IFRS 13 Fair Value Measurement�Short-term receivables and payables
The IASB discussed an amendment to be included in the annual improvements exposure draft (ED), which is due to be published in December 2011. The amendment aims to clarify an amendment to IFRS 9 Financial Instruments (issued October 2010) that resulted from IFRS 13 Fair Value Measurement. IFRS 9 was amended by deleting paragraph B5.4.12, which allowed an entity to measure short-term receivables and payables with no stated interest rate at invoice amounts if the effect of discounting is immaterial. At the time, the Board did not intend to change practice, believing that the other references to materiality covered this matter. However, the Board was informed that some users of IFRS think that the deletion means the requirements have changed.
To address this issue, the Board tentatively agreed to add a paragraph in the Basis for Conclusions of IFRS 13 that would provide the rationale to support the deletion of that paragraph in IFRS 9. This amendment will be exposed within the 2010-2012 annual improvements cycle.
Twelve members agreed with that decision.
IFRS 3 Business Combinations�consistency of contingent consideration guidance
The IASB discussed a proposed amendment to remove perceived inconsistencies related to the guidance in IFRS 3 for contingent consideration in a business combination. Currently IFRS 3 makes reference to multiple IFRSs for determining the classification, subsequent measurement and disclosure of contingent consideration. Specifically the concerns relate to:
- which IFRS is applicable for the classification of the contingent consideration as debt or equity (IFRS 3 paragraph 40);
- which IFRS is applicable for the measurement of subsequent changes in the fair value of contingent consideration (IFRS 3 paragraph 58); and
- whether the disclosure requirements of IFRS 7 Financial Instruments: Disclosures apply in addition to the requirements of IFRS 3 paragraph B64.
The proposed changes would delete references to guidance in other IFRSs. In addition, the scope of IAS 39 Financial Instruments: Recognition and Measurement and IFRS 9 Financial Instruments would be amended to ensure that any contingent consideration within the scope of those standards would not qualify for amortised cost measurement.
The Board tentatively decided to include the proposed amendment within the next Improvements to IFRSs exposure draft. All Board members voted in favour of this proposal.