December 2016 IASB meeting notes posted
The IASB met at its offices in London on 13–14 December 2016. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.
Tuesday 13 December
The last meeting for 2016 started with a brief oral update on IFRS 15 Revenue from Contracts with Customers. The update focused on the most recent TRG meeting held by the FASB.
Two implementation issues were discussed. The Board supported a proposal to amend IAS 19 Employee Benefits and IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. There are still some minor issues to address, which will be raised with the IFRS Interpretations Committee. The Board also decided to develop a narrow scope amendment to IFRS 9 Financial Instruments in relation to prepayment options and the assessment of the SPPI condition.
The Financial Instruments with the Characteristics of Equity Project discussion was on derivatives on ‘own equity’. The paper included an assessment of how the model being proposed would be affected by seven variables. However, the discussion focused mainly on foreign currency rights issues, for which the Board requested further analysis.
The Rate Regulated Activities project returned to the Board for its first substantive discussion since July 2015 for an education session. The Board was generally positive about the approach. The Board was not asked to make any technical decisions.
The Board was briefed on the upcoming release of the IFRS Taxonomy Update for the 2015/2016 common practice project, which focuses on agriculture, leisure, franchises, retail, and financial institutions.
Wednesday 14 December
The Wednesday sessions began with a session on the Conceptual Framework. They discussed papers on Measurement—redrafting the factors to consider in selecting a measurement basis; Business activities and long-term investment; Concepts of capital and capital maintenance; and Derecognition. The Board agreed with most of the staff recommendations.
The Board discussed its project on the Primary Financial Statements, focusing on the scope of the planned discussion paper. The staff proposed a narrow scope project, with targeted improvements. The main focus will be on the Statement of Comprehensive Income, with some possible changes to the Statement of Cash Flows. The staff have also been examining developing templates for a small number of industries. The Board supported taking a targeted approach, but will leave open the possibility of making consequential changes to the statement of financial position. A significant portion of the discussion focused on the importance of getting the disaggregation principle to work properly. The Board also wants to examine ways to bring more attention to OCI. There was very little support for developing templates.
The Disclosure Initiative had two topics—materiality and disclosures about restrictions on cash and cash equivalents.
The Board concluded its discussions on the materiality practice statement and the staff will start preparing the final document. The Board also decided to develop a separate exposure draft to amend the definition of materiality in IAS 1 Presentation of Financial Statements. Previously the Board had decided to wait until they had received feedback on the Principles of Disclosure discussion paper.
For disclosures about restrictions on cash and cash equivalents, the Board decided, by a narrow margin and after some debate, to support the staff recommendation not to proceed with the proposed amendments to IAS 7 Statement of Cash Flows that were exposed in 2014.