June 21, 2019

IASB published an updated work plan and a summary of its June meeting, which presents preliminary decisions of the Board. The topics discussed at the June meeting included primary financial statements, rate-regulated activities, goodwill and impairment, small and medium-size entities (SMEs) standard review and update (covering IFRS 9 and 16), and financial instruments with characteristics of equity.

IASB discussed the 2019 comprehensive review of the IFRS for SMEs Standard. In particular, IASB discussed whether the Request for Information to be published as part of the 2019 Review should seek views on whether and how to align the IFRS for SMEs Standard with standards and amendments not incorporated in the IFRS for SMEs Standard. IASB decided to seek views in the Request for Information on aligning the IFRS for SMEs Standard with IFRS 9, in particular, on:

  • Introducing principles for the classification and measurement of financial assets based on contractual cash flows 
  • Not amending the requirements of the IFRS for SMEs Standard in certain areas
  • The need for requirements on hedge accounting for entities applying the IFRS for SMEs Standard and, subject to clarifying those needs, on retaining the current requirements for hedge accounting in Section 12
  • Aligning the IFRS for SMEs Standard with the simplified approach in IFRS 9 for the impairment of financial assets
  • Changing the fallback to IAS 39 on recognition and measurement of financial instruments to fallback to IFRS 9, if the requirements of the IFRS for SMEs Standard are aligned with IFRS 9 

Additionally, IASB decided to seek views in the Request for Information on aligning the IFRS for SMEs Standard with IFRS 16 on leases and, in particular, on:

  • Requiring a single lease accounting model to be applied to all leases, other than short-term or low-value asset leases
  • Incorporating simplifications and practical expedients already permitted by IFRS 16
  • Introducing additional simplifications

Keywords: International, Accounting, Banking, Work Plan, IFRS 16, IFRS 9, Financial Instruments, Hedging, Leases, IAS 39, IASB

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