2010 IFRIC meeting - IAS 39 still a remaining issue - fair value application and the bifurcation of an embedded foreign currency derivative
11 January 2010
During the IFRIC meeting several issues were discussed, including IAS 32 Financial Instruments. Where there is a contractual obligation to deliver cash to the holder at the discretion of the issuer's shareholders, should preference shares be classified as a financial liability or as equity?
The IFRIC re-discussed the issue, which was previously discussed at the November 2009 IFRIC meeting. The staff noted that based on the additional outreach performed there was a widespread diversity in practice that was not limited only to the energy sector.
Nonetheless, the staff noted that, when IFRS 9 was being finalised, the IASB agreed to reconsider the scope of IAS 39 at a later stage of the IAS 39 replacement project. The financial instruments team already considered that issue in connection the current project on Hedge Accounting. Since the Board will amend IFRS 9 and consider changes to scope of IAS 39 and hedge accounting soon (IFRS 9 is expected to be finalised in 2010), the staff asked the IFRIC not to add the item to its agenda as it would be addressed by the Board. The IFRIC agreed.
The following standards were discussed in detail:
· IAS 38 Intangible Assets – Amortisation method
· IFRS 2 Share-based Payment – Share-based payment transactions in which the manner of settlement is contingent on future events
· IAS 27 Consolidated and Separate Financial Statements – Presentation of comparatives when applying the 'pooling of interests' method
· The IFRIC confirmed the tentative agenda decision published in the November IFRIC Update subject to minor drafting changes.
· IAS 27 Consolidated and Separate Financial Statements – Combined Financial Statements and Redefined Reporting Entities
· IAS 18 Revenue – Receipt of a dividend of treasury shares
· IFRS 4 Insurance Contracts and IAS 32 Financial Instruments Presentation – Scope issue for investments in REITs
· IAS 32 Financial Instruments: Presentation – 'Fixed for fixed' condition
· IFRS 1 First-time Adoption of IFRSs – Fair value or revaluation basis as deemed cost
· IAS 27 – Impairment of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements of the investor
· IFRS 3 Business Combinations – Measurement of non-controlling interests (NCI)
· IFRS 3 – Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS
· IFRS 7 Financial Instruments: Disclosures – Disclosures about the nature and extent of risks arising from financial instruments
· IAS 28 Investments in Associates – Partial use of fair value for measurement of associates
· IAS 34 Interim Financial Reporting – Significant events and transactions
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