Tentative decisions

Rate-Regulated Activities (Regulatory Assets and Regulatory Liabilities) — The IASB tentatively decided to require entities to recognise inflation adjustments to the regulatory capital base in profit or loss as they are included in regulatory depreciation, without classifying them as timing or measurement differences, and without adding specific disclosure requirements (11–12 members agreed).

Rate-Regulated Activities (Recognition Conditions) — The IASB tentatively decided to define a "direct relationship" between regulatory capital base and underlying items by an entity's ability to track compensation through regulatory depreciation, establish specific indicators (alignment of asset classifications and depreciation methods with IFRS), and require reassessment when facts or circumstances change, with mandatory disclosure of any change (all 12 members agreed).

Equity Method (Acquisition-Related Costs) — The IASB tentatively decided to require acquisition-related costs to obtain significant influence or joint control, and costs to purchase additional ownership interests, to be recognised immediately as expenses in profit or loss (10–12 members agreed), with prospective application from the transition date (all 12 members agreed).

Statement of Cash Flows and Related Matters — The IASB tentatively decided to develop requirements specifying disclosure of non-cash transactions per IAS 7 paragraphs 43–44, non-cash changes in working capital components, and reconciliation of cash flows with financing activity line items (all 12 members agreed).

Active projects

Rate-Regulated Activities — The IASB continues the formal balloting process for the prospective Accounting Standard on Regulatory Assets and Regulatory Liabilities following October decisions on inflation adjustments and recognition conditions.

Equity Method (IAS 28 Revised) — Redeliberation ongoing; the Board decided to undertake further work on full gain/loss recognition for associate and joint venture transactions to address earnings management concerns and explore enhanced disclosures or guidance before finalising proposals.

Business Combinations—Disclosures, Goodwill and Impairment — Redeliberation of the Exposure Draft continues; no decisions were requested in October; the Board continues assessing feedback on performance and synergy information.

Statement of Cash Flows — The Board will continue assessing ways to improve financial reporting on each topic (non-cash transactions, working capital changes, and financing activity reconciliations).

Fair Value Option for Investments in Associates and Joint Ventures — A new maintenance project was added to the work plan to explore narrow-scope amendments to IAS 28 paragraphs 18–19; tentative project plan and amendment options to be discussed.

Presentation of Non-income Taxes (IFRS 18) — The IFRS Interpretations Committee will consider whether entities may present non-income taxes in the 'income tax expense or income' line item under IFRS 18 (11 members supported referral).

Provisions—Targeted Improvements — Redeliberation of the Exposure Draft continued; specific outcomes not yet published.

What it means for preparers

• Inflation adjustments in rate-regulated businesses — If you operate under a regulatory regime, expect immediate profit or loss recognition of inflation adjustments tied to regulatory depreciation; no longer defer or classify as timing/measurement differences. Begin mapping your regulatory capital base to depreciation schedules and prepare reconciliation disclosures demonstrating the direct relationship between regulatory and IFRS asset classifications.

• Acquisition costs for associates and joint ventures — Acquisition-related costs to gain significant influence or purchase additional ownership stakes must now be expensed in the period incurred, not capitalised. Review your investment policies and M&A accounting procedures; prospective application means no restatement of prior periods, but ensure transition-date entries are correctly recorded.

• Cash flow and non-cash disclosure enhancements — Prepare for expanded disclosure requirements on non-cash transactions (IAS 7 scope items), working capital changes, and financing activity reconciliations. Improve your systems' ability to track and classify these items separately; draft disclosures now to understand the operational impact.

Standards in scope

• IAS 7 — Statement of Cash Flows (non-cash transaction disclosure)
• IAS 12 — Income Taxes (reference in non-income tax presentation discussion)
• IAS 28 — Investments in Associates and Joint Ventures (equity method, fair value option scope, acquisition-related costs)
• IFRS 18 — Presentation and Disclosure in Financial Statements (non-income tax presentation)
• Prospective Accounting Standard — Regulatory Assets and Regulatory Liabilities (new rate-regulated standard, inflation adjustments, recognition conditions)