IFRS published the IFRS Interpretations Committee (IFRIC) update for the meeting in June 2019. The update offers a summary of the tentative decisions of IFRIC, with the discussions largely focusing on the financial instruments (IFRS 9) standard, the leases (IFRS 16) standard, and holdings of crypto-currencies. IFRIC invites comments on the tentative agenda decisions by August 20, 2019.
IFRIC discussed certain matters and tentatively decided not to add them to its standard-setting agenda, including the following:
- Fair Value Hedge of Foreign Currency Risk on Non-Financial Assets (IFRS 9 on financial instruments)—IFRIC received two requests about fair value hedge accounting applying IFRS 9. Both requests asked whether foreign currency risk can be a separately identifiable and reliably measurable risk component of a non-financial asset held for consumption that an entity can designate as the hedged item in a fair value hedge accounting relationship.
- Lessee’s Incremental Borrowing Rate (IFRS 16 on leases)—IFRIC received a request about the definition of a lessee’s incremental borrowing rate in IFRS 16. The request asked whether a lessee’s incremental borrowing rate is required to reflect the interest rate in a loan with both a similar maturity to the lease and a similar payment profile to the lease payments.
- Lease Term and Useful Life of Leasehold Improvements (IFRS 16 and IAS 16 Property, Plant and Equipment)—IFRIC received a request about cancellable or renewable leases. The cancellable lease described in the request is one that does not specify a particular contractual term but continues indefinitely until either party to the contract gives notice to terminate. The contract includes a notice period of, for example, less than 12 months and the contract does not oblige either party to make a payment on termination. The renewable lease described in the request is one that specifies an initial period and renews indefinitely at the end of the initial period, unless terminated by either of the parties to the contract.
Comment Due Date: August 20, 2019
Keywords: International, Accounting, Banking, IFRS 9, IFRS 16, Financial Instruments, Cryptocurrencies, Leases, Hedge Accounting, IFRIC, IFRS
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