRS 15 Revenue from Contracts with Customers. The analysis covered matters related to applying IFRS 15, namely:

• identifying performance obligations in a contract;
• principal versus agent considerations; and
• licencing.

Identifying performance obligations in a contract (Agenda Paper 6A)

In response to the feedback, the IASB tentatively decided to take no further action on matters related to:

1. applying the notion of a 'distinct' good or service;
2. identifying a promise to transfer goods or services;
3. convergence with FASB ASC Topic 606, Revenue from Contracts with Customers; and
4. other aspects of identifying performance obligations in a contract.

All 14 IASB members agreed with this decision.

The IASB also tentatively decided to discuss at a later date whether to add some explanations from paragraphs BC105 and BC116K of the Basis for Conclusions to the Standard, along with possible clarifications of other aspects of IFRS 15. These explanations would help to clarify some aspects of (a) and, combined with the other possible clarifications, might result in sufficient improvement to IFRS 15 to warrant standard-setting.

Nine of 14 IASB members agreed with this decision.

Principal versus agent considerations (Agenda Paper 6B)

In response to the feedback, the IASB tentatively decided:

1. to classify as low priority the matter related to assessing control over services and intangible assets and to consider this matter in the next agenda consultation; and
2. to take no further action on the matters related to:
   1. clarifying the relationship between the concept of control and the indicators in paragraph B37;
   2. identifying a customer of a supplier that sells its goods or services through an intermediary;
   3. identifying performance obligations in arrangements involving principal versus agent determinations;
   4. applying the disclosure requirements about principal versus agent determinations; and
   5. other aspects of principal versus agent determinations.

Thirteen of 14 IASB members agreed with decision (a) and all 14 IASB members agreed with decisions (b)(i)–(v).

The IASB also decided to discuss at a later date whether to add some explanations from paragraphs BC385H and BC385E of the Basis for Conclusions to the Standard, along with possible clarifications of other aspects of IFRS 15. These explanations would help to clarify some aspects of (b)(i) and (b)(ii) and, combined with the other possible clarifications, might result in sufficient improvement to IFRS 15 to warrant standard-setting.

Nine of 14 IASB members agreed with this decision.

Licencing (Agenda Paper 6C)

In response to the feedback, the IASB tentatively decided to take no further action on matters related to:

1. accounting for licence renewals;
2. determining the nature of a licence;
3. determining the scope of licencing guidance;
4. accounting for sales-based or usage-based royalties; and
5. other aspects of licencing.

Thirteen of 14 IASB members agreed with decision (a) and all 14 IASB members agreed with decisions (b)–(e).

Next step

The IASB will discuss the analysis of feedback on the other topics identified in the project plan.

Rate-regulated Activities (Agenda Paper 9)

The IASB met on 22 February 2024 to redeliberate the proposals in its Exposure Draft Regulatory Assets and Regulatory Liabilities relating to:

• the boundary of a regulatory agreement (Agenda Paper 9A);
• amendments to IAS 36 Impairment of Assets (Agenda Paper 9B); and
• disclosure requirements (Agenda Paper 9C).

The IASB also discussed new possible disclosure requirements arising from its redeliberations on the Exposure Draft (Agenda Paper 9D).

Agenda Paper 9E is an illustrative draft of the disclosure requirements recommended in Agenda Paper 9C and Agenda Paper 9D. The IASB was not asked to make any decisions on Agenda Paper 9E.

When the IASB completes its redeliberations it will publish an IFRS Accounting Standard on rate-regulated activities (prospective RRA Standard).

Boundary of a regulatory agreement (Agenda Paper 9A)

For the prospective RRA Standard, the IASB tentatively decided:

1. to acknowledge that a right to supply goods or services might exist for an undefined period; and
2. to include a requirement that an entity that has an enforceable right to supply goods or services include unrecovered or unfulfilled cash flows in the measurement of a regulatory asset or regulatory liability for which the entity has either:
   1. an enforceable right to recover or enforceable obligation to fulfil by adding amounts to or deducting amounts from future regulated rates charged; or
   2. an enforceable right to receive or enforceable obligation to pay compensation on termination of the agreement.

