IFRS Interpretations Committee agenda decisions are no longer regarded as a mere rejection notice. For some entities, the accompanying explanatory information could be new information that requires reconsideration of their existing accounting policies. The IASB expects affected entities to change their accounting policies in a timely manner.
Agenda decisions as issued by the International Financial Reporting Standards Interpretations Committee (Committee) can no longer be regarded as a mere rejection notice1. In a March 2019 article by Sue Lloyd, the Committee’s Chair, it was made clear that the International Accounting Standards Board (IASB) expects entities to implement accounting policy changes in a timely manner if their policies are inconsistent with an agenda decision.
Any resulting changes would be accounted for as a change in accounting policy in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, i.e. it is to be applied retrospectively.
In her article, Sue Lloyd provided clarity on what the IASB would regard as ‘sufficient time’ for implementing accounting policy changes that result from an agenda decision. Although she acknowledged that determining what is ‘sufficient’ will be judgemental based on particular facts and circumstances, the period of time needed for implementing such changes as envisaged by the IASB is ‘months rather than years’.
In April 2019, the IFRS Foundation published proposed amendments to the IFRS Foundation’s Due Process Handbook to formally clarify the role, status and timing for implementing the Committee’s agenda decisions.
Given the principle-based nature of IFRS Standards, questions in relation to the application of principles and requirements in IFRS Standards often arise in practice. The flow diagram sets out how a question submitted to the Committee might be dealt with applying IFRS Foundation’s standard-setting due process.
Agenda decisions are a way of making a statement about why a change of an IFRS requirement or an interpretation of that requirement is not necessary. They often include explanatory information that is intended to provide guidance for the consistent application of IFRS Standards. As a result, agenda decisions form part of an IFRS guidance.
“Entities should keep up with the IFRS Interpretations Committee’s developments, taking into consideration the potential impact of published agenda decisions on their business whilst being mindful that tentative agenda decisions provide further opportunities to comment on and influence the Committee’s thinking.”
– Patricia Stebbens
The Committee releases an IFRIC Update after each meeting (usually held bi-monthly) summarising its deliberations and decisions. Refer to the Appendix in the PDF version of this Reporting Update for a list of agenda decisions issued in the past 12 months.
©2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.