IASB Update February 2018

The International Accounting Standards Board (IASB) has published its February 2018 edition of Update, which highlights preliminary decisions made at its February 2018 meeting.

Primary Financial Statements

The IASB tentatively decided to propose:

• separate presentation of (i) the cash flows that arise between an entity and its ‘integral’ associates and joint ventures and (ii) the cash flows that arise between an entity and its ‘non-integral’ associates and joint ventures. The split between ‘integral’ and ‘non-integral’ associates and joint ventures would be the same for the statement of cash flows as for the statement(s) of financial performance.
• the separate presentation of the investing cash flows of ‘integral’ and ‘non-integral’ associates and joint ventures should be within the ‘investing activities’ section of the statement of cash flows.

Asset Profile

Regarding the role of the asset profile within the dynamic risk management model, the IASB Board decided the staff should continue developing the model as follows:

• to set qualifying criteria for items within the asset profile;
• to allow for designation on a portfolio basis;
• to allow for designation of a percentage of a portfolio, provided conditions are met;
• to preclude voluntary de-designation;
• to require de-designation when certain events take place; and
• to require formal documentation.

Business Combinations under Common Control

The IASB tentatively decided to use the acquisition method set out in IFRS 3 Business Combinations as the starting point in its analysis of transactions within the scope of the project. Using that starting point will not determine whether the Board will ultimately propose applying the acquisition method to all, or even to many, transactions within the scope of the project.

Rate Regulated Activities

The Board tentatively decided that:

• the accounting model will use as its unit of account the individual timing differences that create the incremental rights and obligations arising from the regulatory agreement.
• the present regulatory right - to charge a rate increased by an amount as a result of past events - meets the definition of an asset in the Conceptual Framework.
• the present regulatory obligation - to provide goods or services at a rate reduced by an amount as a result of past events - meets the definition of a liability in the Conceptual Framework.

The full copy of IASB Update is available from the IASB web site here.