Published

01/21/20102010-01-21 15:04:20.26

IAS Plus Update 10-01

Issued 11 January 2010

The IAS Plus website has been updated with the Deloitte observer notes from the January IFRIC meeting.

Annual improvements deliberations

IFRIC has been requested by the IASB to consider constituent
comments on the annual improvement process with a view to making
recommendation on how to proceed with the amendments. IFRIC debated the
administrative process issues and began considering various amendments,
including the following:

• Impairment of associates – agreed to recommend against
  finalising amendments to IAS 27 requiring impairment testing of
  investments in separate financial statements under IAS 39, slight
  preference for IAS 36 approach, possibility of recommending to the IASB
  to more widely consider accounting in separate financial statements


• Measurement of NCI in a business combination –
  recommend the IASB finalise the amendments to restrict the option to
  measure NCI at a proportionate share of the acquiree’s identifiable net
  assets to components of NCI that are present ownership interests
  (basically ordinary shares with some preference shares in certain
  circumstances). All other equity instruments would be measured at fair
  value at the date of the business combination


• Transition to IFRS 3(2008) – IFRIC agreed to
  recommend finalisation of the amendments to clarify that pre-transition
  contingent consideration arising in business combinations must be
  accounted for under IFRS 3(2004) and adjusted against goodwill rather
  than being accounted for under IAS 39 and impacting profit or loss


• Partial use of fair value for associates – agreed
  to recommend the amendment to permit ‘split’ accounting for associates,
  i.e. a portion at fair value (if the conditions are met) and a portion
  using equity accounting


• Interim reporting – agreed to recommend
  finalisation of the amendment to clarify the need for disclosure in
  interim reports in relation to significant events and transactions.
  This amendment may result in additional disclosures in half-year
  reports when compared to past Australian practice


• Other amendments – agreed to recommend the
  amendments to IFRS 7 (nature and extent of risk arising from financial
  instruments) and IFRS 1 (fair value or deemed cost exemption), and
  discontinue the proposed amendments to IAS 39 following publication of
  IFRS 9 (fair value option and embedded foreign currency derivatives).

Overview of other topics discussed

• Share-based payment vesting conditions – IFRIC
  agreed to add a new project to its agenda dealing with the
  clarification of vesting and non-vesting conditions under IFRS 2 Share-based Payment, dealing with the linkages between performance targets and employee service


• Stripping costs in the production phase of a mine
  – IFRIC agreed to limit the scope of the proposed Interpretation on
  this topic to accounting for the costs of removal of waste material in
  a surface mining activity during the production phase


• Possible new agenda topics – IFRS 1 (capitalisable costs of self-constructed assets on changing accounting policies on transition)


• >


• New tentative agenda rejection decisions – IAS 38
  (interaction of goodwill impairment testing with IFRS 8), IAS 21
  (functional currency of an investment holding company), IAS 32
  (shareholder discretion), IAS 39 (volumetric optionality)


• Confirmation of previous agenda rejection decisions
  – IFRS 2 (settlement contingent on future events), IAS 27 (comparative
  information under the ‘pooling of interest’ method, combined financial
  statements), IAS 18 (treasury share dividends), IFRS 4/IAS 32
  (investments in REITs), IAS 32 (‘fixed for fixed’ condition).

Access the Deloitte IFRIC observer notes on IAS Plus.