Insurance contracts

The IASB instructed the staff to start the balloting process. The IASB will discuss the effective date and any sweep issues that arise in the drafting process at a future meeting. The final standard is expected around the end of 2016.

Goodwill and Impairment

The IASB continued its discussions. No decisions were made. The IASB will continue its discussions at future meetings and consider the steps it needs to take before holding further discussions with the FASB.

Measurement of interests in associates and joint ventures

The IASB discussed the IC’s request for input on whether long-term interests that in substance form part of the net investment in an associate or joint venture should be tested for impairment by applying IAS 28, IFRS 9 or a combination of both.

The IASB supported the IC’s continued discussion of the issue and noted the possibility that the IC might develop an interpretation to clarify the type of interests that are included in the net investment.

The IASB agreed that such long-term interests would be recognised and measured by applying the requirements of IFRS 9. The IASB further agreed that entities would apply the impairment requirements of IFRS 9 and IAS 28 when assessing the net investment. Feedback from the IASB will be provided to the IC at a future meeting.

Non-current liabilities: conditions that are tested after the end of the reporting period

The IASB considered how its proposals in the ED Classification of Liabilities should be applied when conditions in the lending agreement are tested or reviewed after the end of the reporting period. The Board tentatively decided that:

  • compliance with any conditions in the lending agreement is assessed as at the reporting date;
  • the proposed amendment to the Standard should include the requirement that compliance with a condition as at the end of the reporting period should determine whether a right subject to that condition should affect classification even in cases where the conditions are tested subsequent to the year-end;
  • when an agreement includes a periodic review clause and the right to defer settlement is subject to the lenders review, the entity has a right to defer settlement only up to the date of the periodic review.

At a future meeting, the staff will present analysis that examines the guidance with respect to the transfer of equity as a means of settlement and that confirms the Board’s proposals by using specific examples raised in the comment letters.

Financial Instruments with characteristics of equity

The IASB discussed the further developments of the three approaches it has identified as possible ways of improving IAS 32 Financial Instruments. The IASB’s discussions focused on the presentation of sub-classes of liabilities including presenting income and expense from particular type of liabilities, and the attribution of profit or loss and other comprehensive income to sub-classes of equity. No decisions have been made.