All 14 IASB members agreed with these decisions.

Amendments to IAS 36 (Agenda Paper 9B)

For the prospective RRA Standard, the IASB tentatively decided:

1. to retain the proposal to exclude regulatory assets from the scope of IAS 36;
2. to omit the proposed amendments to paragraphs 43 and 79 of IAS 36; and
3. to provide no further guidance on applying IAS 36.

All 14 IASB members agreed with these decisions.

Disclosures proposed in Exposure Draft (Agenda Paper 9C)

For the prospective RRA Standard, the IASB tentatively decided:

1. to retain the overall disclosure objective proposed in paragraph 72 of the Exposure Draft;
2. to retain the proposals on aggregation and disaggregation of disclosures in paragraphs 75–76 of the Exposure Draft;
3. to include examples of the characteristics an entity could use to aggregate or disaggregate disclosures in accordance with the principles in the prospective IFRS Accounting Standard Presentation and Disclosure in Financial Statements (prospective PFS Standard);
4. to retain the specific disclosure objective relating to financial performance proposed in paragraph 77 of the Exposure Draft;
5. to retain the proposals in paragraph 78(a)–(e) of the Exposure Draft requiring that an entity disclose components of regulatory income or regulatory expense relating to the creation of regulatory assets and regulatory liabilities, recovery of regulatory assets, fulfilment of regulatory liabilities, and to regulatory interest income on regulatory assets and regulatory interest expense on regulatory liabilities;
6. to require that an entity apply the aggregation and disaggregation principles in the prospective PFS Standard when disclosing other components of regulatory income or regulatory expense, such as those arising from changes in the carrying amount of a regulatory asset or regulatory liability caused by a change in the boundary of a regulatory agreement, and those arising from remeasurements of regulatory assets and regulatory liabilities;
7. to retain the specific disclosure objective relating to financial position proposed in paragraph 79 of the Exposure Draft;
8. to retain the proposals in paragraphs 80(a) and 81 of the Exposure Draft requiring that an entity disclose quantitative information, using time bands, about when it expects to recover regulatory assets and fulfil regulatory liabilities;
9. to retain the proposal in paragraph 80(b) of the Exposure Draft requiring that an entity disclose the discount rate or ranges of discount rates used in measuring regulatory assets and regulatory liabilities at the end of the reporting period;
10. to retain the proposal in paragraph 80(c) of the Exposure Draft requiring that an entity disclose the regulatory interest rate provided by the regulatory agreement for a regulatory asset, if the entity uses the minimum interest rate as the discount rate for that regulatory asset;
11. to retain the proposal in paragraph 80(d) of the Exposure Draft requiring that an entity disclose an explanation of how risks and uncertainties affect the recovery of regulatory assets or fulfilment of regulatory liabilities;
12. to provide no additional guidance on risks and uncertainties that affect the recovery of regulatory assets or fulfilment of regulatory liabilities;
13. to combine the proposed specific disclosure objective relating to changes in regulatory assets and regulatory liabilities in paragraph 82 of the Exposure Draft with the specific disclosure objective in paragraph 79 of the Exposure Draft;
14. to retain the proposals in paragraph 83 of the Exposure Draft requiring that an entity disclose a reconciliation from the opening to the closing carrying amounts of regulatory assets and regulatory liabilities;
15. to include examples of significant changes in regulatory assets and regulatory liabilities that are not a consequence of regulatory income or regulatory expense;
16. to include a requirement that an entity disclose a qualitative explanation of any significant changes in regulatory assets and regulatory liabilities that are not a consequence of regulatory income or regulatory expense;
17. to retain the proposal in paragraph 84 of the Exposure Draft relating to the disclosure of regulatory assets and regulatory liabilities measured applying paragraph 61 of the Exposure Draft; and
18. to extend the proposals in paragraph 78 of the Exposure Draft to include a requirement that an entity disclose separately the components of regulatory income or regulatory expense included in other comprehensive income.

