IASB Update December 2025

Work plan overview

IASB work plan update (Agenda Paper 8)

The IASB met on 10 December 2025 to receive an update on its work plan.

The IASB was not asked to make any decisions.

Timing of the post-implementation review of the hedge accounting requirements of IFRS 9 Financial Instruments (Agenda Paper 8A)

The IASB decided it will begin the post-implementation review (PIR) of the hedge accounting requirements in IFRS 9 Financial Instruments in the first quarter of 2026.

All 12 IASB members agreed with this decision.

Next step

The IASB will discuss a project plan for the PIR.

Research and standard-setting

Financial Instruments with Characteristics of Equity (Agenda Paper 5)

The IASB met on 9 December 2025 to continue redeliberating the amendments to IAS 32 Financial Instruments: Presentation proposed in the Exposure Draft Financial Instruments with Characteristics of Equity. The IASB discussed:

• feedback on the proposed requirements related to the classification of derivatives on own equity when entities apply the ‘fixed-for-fixed condition’;
• an analysis of this feedback; and
• potential changes to the proposed requirements in response to the feedback.

The IASB was not asked to make any decisions.

Next step

The IASB will further discuss the proposed classification requirements related to the ‘fixed-for-fixed condition’.

Business Combinations—Disclosures, Goodwill and Impairment (Agenda Paper 18)

The IASB met on 10 December 2025 to continue deliberating feedback on proposals in the Exposure Draft Business Combinations—Disclosures, Goodwill and Impairment related to:

• an exemption from some disclosure requirements relating to performance and expected synergy information; and
• targeted amendments to IAS 36 Impairment of Assets to improve how entities allocate goodwill to cash-generating units.

The IASB was not asked to make any decisions about the proposed exemption.

With respect to the proposed targeted amendments, the IASB tentatively decided:

1. to retain the proposal to replace the phrase ‘goodwill is monitored’ in paragraph 80(a) with ‘business associated with the goodwill is monitored’;
2. to retain the proposal to clarify that paragraph 80(b) acts as a ceiling to the level an entity determines by applying paragraph 80(a);
3. to retain proposed paragraph 80A(b) with some wording changes; and
4. to make no other changes to the proposed amendments.

Eleven of 12 IASB members agreed with the decisions in (a), (c) and (d). All 12 IASB members agreed with the decision in (b).

Statement of Cash Flows and Related Matters (Agenda Paper 20)

The IASB met on 11 December 2025 to discuss:

• outstanding matters related to extending the requirements for management-defined performance measures (MPMs) to include cash flow measures (Agenda Paper 20A);
• improving consistency in classifying cash flows as operating, investing or financing (Agenda Paper 20B); and
• improving consistency in presenting cash flows from continuing and discontinued operations (Agenda Paper 20C).

Improving the transparency of information about cash flow measures (Agenda Paper 20A)

The IASB tentatively decided to propose:

1. including requirements for MPMs for cash flow measures in IFRS 18 Presentation and Disclosure in Financial Statements and not in IAS 7 Statement of Cash Flows. 
   
   Eleven of 12 IASB members agreed with this decision.
   
   
2. extending the definition of MPMs in paragraph 117 of IFRS 18 from ‘a subtotal of income and expenses’ to ‘a subtotal of income and expenses or a subtotal of cash inflows and outflows’.
   
   All 12 IASB members agreed with this decision.
   
   
3. including application guidance in IFRS 18 to clarify that subtotals combining income and expenses and cash flows are MPMs.  
   
   All 12 IASB members agreed with this decision.
   
   
4. including application guidance in IFRS 18 to require an entity to disclose the effects of income tax and non-controlling interest for reconciling items if reconciling an MPM that is a subtotal of income and expenses and cash flows to a subtotal in the statement of profit or loss.
   
   Ten of 12 IASB members agreed with this decision.
   
   
5. specifying that some subtotals of cash inflows and outflows are not MPMs, namely: 
   1. the subtotal of the operating activities category; 
   2. the subtotal of the investing activities category; and 
   3. the subtotal of the financing activities category. 
      
      All 12 IASB members agreed with this decision.
       
6. extending the disclosure requirement in B137(a) so that, for each reconciling item, an entity be required to disclose the amount(s) related to each line item in the statement to which the MPM is reconciled—that is:
   1. to disclose amounts related to line items in the statement of profit or loss if the MPM is reconciled to that statement; and
   2. to disclose amounts related to line items in the statement of cash flows if the MPM is reconciled to that statement.
      
      All 12 IASB members agreed with this decision.
       

The IASB will further research the benefits and costs of applying this disclosure requirement to reconciling items that relate to operating activities in the statement of cash flows when reported using the indirect method.

Classification and presentation of cash flows (Agenda Paper 20B)

The IASB tentatively decided:

1. to explore:  
   1. developing requirements for the classification of acquisition-related payments in a business combination; 
   2. developing requirements for the classification and presentation of cash flows from derivatives; 
   3. developing requirements for the classification and presentation of receipts of government grants; and 
   4. amending the principle for classifying cash flows in paragraph 11 of IAS 7 to help entities apply the principle more consistently; and 
2. to revisit two issues after the IASB has concluded its discussions on strengthening the disclosure requirements on non-cash transactions and other non-cash changes, namely: 
   1. classification of deferred payments; and 
   2. classification and presentation of cash flows involving third-party finance providers. 

