On The Horizon For IFRS - December 17, 2012

IASB / FASB joint meeting November 2012

IASB issues November 2012 joint IASB / FASB meeting highlights

Key issues

At the November 2012 joint IASB / FASB meeting the following issues were discussed:

Conceptual Framework: The IASB held an education session on the Conceptual Framework project. The IASB also discussed issues associated with the reporting entity chapter. No decisions were made. Due process documents: The IASB members agreed that they complied with the due process requirements to date for the following forthcoming exposure drafts: Accounting for the sale or contribution of assets between an investor and its associate or joint venture (Proposed amendments to IFRS 10, Consolidated Financial Statements and IAS 28, Investments in Associates and Joint Ventures) Acquisition of an Interest in a Joint Operation (Proposed amendment to IFRS 11, Joint Arrangements) On December 13, 2012, the IASB issued both of the Exposure Drafts.

Education session ‒ Levies charged by public authorities on entities that operate in a specific market: The IASB was updated on the IFRS Interpretations Committee's discussions at its November 2012 meeting on the draft Interpretation on accounting for levies charged by public authorities on entities that participate in a specific market, but was not asked to make any decisions. Education sessions ‒ Financial Instruments: Impairment: The IASB, separately and jointly with the FASB held educational sessions to discuss the proposed impairment models of the respective Boards. No decisions were made. Financial Instruments: Impairment: The IASB continued its discussions on the three bucket impairment model and tentatively decided: To simplify the criteria for recognition of lifetime expected losses That the recognition of lifetime expected losses for higher credit quality assets would occur when the asset drops below investment grade To provide guidance on how to assess the criterion To establish a rebuttable presumption to recognize lifetime expected losses when the asset is 30 days past due To allow the use of a 12 month probability of default to assess the lifetime expected loss criterion in certain circumstances To provide reduced disclosure requirements for entities using the simplified approach To proceed with the three bucket impairment model with the clarifications noted above Insurance contracts: The IASB and the FASB continued their joint discussions of the insurance contracts proposals and specifically discussed the discount rate for cash flows that are not subject to mirroring and that are affected by asset returns. The Boards reached certain tentative decisions. In addition, the IASB met separately to discuss presentation and disclosure requirements and a proposed approach for future fieldwork. The IASB reached certain tentative decisions. Offsetting disclosures ‒ Amendments to IFRS 7: In December 2011, the IASB and the FASB published converged offsetting disclosure requirements. The IASB was updated on the recent decisions made by the FASB to amend its disclosure requirements for offsetting. No decisions were made. Report of the Enhanced Disclosure Task Force: Russell Picot, EDTF Co-Chair, and Jerry Edwards, Financial Stability Board, presented to the IASB a summary of the Report of the Enhanced Disclosure Task Force, which includes suggestions for enhancing the clarity, comparability, and timeliness of information that banks provide to their investors. Revenue recognition: The Boards continued their deliberations of the revised Exposure Draft, Revenue from Contracts with Customers, and reached tentative decisions on the following topics: Constraining the cumulative amount of revenue recognized Collectibility Licenses Work plan: The work plan as of December 4, 2012, reflecting decisions made at the November 2012 meeting is available on the IASB website. All decisions reached at IASB meetings are tentative and may be changed or modified at future meetings. Board decisions become final only after completion of a formal ballot to issue a Standard or Interpretation or to publish an Exposure Draft.

The International Accounting Standards Board has issued an IASB Update, which summarizes the joint IASB / FASB meeting that was held on November 19-21, 2012. The IASB met alone for certain sessions.

Highlights of the meeting are discussed below.

Conceptual Framework

The IASB held an education session on work that had previously been conducted on the Conceptual Framework project before it was suspended in 2010. The IASB also discussed the reporting entity chapter of the Conceptual Framework. No decisions were made.

The IASB will continue to discuss issues related to the Conceptual Framework project at the December 2012...

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