All 14 IASB members agreed with decisions (a)–(c) and (f),13 of 14 IASB members agreed with decisions (d), (e) and (g)–(q) and 8 of 14 IASB members agreed with decision (r).

New disclosures (Agenda Paper 9D)

For the prospective RRA Standard, the IASB tentatively decided:

1. to include a specific disclosure objective that an entity be required to disclose information that enables users of financial statements to understand whether the entity’s regulatory capital base has a direct or no direct relationship with its property, plant and equipment;
2. to include—in order to achieve the specific disclosure objective in (a)—a requirement that an entity disclose:
   1. whether its regulatory capital base has a direct or no direct relationship with its property, plant and equipment; and
   2. the reasons the entity has concluded its regulatory capital base has a direct or no direct relationship with its property, plant and equipment;
3. not to include a requirement that an entity disclose the amount of its regulatory capital base;
4. to include a requirement that an entity disclose the nature of unrecognised regulatory assets and unrecognised regulatory liabilities;
5. to include a requirement that an entity disclose the regulatory approach (nominal or real) used by the regulator to compensate the entity for inflation;
6. not to include a requirement that an entity disclose assumptions used in estimating uncertain future cash flows for the measurement of regulatory assets or regulatory liabilities related to long-term performance incentives beyond those disclosures required by IAS 1 Presentation of Financial Statements;
7. to include, for an entity whose regulatory capital base has a direct relationship with its property, plant and equipment and capitalises its borrowing costs, a requirement to disclose whether it receives regulatory returns on an asset not yet available for use; and
8. not to include—for an entity whose regulatory capital base has a direct relationship with its property, plant and equipment and capitalises its borrowing costs—a requirement to disclose:
   1. the composition of the regulatory returns between debt and equity returns, and when these regulatory returns are included in regulated rates charged; and
   2. the effects of those regulatory returns on changes in the related regulatory assets or regulatory liabilities.

All 14 IASB members agreed with decisions (a), (b), (f) and (h), 13 of 14 IASB members agreed with decisions (c) and (g), 12 of 14 IASB members agreed with decision (d) and 11 of 14 IASB members agreed with decision (e).

Next step

The IASB will continue to redeliberate the project proposals.

Equity Method (Agenda Paper 13)

The IASB met on 19 February 2024 to continue its discussions on the project.

Towards an exposure draft—Clarifications to the IASB’s tentative decisions (Agenda Paper 13A)

The IASB tentatively decided:

1. to clarify that if a parent entity applies the equity method to its investments in subsidiaries in its separate financial statements, it would apply paragraph 24 of IAS 28 Investments in Associates and Joint Ventures to a step acquisition of a subsidiary.
   Thirteen of 14 IASB members agreed with this decision.
2. to clarify that if an investor or joint venturer purchases an additional interest in an associate or a joint venture, it would apply the IASB’s tentative decisions to contingent consideration arrangements and deferred taxes.
   All 14 IASB members agreed with this decision.
3. to amend paragraph 10 of IAS 28 to refer to ‘changes in the investor’s share of the associate’s net assets’.
   Thirteen of 14 IASB members agreed with this decision.

The IASB decided to retain the project’s scope and not add the application questions:

1. how does a parent entity measure the cost of its investment in a subsidiary acquired in stages and accounted for at cost in separate financial statements?
2. how does an entity recognise the acquisition-related cost of investments accounted for using the equity method?

Thirteen of 14 IASB members agreed with this decision.

Towards an exposure draft—Interaction with the IASB’s project Disclosure Initiative—Subsidiaries without Public Accountability: Disclosures (Agenda Paper 13B)

The IASB tentatively decided to propose amending the prospective IFRS Accounting Standard Subsidiaries without Public Accountability: Disclosures (prospective Subsidiaries Standard) to require that a subsidiary applying that Standard disclose:

1. on obtaining significant influence in an associate or joint control in a joint venture:
   1. the amount of contingent consideration recognised as part of the cost of the investment;
   2. a description of the contingent consideration arrangement; and
   3. the basis for determining the amount of the payment;
2. for each subsequent reporting period until the subsidiary collects or settles the contingent consideration or until it is cancelled or expires:
   
   1. any changes in the recognised amounts, including any differences arising upon settlement; and
   2. the valuation techniques and key model inputs used to measure the contingent consideration.

