This IASB Update highlights preliminary decisions of the International Accounting Standards Board (Board). Projects affected by these decisions can be found on the work plan. The Board's final decisions on IFRS® Standards, Amendments and IFRIC® Interpretations are formally balloted as set out in the IFRS Foundation's Due Process Handbook.
The Board met on 20–24 September 2021, with some members joining remotely.
The Board met on 20 September 2021 to receive an update on its work plan. The Board was not asked to make any decisions.
The Board expects to receive the next update on its work plan by January 2022.
The Board met on 20 September 2021 to discuss the forthcoming request for information.
The Board approved the publication of the request for information and set a 120-day comment period.
All 12 Board members agreed with these decisions.
The Board expects that the request for information will be published in the final week of September 2021.
The Board met on 21 September 2021 to discuss potential refinements to the Dynamic Risk Management model (DRM model). The potential refinements address one of the challenges identified during meetings with preparers—incorporating risk limits in the DRM model.
The Board was not asked to make any decisions.
At its future meetings, the Board will continue to discuss potential refinements to address the key challenges identified during meetings with preparers.
The Board met on 24 September 2021 to discuss the classification of financial instruments as financial liabilities or equity instruments. It discussed:
The Board discussed problems that arise in practice in classifying:
The Board then discussed potential clarifications to IAS 32 that could resolve such practice problems.
The Board was not asked to make any decisions but expressed its intention to develop the potential clarifications further.
The Board discussed the problems that arise in practice when an issuer of a financial instrument determines whether terms that are required by law to be incorporated into the contract (or, indeed, other requirements imposed by law that are not incorporated into the contract) need to be considered in classifying the financial instrument.
The Board then discussed potential clarifications that it could develop to address such practice problems.
The Board was not asked to make any decisions but expressed its intention to develop the potential clarifications further.
The Board will continue to discuss these topics at a future meeting.
The Board met on 20 September 2021 to consider its plan to redeliberate the preliminary views it expressed in the Discussion Paper Business Combinations—Disclosures, Goodwill and Impairment.
The Board decided to prioritise performing further work:
The Board will then redeliberate its preliminary view that it should retain the impairment-only model to account for goodwill.
All 12 Board members agreed with this decision.
The Board will follow its project plan in future meetings.
The Board met on 23 September 2021 to discuss the scope and objectives of its Extractive Activities research project.
The Board tentatively decided that the project’s scope and objectives should be to explore two aspects of IFRS 6 Exploration for and Evaluation of Mineral Resources:
In reaching these decisions, the Board made a series of more detailed tentative decisions.
The Board tentatively decided to explore developing requirements or guidance to improve disclosures about E&E expenditure and activities.
The Board tentatively decided not to develop requirements or guidance about the unit of account to apply to E&E expenditure or about which E&E expenditures to capitalise and when to start and stop capitalisation.
The Board also tentatively decided not to develop requirements for standardising the accounting for intangible E&E expenditure and research and development expenditure. The Board also tentatively decided not to develop additional requirements or guidance for the impairment of E&E assets.
All 12 Board members agreed with these decisions.
In relation to matters outside the scope of IFRS 6, the Board tentatively decided not to develop requirements or guidance for the application of other IFRS Standards as part of its Extractive Activities research project. The Board also tentatively decided not to consider further the accounting for collaborative arrangements or disclosures that are not specifically required by IFRS Standards as part of the project.
All 12 Board members agreed with these decisions.
The Board tentatively decided not to explore developing requirements or guidance for reserve and resource information in financial statements.
All 12 Board members agreed with this decision.
The Board will consider what research to do for this project.
The Board met on 21 September 2021 to redeliberate some of the proposals in the Exposure Draft General Presentation and Disclosures relating to:
The Board discussed the scope of public communications in the definition of management performance measures but did not reach any conclusions. The Board expressed its intention to explore further how to clarify the scope of public communications, considering the objective of proposals for management performance measures and the extent to which detailed guidance is needed to meet that objective.
The Board also considered other aspects of the definition of management performance measures and expressed its intention to discuss how to clarify that an entity is not required:
The Board discussed the timing of public communications and how requirements for management performance measures would apply to private entities.
The Board was not asked to make any decisions.
The Board tentatively decided to amend the definition of management performance measures:
All 12 Board members agreed with this decision.
The Board discussed the proposed requirement for a management performance measure to communicate management’s view of an aspect of performance but did not reach any conclusions. The Board expressed its intention to analyse that proposal further, considering the objective of the proposals for management performance measures and the extent to which detailed guidance is needed to meet that objective.
The Board tentatively decided to set out the relationship between the general presentation and disclosure requirements and the principles of aggregation and disaggregation by:
All 12 Board members agreed with these decisions, subject to considering whether ‘class’ is the best term to use in all situations. This caveat applies to all the Board’s decisions on Agenda Paper 21D.
The Board tentatively decided to require an entity to explain how a disclosed class of items is included in line items in the primary financial statements. Nine of 12 Board members agreed with this decision.
The Board tentatively decided to include application guidance summarising characteristics that:
All 12 Board members agreed with this decision.
Aggregation and disaggregation in the notes
The Board tentatively decided to provide application guidance that states that, in general, the more diverse the items in a class (that is, the more dissimilar characteristics the items have in addition to the shared characteristics that form the basis for the class) the more likely it would be that disaggregation based on some of those dissimilar characteristics would result in material information. Seven of 12 Board members agreed with this decision.
The Board also discussed whether to provide cost relief for the general requirement to provide information about classes. The Board decided to continue that discussion after it has considered cost relief for specific disclosure requirements at a future Board meeting.
All 12 Board members agreed with this decision.
Aggregation and disaggregation in the primary financial statements
The Board tentatively decided to provide application guidance that states that, in general, the more diverse the items in a class (that is, the more dissimilar characteristics the items have in addition to the shared characteristics that form the basis for the class) the more likely it would be that disaggregation based on some of those dissimilar characteristics would result in a more understandable overview.
Seven of 12 Board members agreed with this decision.
The Board will discuss Agenda Papers 21C, 21E and 21F and continue to redeliberate the project proposals at future meetings.