5. February 2024

ASCG comment letter on tentative agenda decisions taken by the IFRS IC in November 2023

Today, the ASCG has submitted its comment letter on the two tentative agenda decisions (TAD) taken by the IFRS Interpretations Committee in its November 2023 meeting.

As regards the TAD on IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Climate-related Commitments), we concur with the IFRS IC’s overall conclusion that the respective principles and requirements under IFRS are sufficiently clear and, thus, no standard-setting activities are required. IAS 37 provides an adequate basis for an entity to determine the circumstances in which an entity recognises a provision for the costs of fulfilling a commitment to reduce or off-set its greenhouse gas emissions; and if a provision is recognised, whether the costs are recognised as an expense or as an asset when the provision is recognised.

In respect of the TAD on IFRS 8 Operating Segments (Disclosure of Revenues and Expenses for Reportable Segments), we are not clear about how to read the IFRS IC’s technical conclusions nor are we convinced that an agenda decision would effectively improve current practice and/or reduce divergence. In particular with regard to the TAD’s final conclusion that, in applying IFRS 8.23(f), an entity should consider “an item of income and expense for disclosure without regard to whether that item is presented or disclosed applying a requirement in IFRS Accounting Standards other than paragraph 97 of IAS 1”, the wording leaves room for interpretation about disclosure requirements for those other specified amounts.