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Highlights from the IASB's May Board Meeting



The IASB’s May Board meeting met once again virtually due to the COVID-19 situation.

The first order of business was to consider feedback in response to the April 2020 Exposure Draft Covid-19-Related Rent Concessions, which proposed an amendment to IFRS 16 Leases. Overall the feedback was positive, however some minor amendments were agreed. Including extending the timeframe for capturing COVID-19-related rent concessions for which any reduction in lease payments affects by six months to 30 June 2021.

This was discussed briefly by the Chair of the IASB, Hans Hoogervorst, in the IASB’s podcast:

The IASB continued to discuss amendments to IFRS 17, with a range of what are known as sweep (or minor) issues being discussed before finalisation of the amendment standard. These are mostly relatively minor, and perhaps what is most note worthy is what is not included. Despite continued pressure the IASB has not back down on requiring disclosure on annual cohorts.

This was also discussed by Hans Hoogervorst in the IASB’s podcast:

As noted you can read more on Hans’ views here: https://www.ifrs.org/news-and-events/2020/04/ifrs-17-insurance-contracts-why-annual-cohorts/

The other two matters we would like to focus on here revolve around the ongoing matter of boiler plate in the annual reports. The first was to do with the management commentary project.

The IASB have been discussing the disclosure objectives and supporting guidance to be included in the revised IFRS Practice Statement 1 Management Commentary. At this meeting among other things they considered disclosures around risks. The IASB has decided to specify in the disclosure objectives that management commentary should provide information and analysis to help investors and creditors understand the risks that could disrupt the entity’s business model.

There has been a concern that this could lead to legalistic boilerplate covering every conceivable contingency. In order to avoid this the practice statement will make clear that disclosure should focus on the risks, trends and factors that the entity’s management monitors and manages.

Here is Hans highlighting this in this month’s podcast:

The second area where boiler plate came up was discussing the feedback on its Exposure Draft Disclosure of Accounting Policies which proposed amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements. The focus has been on paragraph 117C of the amendments which states:

“Information about accounting policies that focuses on how an entity has applied the requirements in IFRS Standards to its own circumstances provides entity specific information that is more useful to users of financial statements than standardised descriptions or information that only duplicates the recognition or measurement requirements of IFRS Standards.” (emphasis added)

There have been mixed views on whether this precludes repeating requirements from the IFRS Standards in the notes to annual reports, and whether this is in fact desirable. IASB Member Martin Edelmann dissented to the Exposure Draft on the grounds that he believed there are times when duplication of the requirements aides understanding. Based on the comments received to the exposure draft it now looks like the staff will try and find a middle ground, that allows, where appropriate, for some repetition of requirements. Here is IASB Vice-Chair Sue Lloyd summarising the discussion in the IASB podcast:


For those who are interested to get a taste of what the discussion looked like you can watch an extract from the IASB discussions here:


A full summary of the May IASB Board Meeting is available here: https://www.ifrs.org/news-and-events/updates/iasb-updates/may-2020/

Recordings of the meeting and the agenda papers can be accessed here: https://www.ifrs.org/news-and-events/calendar/2020/may/international-accounting-standards-board/?f1=2020&f2=May&f3=


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