Wednesday 12 March 2014
The issues relate to several requests with regard to the application of the requirements of IFRS 11.
At its November 2013 meeting, the Interpretations Committee identified the following two priority issues for further consideration among various implementations issues: (Issue 1) whether an assessment of ‘other facts and circumstances’ should take into account facts and circumstances that do not involve contractual and (legal) enforceable terms; and (Issue 2) how the parties to a joint operation should recognise assets, liabilities, revenues and expenses, especially if the parties’ interests in the assets and liabilities differ from their ownership interest in the joint operation.
At the January 2014 Interpretations Committee meeting, the staff presented an analysis of Issue 1. This analysis covered the following five sub-issues:
With regard to Issue 1A, the Interpretations Committee tentatively decided not to add Issue 1A to its agenda.
With regard to the other issues considered, the Interpretations Committee noted that it is important to understand how and why particular facts and circumstances create rights and obligations that result in the joint arrangement being classified as a joint operation.
The Interpretations Committee asked the staff to develop examples to analyse this matter. These examples should include fact patterns illustrating Issues 1B–1E and consider the application of IFRS 11 to some common joint arrangement structures. The Interpretations Committee also requested that this analysis consider the implications for accounting within separate financial statements. After it has considered this further analysis, the Interpretations Committee will decide whether to recommend adding examples or other guidance to the Standard.
The staff will present this analysis at a future meeting.
The Interpretations Committee tentatively decided not to address one issue
The Interpretations Committee identified priority issues among various implementation issues
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