All 14 IASB members agreed with this decision.

The IASB tentatively decided to propose amending the prospective Subsidiaries Standard to require that an eligible subsidiary disclose gains or losses on downstream transactions:

1. to its associates and joint ventures; and
2. to its subsidiaries if it applies the equity method to its investments in subsidiaries in separate financial statements, as permitted in IAS 27 Separate Financial Statements.

Eleven of 14 IASB members agreed with this decision.

The IASB tentatively decided not to propose amendments to the prospective Subsidiaries Standard to require an eligible subsidiary to disclose a reconciliation between the opening and closing carrying amount of its investments in associates and joint ventures.

Ten of 14 IASB members agreed with this decision.

Next step

The IASB will consider any outstanding matters regarding transition provisions and decide whether it is satisfied that the required due process steps have been completed before publishing an exposure draft of amendments to IAS 28.

Post-implementation Review of IFRS 9—Impairment (Agenda Paper 27)

The IASB met on 20 February 2024 to discuss feedback from its Post-implementation Review of the impairment requirements in IFRS 9 Financial Instruments.

The IASB discussed an analysis of stakeholder views on:

1. the general approach to recognising expected credit losses (ECL)—in particular, the IASB considered feedback on applying this approach to specific financial instruments such as intragroup financial instruments and purchased assets; and
2. the requirements for determining significant increases in credit risk (SICR).

The IASB tentatively decided to take no standard-setting action on matters related to the general approach to recognising ECL and the requirements for determining SICR.

All 14 IASB members agreed with the decision to take no standard-setting action on matters related to the general approach to recognising ECL.

Thirteen of 14 IASB members agreed with the decision to take no standard-setting action on matters related to the requirements for determining SICR.

The IASB also discussed an updated review of the academic literature examining the effects of applying the impairment requirements in IFRS 9.

Next step

The IASB will discuss the analysis of feedback on other topics identified in the project plan.

Second Comprehensive Review of the IFRS for SMEs Accounting Standard (Agenda Paper 30)

The IASB met on 20 February 2024 to redeliberate the proposals in the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard.

Proposed amendments to Section 9 Consolidated and Separate Financial Statements (Agenda Paper 30A)

The IASB tentatively decided:

1. to delete paragraph 9.23(b) of the Standard, which requires an SME to disclose the basis for concluding that control exists when the parent does not own more than half of the voting power in the other entity; and
2. to add to paragraph 8.6 of the Standard examples of the types of judgements that management might make in the process of applying the SME’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

All 14 IASB members agreed with this decision.

Proposed amendments to Section 19 Business Combinations and Goodwill (Agenda Paper 30B)

The IASB tentatively decided to proceed with the amendments to Section 19 of the Standard proposed in the Exposure Draft, including:

1. introducing requirements for an acquisition achieved in stages (step acquisition) as set out in IFRS 3 Business Combinations;
2. not introducing the fair value option for measuring non-controlling interests in the acquiree; and
3. not including the application guidance in paragraphs B36 and B53 of IFRS 3 Business Combinations on reacquired rights arising from pre-existing relationships.

All 14 IASB members agreed with this decision.

The IASB also tentatively decided:

1. to relocate the Illustrative Examples in Appendix B of Section 19 proposed in the Exposure Draft to separate educational modules; and
2. to consider suggestions for additional guidance and illustrative examples when updating the separate educational modules.

All 14 IASB members agreed with this decision.

Proposed revised Section 23 Revenue from Contracts with Customers—Redeliberation topics (Agenda Paper 30C)

The IASB tentatively decided:

1. to withdraw the proposed option for an SME to account for a contract modification as a separate contract if:
   1. the modification increases the scope of the existing contract because of additional goods or services promised that are distinct from those in the existing contract; and
   2. the modification increases the price of the existing contract by an amount of consideration that reflects the entity’s stand-alone selling price of the additional goods or services and any appropriate adjustments to that price to reflect the circumstances of that contract;
2. to withdraw the proposal to require an SME to account for an option as a separate promise if it provides a material right to the customer and the effect of doing so is significant to the individual contract; and
3. to withdraw the proposal to require an SME to recognise as an asset the incremental costs of obtaining a contract with a customer if the SME expects to recover those costs.

