This IASB Update highlights preliminary decisions of the International Accounting Standards Board (IASB). Projects affected by these decisions can be found on the work plan. The IASB's final decisions on IFRS® Accounting Standards, Amendments and IFRIC® Interpretations are formally balloted as set out in the IFRS Foundation's Due Process Handbook.
Contents
Research and standard-setting
- Financial Instruments with Characteristics of Equity (Agenda Paper 5)
- Business Combinations—Disclosures, Goodwill and Impairment (Agenda Paper 18)
- Statement of Cash Flows and Related Matters (Agenda Paper 20)
Maintenance and consistent application
- Consistent application activities (Agenda Paper 12)
- Assessing Indicators of Hyperinflationary Economies (Agenda Paper 12A)
- IFRIC Update June 2025 (Agenda Paper 12B)
Strategy and governance
Research and standard-setting
Financial Instruments with Characteristics of Equity (Agenda Paper 5)
The IASB met on 24 July 2025 to continue redeliberating the Exposure Draft Financial Instruments with Characteristics of Equity. The IASB discussed:
- feedback on the proposed requirements related to the effects of relevant laws or regulations and an analysis of this feedback (Agenda Paper 5A); and
- feedback on the proposed requirements related to reclassification of financial liabilities and equity instruments (Agenda Paper 5B).
Detailed feedback and staff analysis—Effects of relevant laws or regulations (Agenda Paper 5A)
The IASB tentatively decided to withdraw the requirements proposed in the Exposure Draft related to the effects of relevant laws or regulations on the classification of financial instruments.
All 13 IASB members agreed with this decision.
Detailed feedback—Reclassification of financial liabilities and equity instruments (Agenda Paper 5B)
The IASB discussed a summary of the feedback on the requirements proposed in the Exposure Draft related to reclassification of financial liabilities and equity instruments.
The IASB was not asked to make any decisions.
Next steps
The IASB will further discuss the proposed reclassification requirements and continue to redeliberate the classification topics in the Exposure Draft.
Business Combinations—Disclosures, Goodwill and Impairment (Agenda Paper 18)
The IASB met on 22 July 2025 to discuss the proposed requirements in the Exposure Draft Business Combinations—Disclosures, Goodwill and Impairment.
Auditability and audit expectations gap (Agenda Paper 18A)
The IASB discussed:
- the auditability of information about a business combination’s performance and expected synergies; and
- the gap between auditors’ ability to verify the reasonableness of this information and users’ expectations.
The IASB was not asked to make decisions on these topics.
Restructuring and asset enhancement cash flows (Agenda Paper 18B)
The IASB discussed its proposal to remove from IAS 36 Impairment of Assets the requirement for an entity to exclude cash flows from uncommitted future restructurings and asset enhancements when calculating value in use.
The IASB was not asked to make decisions on this topic.
Other IAS 36 proposals (Agenda Paper 18C)
The IASB discussed other proposed amendments to IAS 36. The IASB tentatively decided to retain the proposals:
- to require an entity to disclose the reportable segment in which a cash-generating unit or group of cash-generating units containing goodwill is included;
- to remove the requirement for an entity to use pre-tax cash flows and a pre-tax discount rate for calculating value in use; and
- to require an entity to disclose whether the discount rate used in calculating value in use is pre-tax or post-tax.
All 13 IASB members agreed with this decision.
Next step
The IASB will continue redeliberating the proposals in the Exposure Draft.
Statement of Cash Flows and Related Matters (Agenda Paper 20)
The IASB met on 22 July 2025 to discuss how the requirements for management-defined performance measures (MPMs) in IFRS 18 Presentation and Disclosure in Financial Statements could be extended to also apply to cash flow measures. Extending these requirements would respond to stakeholder feedback that users of financial statements need more transparent information about cash flow measures not specified in IFRS Accounting Standards.
The IASB tentatively decided to propose extending the requirements for MPMs in IFRS 18 to also apply to measures relating to the statement of cash flows not specified in IFRS Accounting Standards (cash flow measures). The proposed requirements would apply to cash flow measures, subject to the definition of an MPM and the applicability of the related disclosure requirements.
