The Board met on 22 March 2017 to discuss two topics in the Financial Instruments with Characteristics of Equity research project.
The Board was given a summary of discussions to date (Agenda Paper 5A, which was provided for information only). No decisions were made.
The Board discussed:
- the application of the Gamma approach to derivatives on ‘own equity’;
- a summary of interactions with other IFRS Standards; and
- due process and permission to ballot.
Application of the Gamma approach to derivatives on ‘own equity’ (Agenda Paper 5B)
The Board discussed how the Gamma approach would apply to the classification of derivatives on non-controlling interests with an exercise price denominated in a foreign currency.
All 12 Board members agreed with the analysis in the paper.
Interactions with other IFRS Standards (Agenda Paper 5C)
The Board discussed a summary of the potential implications of the Gamma approach for The Conceptual Framework for Financial Reporting, other IFRS Standards, IFRIC Interpretations and other projects on its agenda.
The Board was not asked for any decisions.
Due process and permission to ballot (Agenda Paper 5D)
The Board reviewed the due process steps it has taken to date in developing the Financial Instruments with Characteristics of Equity Discussion Paper (the Discussion Paper).
All 12 Board members confirmed they are satisfied that the Board has completed all the necessary due process steps on the project to date and instructed the staff to begin drafting and balloting the Discussion Paper.
The Board also decided that 180 days should be allowed for the Discussion Paper comment period. All 12 Board members agreed with this decision.
Given its publication schedule, the Board expects to publish the Discussion Paper towards the end of 2017.