All 14 IASB members agreed with these decisions.

Instead, the IASB tentatively decided to require an SME:

1. to account for a contract modification as a separate contract if:
   1. the modification increases the scope of the existing contract because of additional goods or services promised that are distinct from those in the existing contract; and
   2. the modification increases the price of the existing contract by an amount of consideration that reflects the entity’s stand-alone selling price of the additional goods or services and any appropriate adjustments to that price to reflect the circumstances of that contract;
2. to account for an option that provides a material right to the customer as a separate performance obligation if the SME can do so without undue cost or effort; and
3. to recognise the costs of obtaining a contract with a customer as an expense when incurred.

All 14 IASB members agreed with these decisions.

The IASB tentatively decided to confirm its proposals to require an SME:

1. to identify each promise to transfer a distinct good or service, or bundle of goods or services; and
2. to include an amount of variable consideration in the transaction price only to the extent that it is highly probable that this amount will become due when the uncertainty associated with the variable consideration is resolved.

All 14 IASB members agreed with these decisions.

The IASB tentatively decided:

1. to include the term ‘barter’ in the description of non-cash consideration in the Standard;
2. to include separately in the Standard:
   1. the requirement for an SME to measure the fair value of non-cash consideration; and
   2. the exemption from the requirement to measure the fair value of non-cash consideration;
3. not to include guidance on methods for estimating stand-alone selling prices in the Standard, but to include this guidance in educational material on the Standard; and
4. to combine the requirement for an SME to allocate variable consideration with the requirement for an SME to allocate discounts in the Standard.

All 14 IASB members agreed with these decisions.

Next step

The IASB will continue to redeliberate the proposals in the Exposure Draft.

Maintenance and consistent application

Power Purchase Agreements (Agenda Paper 3)

The IASB met on 21 February 2024 to receive a project update.

The IASB was not asked to make any decisions.

Next step

The IASB will continue to discuss potential amendments to IFRS 9 Financial Instruments.

Maintenance and consistent application (Agenda Paper 12)

The IASB met on 20 February 2024 to discuss:

• the amendments proposed in the Exposure Draft Annual Improvements to IFRS Accounting Standards—Volume 11 (Agenda Papers 12A–12I); and
• its project on Use of a Hyperinflationary Presentation Currency by a Non-hyperinflationary Entity (Agenda Paper 12J).

Annual Improvements to IFRS Accounting Standards—Hedge Accounting by a First-time Adopter (Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards): Analysis of feedback (Agenda Paper 12A)

The IASB discussed feedback on its proposed amendments to IFRS 1 First-time adoption of International Financial Reporting Standards. The IASB had proposed to amend paragraphs B5–B6 of IFRS 1 to improve their consistency with the requirements in IFRS 9 Financial Instruments and to add cross-references to improve the accessibility and understandability of IFRS Accounting Standards.

The IASB tentatively decided to proceed with these proposed amendments.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Gain or Loss on Derecognition (Amendments to IFRS 7 Financial Instruments: Disclosures): Analysis of feedback (Agenda Paper 12B)

The IASB discussed feedback on its proposed amendments to IFRS 7 Financial Instruments: Disclosures. The IASB had proposed to amend paragraph B38 of IFRS 7 to update an obsolete cross-reference and related wording.

The IASB tentatively decided to proceed with the proposed amendments.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7): Analysis of feedback (Agenda Paper 12C)

The IASB discussed feedback on its proposed amendments to paragraphs IG1 and IG20B of the Guidance on implementing IFRS 7 Financial Instruments: Disclosures (Guidance). The IASB had proposed to amend paragraph IG1 of the Guidance to add a statement clarifying that the Guidance does not illustrate all the requirements in IFRS 7, and to amend paragraph IG20B of the Guidance to simplify its wording.

