IASB 10 February 2010

The Board approved the project plan and timetable for issuing Improvements to IFRSs in April 2010, based on the exposure draft published in August 2009.

The Board discussed nine of the proposed improvements to IFRSs. On the basis of the comments that the Board had received from respondents and the recommendation of the IFRIC, the Board tentatively decided to finalise six of the improvements:

• Exemption in paragraph D8 of IFRS 1 First-time Adoption of International Financial Reporting Standards - revaluation basis as deemed cost: the amendment extends the exemption to also apply to revaluations that occurred after the date of transition to IFRSs but during the period covered by the first IFRS financial statements, with resulting adjustments recognised at the measurement date directly in retained earnings.
• IFRS 3 (revised 2008) Business Combinations - Measurement of non-controlling interests (NCI): the amendment clarifies that the choice for measuring the NCI in the acquiree applies only to components of NCI that are present ownership instruments that entitle their holders to a proportionate share of the entity's net assets in the event of liquidation.
• IFRS 3 (revised 2008) - transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS: an entity should apply the requirements from IFRS 3 (issued 2004) as reproduced in the revised IFRS 3.
• IFRS 7 Financial Instruments: Disclosures - clarification of disclosures: the amendment clarifies and amends the qualitative, quantitative and credit risk disclosures.
• IAS 28 Investments in Associates - partial use of fair value for measurement of associates: enables a parent entity to measure part of the investment in an associate at fair value in its consolidated financial statements when that part is designated as at fair value through profit or loss in accordance with the scope exclusion in paragraph 1 of IAS 28. The Board decided not to include in the forthcoming IFRS on joint arrangements equivalent guidance on the partial use of fair value for the measurement of investments in joint ventures.
• IAS 34 Interim Financial Reporting - significant events and transactions: emphasis on disclosure principles and addition of guidance on how to apply these principles.

In several cases the proposed final wording of the improvements was modified in the light of suggestions made in the comment letters. The revised, proposed, amendments can be viewed on the Annual Improvements page of the IASB website.

The Board noted that the requirements that relate to the accounting for contingent consideration acquired in a business combination are contained in more than one IFRS. The Board asked the IFRIC to provide a recommendation on how to present the guidance on contingent consideration within one standard.

The Board also decided to remove from the annual improvements project, without finalisation, three proposed amendments that had been included in the Improvements to IFRSs exposure drafts in either August 2008 or August 2009. The Board made this decision on the grounds that these issues should be reconsidered taking into account the broad replacement project IAS 39 Financial Instruments: Recognition and Measurement rather than on a piecemeal basis:

• IAS 27 Consolidated and Separate financial Statements - impairment of investments in associates in the separate financial statements of the investor,
• Two issues concerning IAS 39 that were originally part of the Improvements to IFRSs ED published in August 2008:
• bifurcation of embedded foreign currency derivative,
• application of the fair value option.

At the March 2010 IFRIC and IASB meetings, the staff will present an analysis to the IFRIC and to the Board of the comment letters for the following issues included in the Improvements to IFRSs ED published in August 2009:

• IFRS 1 - Accounting policy changes in the year of adoption,
• IFRS 3 - Un-replaced and voluntarily replaced share-based payment awards,
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - application of IFRS 5 to loss of significant influence over an associate or a jointly-controlled entity,
• IAS 1 Presentation of Financial Statements - clarification of statement of changes in equity,
• IAS 8 Accounting policies, Changes in Accounting Estimates and Errors - change in terminology for the qualitative characteristics,
• IAS 27 - transition requirements for amendments made as a result of IAS 27 (revised 2008) to IAS 21, IAS 28 and IAS 31,
• IAS 40 Investment Property - change from fair value model to cost model,
• IFRIC 13 Customer Loyalty Programmes - fair value of award credit.