Welcome to the website of the IFRS Foundation and the IASB

Tuesday 29 July 2014

Banner graphic

Annual Improvements

IASB meeting summaries


 IASB November 2011


 

 

Aggregation of operating segments and identification of the chief operating decision maker (IFRS 8 Operating Segments)

The IASB discussed how concerns raised by the European Securities and Markets Authority (ESMA) regarding the application of the aggregation criteria and the identification of the chief operating decision maker (CODM) in IFRS 8 could be addressed, with reference to how similar concerns had been addressed in US GAAP.

The IASB noted that, in accordance with paragraphs 5 and 7 of IFRS 8, a CODM is actively involved in reviewing information of an operating nature and fulfils two distinct but related functions (ie performance assessment and resource allocation). In addition, paragraph 9 of IFRS 8 states that the CODM generally discusses operating activities, financial results or other plans for the segment with the 'segment manager' or might also fulfil the role of segment manager.

Consequently, the IASB decided that no further clarification of the requirements in IFRS 8 relating to the identification of the CODM is needed. However, the IASB agreed to include an additional disclosure in paragraph 22 of IFRS 8 requiring a brief description of both the operating segments that have been aggregated and the economic indicators that have been assessed in order to conclude that the operating segments have 'similar economic characteristics' in accordance with paragraph 12 of IFRS 8.

The IASB will include the proposed amendment to paragraph 22 of IFRS 8 in the next Improvements to IFRSs exposure draft.

All IASB members voted in favour of this decision.

Classification of interest paid that is capitalised (IAS 7 Statement of Cash Flows)

In a past meeting the IASB had tentatively made decisions regarding the classification of interest paid that is classified as part of the cost of an asset and tentatively approved it for inclusion within the Annual Improvements project. In this meeting the IASB confirmed that this issue met the criteria for Annual Improvements.

All IASB members voted in favour of this decision.

Key Management Personnel (IAS 24 Related Party Disclosures)

The IASB discussed proposed amendments to IAS 24 to clarify the identification and disclosure requirements for related party transactions that take place when key management personnel (KMP) services are provided by a management entity that is not otherwise a related party of the reporting entity.

The IASB decided not to amend the existing definition of KMP in IAS 24.

However, the IASB tentatively decided to amend IAS 24 to identify entities that provide KMP services as a related party of the reporting entity, and to require the separate disclosure of fees paid to related parties in respect of KMP services. The IASB will include the proposed amendments in the next Improvements to IFRSs exposure draft.

All IASB members voted in favour of these decisions.

The IASB also discussed the staff recommendation that compensation provided to the management entity for KPM services would not be compensation as defined in IAS 24�those amounts would not need to be disclosed.

One IASB member voted against this recommendation.

The IASB also tentatively decided to accept the staff's proposal to seek further input on variable payments to related parties and to consider any proposals as part of the 2011-2013 Annual Improvements project.

10 IASB members supported this proposal.

Issue not recommended for inclusion within the Annual Improvements cycle for 2010 2012

Following the IFRS Interpretations Committee's recommendation, the IASB agreed that the timing of recognition of compensation for items of property, plant and equipment that were impaired, lost or given up in paragraph 65 of IAS 16 Property, Plant and Equipment (ie 'when the compensation becomes receivable'), is sufficiently understood within IFRSs and no clarification is needed.

Consequently, the IASB agreed with the Interpretations Committee that this issue did not meet the criteria for inclusion in Annual Improvements.

14 IASB members voted in favour of this decision.

Date: 11/16/2011