The IASB tentatively decided to proceed with the proposed amendments to:

1. paragraph IG1 of the Guidance with a minor wording change; and
2. paragraph IG20B of the Guidance with no changes.

All 14 IASB members agreed with these decisions.

Annual Improvements to IFRS Accounting Standards—Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7): Analysis of feedback (Agenda Paper 12D)

The IASB discussed feedback on its proposed amendments to paragraph IG14 of the Guidance. The IASB had proposed to amend paragraph IG14 of the Guidance to improve its consistency with paragraph 28 of IFRS 7.

The IASB tentatively decided to proceed with the proposed amendments with a minor wording change.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Derecognition of Lease Liabilities (Amendments to IFRS 9 Financial Instruments): Analysis of feedback (Agenda Paper 12E)

The IASB discussed feedback on its proposed amendment to IFRS 9 Financial Instruments related to derecognition of lease liabilities. The IASB had proposed to amend paragraph 2.1(b)(ii) of IFRS 9 to add a cross-reference to paragraph 3.3.3 of IFRS 9 to resolve potential confusion for a lessee applying the derecognition requirements in the Standard. The IASB also proposed that a lessee be required to apply the amendment to paragraph 2.1(b)(ii) of the Standard to lease liabilities that are extinguished on or after the beginning of the annual reporting period in which the lessee first applies the amendment.

The IASB tentatively decided to proceed with the proposed amendments.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Transaction Price (Amendments to IFRS 9 Financial Instruments): Analysis of feedback (Agenda Paper 12F)

The IASB discussed feedback on its proposed amendments to IFRS 9 related to transaction price. The IASB had proposed to amend paragraph 5.1.3 and Appendix A of IFRS 9 to clarify the use of the term ‘transaction price’.

The IASB tentatively decided to proceed with the proposed amendments.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Determination of a ‘De Facto Agent’ (Amendments to IFRS 10 Consolidated Financial Statements): Analysis of feedback (Agenda Paper 12G)

The IASB discussed feedback on its proposed amendments to IFRS 10 Consolidated Financial Statements. The IASB had proposed to amend IFRS 10 to remove from paragraph B74 an inconsistency with paragraph B73.

The IASB tentatively decided to proceed with the proposed amendments with a minor wording change.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Cost Method (Amendments to IAS 7 Statement of Cash Flows): Analysis of feedback (Agenda Paper 12H)

The IASB discussed feedback on its proposed amendment to IAS 7 Statement of Cash Flows. The IASB had proposed to amend paragraph 37 of IAS 7 to remove a reference to ‘cost method’, which is no longer defined in IFRS Accounting Standards.

The IASB tentatively decided to proceed with the proposed amendment.

All 14 IASB members agreed with this decision.

Annual Improvements to IFRS Accounting Standards—Volume 11: Effective date and due process (Agenda Paper 12I)

The IASB discussed due process steps for the amendments proposed in the Exposure Draft.

The IASB tentatively decided that an entity be required to apply the amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 for annual reporting periods beginning on or after 1 January 2026, with earlier application permitted.

All 14 IASB members agreed with this decision.

The IASB decided to finalise the amendments without re-exposure. 

All 14 IASB members confirmed they were satisfied the IASB has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting the amendments.

No IASB member indicated an intention to dissent from issuing the amendments.

Next step

The IASB expects to publish the amendments in the third quarter of 2024.

Use of a Hyperinflationary Presentation Currency by a Non-hyperinflationary Entity (IAS 21): Disclosure and transition requirements and other matters (Agenda Paper 12J)

The IASB discussed these aspects of the proposed amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates:

1. disclosure requirements;
2. transition and early application; and
3. when the presentation currency becomes or ceases being hyperinflationary.

For disclosure requirements, the IASB tentatively decided to propose that:

1. an entity that translates the results and financial position of a foreign operation with a non-hyperinflationary functional currency into a hyperinflationary presentation currency be required to disclose summarised financial information about that foreign operation;
2. an entity within the scope of the proposed amendments be required to disclose that its financial statements (or the results and financial position of its foreign operation) and corresponding figures for previous periods have been translated at the closing rate at the date of the most recent statement of financial position; and
3. an entity whose presentation currency ceases being hyperinflationary be required to disclose that fact.