Twelve of 13 IASB members agreed with this decision.
The IASB tentatively decided to propose:
- applying to cash flow measures, unchanged, the parts of the IFRS 18 definition of an MPM that describe an MPM as a measure that:
- an entity uses in public communications outside financial statements; and
- an entity uses to communicate to users of financial statements management’s view of an aspect of the financial performance of the entity as a whole; and
- extending the rebuttable presumption for MPMs in IFRS 18 so it also applies to cash flow measures.
All 13 IASB members agreed with this decision.
The IASB tentatively decided to propose extending the disclosure objective for MPMs and specific disclosure requirements for MPMs in IFRS 18 to also apply to cash flow measures. The IASB will further consider any drafting changes required when these disclosure requirements are applied to those measures—specifically, the requirements for an entity:
- to disclose information about all measures that meet the definition of MPMs in a single note.
- to disclose that the MPMs provide management’s view of an aspect of the financial performance of the entity as a whole and are not necessarily comparable with measures sharing similar labels or descriptions provided by other entities.
- to label and describe each MPM in a clear and understandable manner that does not mislead users of financial statements.
- to disclose a description of the aspect of financial performance that, in management’s view, is communicated by the MPM. The entity is required to include in this description explanations of why, in management’s view, the MPM provides useful information about the entity’s financial performance.
- to disclose how each MPM is calculated.
- to disclose a reconciliation between the MPM and the most directly comparable subtotal or total specified by IFRS Accounting Standards.
- to disclose information if the entity changes how it calculates an MPM, adds a new MPM or ceases using a previously disclosed MPM—specifically, to disclose:
- an explanation that enables users of financial statements to understand the change, addition or cessation and its effects.
- the reasons for the change, addition or cessation.
- restated comparative information to reflect the change, addition or cessation unless it is impracticable to do so. An entity’s selection of an MPM is not an accounting policy choice. Nonetheless, in assessing whether restating the comparative information is impracticable, an entity is required to apply the requirements in paragraphs 50–53 of IAS 8 Basis of Preparation of Financial Statements.
All 13 IASB members agreed with this decision.
The IASB tentatively decided not to propose extending a requirement for MPMs in IFRS 18 to apply to cash flow measures. Specifically, the IASB tentatively decided not to propose extending the requirement for an entity to disclose the income tax effect and the effect on non-controlling interests for each item disclosed in the reconciliation described in (f).
All 13 IASB members agreed with this decision.
Next step
The IASB will continue to assess potential ways to improve financial reporting in relation to each of the topics included in the project plan.
Maintenance and consistent application
Consistent application activities (Agenda Paper 12)
The IASB met on 22 July 2025:
- to consider an agenda decision discussed at the June 2025 meeting of the IFRS Interpretations Committee (Committee) (Agenda Paper 12A); and
- to receive an update on that meeting (Agenda Paper 12B).
Assessing Indicators of Hyperinflationary Economies (Agenda Paper 12A)
The IASB was asked whether it objected to the Agenda Decision Assessing Indicators of Hyperinflationary Economies (IAS 29 Financial Reporting in Hyperinflationary Economies).
No IASB member objected to the Agenda Decision.
Next step
The Agenda Decision will be published in July 2025 in an addendum to IFRIC Update June 2025.
IFRIC Update June 2025 (Agenda Paper 12B)
The IASB received an update on the Committee’s June 2025 meeting. Details of this meeting were published in IFRIC Update June 2025.
The IASB was not asked to make any decisions.
Strategy and governance
Fourth Agenda Consultation (Agenda Paper 24)
The IASB met on 24 July 2025 to discuss the status and direction of the project.
IASB members expressed support for a concurrent agenda consultation with the ISSB, which involves initiating the process in late 2026 and publishing a request for information in 2027.
Next step
The IASB will decide how to proceed with its Fourth Agenda Consultation at its September 2025 meeting.
