The Board met on 16 May 2017 to discuss implementation and maintenance projects.
IFRIC® Update (Agenda Paper 12)
The Board received an update about the May 2017 meeting of the IFRS Interpretations Committee. Details of this meeting were published in the IFRIC Update, available here.
Ratification of IFRIC Interpretation (Agenda Paper 12A)
The Board ratified IFRIC Interpretation Uncertainty over Income Tax Treatments (the Interpretation). The Interpretation addresses how to reflect uncertainty in accounting for income taxes.
All 13 Board members agreed with this ratification.
The Board expects to issue the Interpretation in the second quarter of 2017.
Amendments to IAS 28—Long-term interests in associates and joint ventures (Agenda Paper 12B)
The Board considered comments on the proposed amendments to IAS 28 Investments in Associates and Joint Ventures which would clarify that IFRS 9 Financial Instruments applies to long-term interests in associates or joint ventures. Long-term interests are interests to which the equity method is not applied but that, in substance, form part of the net investment in an associate or joint venture. The proposed amendments were included in the Exposure Draft Annual Improvements to IFRS Standards 2015–2017 Cycle. The Board tentatively decided to finalise the proposed amendments to IAS 28 and to:
- clarify in IAS 28 that:
- an entity applies the requirements in IFRS 9 to long-term interests before applying the loss allocation and impairment requirements in IAS 28; and
- in applying IFRS 9, the entity does not take account of any adjustments to the carrying amount of long-term interests that result from the application of IAS 28.
- develop educational material that includes an example illustrating how the requirements in IAS 28 and IFRS 9 interact with respect to long-term interests.
Twelve of 13 Board members agreed with these decisions and one member disagreed.
In addition, the Board tentatively decided to:
- set an effective date of 1 January 2019, with earlier application permitted;
- require retrospective application of the amendments applying IAS 8, subject to the transition requirements in c. below; and
- provide transition requirements similar to those in IFRS 9 regarding the classification and measurement of financial assets for entities that apply the amendments after they first apply IFRS 9.
All 13 Board members agreed with these decisions.
The Board will discuss due process steps and transition requirements for first-time adopters at a future meeting.