Thirteen of 14 IASB members agreed with these decisions.

For transition and early application, the IASB tentatively decided to propose that:

1. an entity that already applies IFRS Accounting Standards be required to apply the amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors when that entity first applies the proposed amendments;
2. an entity that already applies IFRS Accounting Standards be exempt from disclosing the information required by paragraph 28(f) of IAS 8 when that entity first applies the proposed amendments;
3. no transition relief be provided for first-time adopters; and
4. an entity that already applies IFRS Accounting Standards be permitted to apply the proposed amendments earlier than the effective date and be required to disclose that it has done so.

All 14 IASB members agreed with these decisions.

For a presentation currency that becomes or ceases being hyperinflationary, the IASB tentatively decided to propose that:

1. no specific requirements be included to address situations in which an entity’s presentation currency becomes hyperinflationary.
2. an entity be required to apply paragraph 39(b) of IAS 21 prospectively to income and expenses arising after the end of the previous reporting period if the entity’s presentation currency ceases being hyperinflationary. The IASB tentatively decided an entity would not be required to retranslate income and expenses arising before the end of the previous reporting period.

All 14 IASB members agreed with these decisions.

Next step

The IASB will discuss disclosure requirements for subsidiaries without public accountability and due process steps.

Amendments to the Classification and Measurement of Financial Instruments (Agenda Paper 16)

The IASB met on 21 February 2024 to discuss feedback on the Exposure Draft Amendments to the Classification and Measurement of Financial Instruments, which proposed amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.

The IASB discussed:

• the prospective disclosure requirements relating to contractual cash flows (Agenda Paper 16A);
• the proposed effective date and transition requirements (Agenda Paper 16B);
• due process steps (Agenda Paper 16C); and
• proposals related to the disclosure requirements for subsidiaries without public accountability (Agenda Paper 16D).

The disclosure requirements relating to contractual cash flows (Agenda Paper 16A)

The IASB tentatively decided to finalise the disclosure requirements proposed in paragraphs 20B–20C of the Exposure Draft, subject to:

1. limiting the requirements to contractual terms that could change the amount of contractual cash flows based on a contingent event that is not directly related to a change in basic lending risks or costs; and
2. changing the requirement to disclose quantitative information to permit an entity to disclose information other than the range of possible adjustments to contractual cash flows.

All 14 IASB members agreed with this decision.

The effective date and transition requirements (Agenda Paper 16B)

The IASB tentatively decided to set an effective date of annual reporting periods beginning on or after 1 January 2026.

Eight of 14 IASB members agreed with this decision.

The IASB also tentatively decided:

1. to finalise the transition requirements proposed in the Exposure Draft; and
2. to permit early application of the amendments to the requirements related to solely payments of principal and interest and the disclosure requirement in IFRS 7 relating to changes in contractual cash flows, separately from the other amendments.

All 14 IASB members agreed with this decision.

Due process steps (Agenda Paper 16C)

The IASB tentatively decided to begin the balloting process for the prospective amendments to IFRS 9 and IFRS 7 without re-exposing the IASB’s tentative revisions to these prospective amendments.

All 14 IASB members agreed with this decision.

Two IASB members indicated that they are considering dissenting from issuing the amendments.

Reduced disclosure requirements for subsidiaries without public accountability (Agenda Paper 16D)

For the ‘catch-up’ exposure draft the IASB plans to publish after it issues the prospective IFRS Accounting Standard Subsidiaries without Public Accountability: Disclosures later in 2024, the IASB decided:

1. to not include the prospective amendments to IFRS 7 relating to equity instruments designated at fair value through other comprehensive income; and
2. to include the prospective amendments to IFRS 7 relating to changes in contractual cash flows.

All 14 IASB members agreed with this decision.

Next step

The IASB will prepare the final amendments for balloting.