All 12 IASB members agreed with this decision.

Presentation of cash flows from continuing and discontinued operations (Agenda Paper 20C)

The IASB tentatively decided to propose requiring an entity to present cash flows from discontinued operations in a separate category of the statement of cash flows.

All 12 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 in the project plan.

Maintenance and consistent application

Amendments to the Fair Value Option (IAS 28) (Agenda Paper 12)

The IASB met on 8 December 2025 to discuss:

• proposed amendments to the scope of the fair value option in IAS 28 Investments in Associates and Joint Ventures (Agenda Paper 12A); and
• due process steps taken to publish an exposure draft (Agenda Paper 12B).

Potential amendments to the scope of the fair value option (IAS 28) (Agenda Paper 12A)

The IASB tentatively decided to clarify, in paragraphs 18–19 of IAS 28, that ‘similar entities’ include entities that invest in associates and joint ventures as a main business activity.

Eight of 12 IASB members agreed with this decision.

The IASB also tentatively decided:

1. not to explore a permission for entities to revoke the fair value option; and
2. to consult on these proposals through an exposure draft.

All 12 IASB members agreed with this decision.

Due process and permission to begin balloting (Agenda Paper 12B)

The IASB discussed the due process steps and decided to set a 60-day comment period for the exposure draft (subject to approval by the Due Process Oversight Committee).

All 12 IASB members agreed with this decision.

All 12 IASB members confirmed they were satisfied the IASB has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting the exposure draft.

Four IASB members indicated an intention to dissent from the proposals in the exposure draft.

Next step

The IASB expects to publish the exposure draft in February 2026.

Provisions—Targeted Improvements (Agenda Paper 22)

The IASB met on 9 December 2025 to redeliberate proposals in the Exposure Draft Provisions—Targeted Improvements relating to the recognition and measurement of provisions, specifically:

• the proposed requirement for an entity to have a present obligation to transfer an economic resource as a result of a past event. The IASB discussed feedback on one of the three conditions within the present obligation criterion, namely the ‘obligation’ condition.
• the proposed clarification of the costs an entity includes in estimating the future expenditure required to settle an obligation.

Recognition—Legal obligations (Agenda Paper 22A)

The IASB discussed aspects of the obligation condition relating to legal obligations.

The IASB tentatively decided to revise the criteria proposed in the Exposure Draft for concluding that an entity has no practical ability to avoid discharging a legal responsibility. The revised criteria would require that either:

1. the counterparty have a right to ask a judicial body to force the entity to discharge the responsibility or to pay a penalty or compensation for failing to do so; or
2. the counterparty have a right to take another form of action against the entity for failing to discharge the responsibility and, as a result, the economic consequences for the entity of not discharging the responsibility are expected to be significantly worse than the costs of discharging it.

All 12 IASB members agreed with this decision.

In reaching this decision, the IASB:

1. tentatively decided that an entity’s practical ability to avoid discharging a responsibility represents a high hurdle.
   
   Ten of 12 IASB members agreed with this decision.
   
   
2. tentatively decided to retain the word ‘significantly’ in the proposal in paragraph 14F of the Exposure Draft.
   
   Eleven of 12 IASB members agreed with this decision.

The IASB also tentatively decided:

1. to add no application guidance on how to assess the economic consequences of failing to discharge a responsibility.
   
   All 12 IASB members agreed with this decision.
   
   
2. to make no changes to the requirements in IAS 37 Provisions, Contingent Liabilities and Contingent Assets that apply to proposed new laws that have yet to be finalised.

Eleven of 12 IASB members agreed with this decision.

Recognition—Constructive obligations (Agenda Paper 22B)

The IASB discussed aspects of the obligation condition relating to constructive obligations.

The IASB tentatively decided:

1. to retain the criterion proposed in the Exposure Draft for concluding that an entity has no practical ability to avoid discharging a constructive responsibility—not to add a reference to the economic consequences of failing to discharge the responsibility.
   
   Eleven of 12 IASB members agreed with this decision.
   
   
2. to add no further guidance on the factors to consider in determining whether an entity’s public statement of its climate-related commitments creates a constructive obligation to fulfil these commitments.
   
   All 12 IASB members agreed with this decision.

Measurement—Costs to include (Agenda Paper 22C)

The IASB tentatively decided:

1. to retain the proposed requirement that the expenditure required to settle an obligation comprise the costs that relate directly to the obligation, which consist of both:
   1. the incremental costs of settling that obligation; and
   2. an allocation of other costs that relate directly to settling obligations of that type.
      
      All 12 IASB members agreed with this decision.
       
2. to restrict the scope of the requirement described in (a) to obligations to transfer goods or services, and to clarify that the requirement applies to the measurement of those goods or services.
   
   Eleven of 12 IASB members agreed with this decision.
   
   
3. not to add a requirement for an entity to disclose whether and how it includes ancillary costs in measuring a provision.
   
   Eleven of 12 IASB members agreed with this decision.
   
   
4. to add no application guidance or illustrative examples on the types of costs to include in measuring a provision.
   
   All 12 IASB members agreed with this decision.

Next step

The IASB will continue redeliberating the proposals in the Exposure Draft.