This IASB Update highlights preliminary decisions of the International Accounting Standards Board (Board).
The Board's final decisions on IFRS® Standards, Amendments and IFRIC® Interpretations are formally balloted as set out in the Due Process Handbook of the IFRS Foundation and the IFRS Interpretation Committee.
The Board met remotely on 17 and 19 March 2020.
The topics discussed were:
The Board met on 19 March 2020 to discuss the treatment of ‘target profit’ in the accounting model it is developing for regulatory assets and regulatory liabilities. Target profit is the profit that an entity is entitled to include in the regulated rate. Principles that the Board had already discussed establish when the following elements of target profit are part of total allowed compensation:
The Board discussed how an entity should determine when other elements of target profit are part of total allowed compensation. The Board tentatively decided that:
The Board expects to publish an exposure draft in the second half of 2020.
The Board met on 19 March 2020 to discuss:
The Board also considered plans for the order of topics in future meetings and for developing guidance on those topics (Agenda Paper 15). The Board was not asked to make decisions on those plans.
The Board tentatively decided that the revised Practice Statement should:
All 13 Board members present agreed with this decision. One Board member was absent.
The Board also tentatively decided that the revised Practice Statement should describe the objective of management commentary as supporting primary users in assessing an entity’s prospects for future cash flows and management’s stewardship of the entity’s economic resources by providing useful information and analysis that:
Thirteen of 14 Board members present agreed with this decision.
The Board also discussed a working draft of guidance on the objective of management commentary to be included in the revised Practice Statement, including guidance on:
The Board discussed initial ideas on developing disclosure objectives for the types of content expected to be included in management commentary.
The Board was not asked to make any decisions.
The Board’s next discussion is expected to cover business model, resources and relationships, strategy and opportunities.
The Board met on 17 March 2020 to discuss:
The Board tentatively decided to defer the effective date of IFRS 17 incorporating the amendments to annual reporting periods beginning on or after 1 January 2023.
Twelve of 14 Board members agreed with this decision. One Board member was absent.
The Board tentatively decided to extend the fixed expiry date of the temporary exemption in IFRS 4 from applying IFRS 9 to annual reporting periods beginning on or after 1 January 2023.
Twelve of 14 Board members agreed with this decision.
All 14 Board members confirmed that they were satisfied that the Board has complied with the applicable due process requirements and has, in particular, undertaken sufficient consultation and analysis to begin the process for balloting the amendments to IFRS 17 and the amendment to IFRS 4.
No Board members indicated they intend to dissent from the issuance of the amendments to IFRS 17 and the amendment to IFRS 4.
The Board expects to issue the amendments to IFRS 17 in the second quarter of 2020.