IASB Update June 2017

The International Accounting Standards Board (IASB) has published its June 2017 edition of Update, which highlights preliminary decisions made at its June 2017 meeting

Conceptual Framework

The Board decided to emphasise that the information needs of users play an important part in establishing the boundary of a reporting entity that is not a legal entity.

Accounting Policies and Accounting Estimates

Regarding proposed amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the Board decided to include a proposal to delete ‘IG Example 3 – Prospective application of a change in accounting policy when retrospective application is not practicable’.

The Board also considered whether it should provide further exceptions in IAS 8 for retrospective application of voluntary changes in accounting policies, either for all voluntary changes or only for those arising as a result of agenda decisions made by the IFRS Interpretations Committee.  The Board tentatively decided to amend IAS 8 to lower the impracticability threshold regrading retrospective application of voluntary changes in accounting policies that result from agenda decisions.  The proposed threshold would include a consideration of the benefits and costs of applying the change retrospectively.

The Board expects to publish the ED in the third quarter of 2017.

Definition of a Business

Regarding comments received on the Exposure Draft Definition of a Business and Accounting for Previously Held Interests, the Board tentatively decided inter alia to :

• clarify that to be considered a business an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together are required to contribute significantly to the ability to create outputs;

• clarify that if an acquired set of assets generated revenues before the acquisition, but is integrated by the acquirer and no longer generates revenues after the acquisition, that set of assets is regarded as creating outputs; and

• to remove from paragraph B12 of IFRS 3 the statement that a set of assets and activities in which goodwill is present is presumed to be a business; and

The full version of IASB Update can be downloaded from the IASB’s web site here.