Tentative decisions

Post-implementation Review of IFRS 16 Leases — The IASB tentatively decided to add a research project to explore whether it is feasible to mitigate higher-than-expected ongoing costs for lessees applying IFRS 16 measurement requirements without significantly harming the usefulness of lease-related financial information. This project will examine cost-reduction opportunities for remeasurements of the lease liability and discount rate determinations. The Board rejected requests for targeted improvements to disclosure requirements or additional guidance on lease term and discount rate judgements.

Equity Method of Accounting (IAS 28) — The IASB tentatively decided to retain the proposal requiring investors that retain significant influence over an associate when ownership interest changes to apply paragraphs 30–31 of the Exposure Draft to increases (as if purchasing an additional interest) and paragraphs 32–33 to decreases (as if disposing of an interest). The Board also tentatively decided to provide relief from fair value measurement requirements when purchasing an additional ownership interest, permitting alternative measures where effects would not be material, though specific alternative measures are not prescribed.

Active projects

IFRS 16 Post-implementation Review — The Board is in the research phase; it will continue deliberating other feedback from the Request for Information and determine whether to take further action on remaining stakeholder concerns.

Equity Method (IAS 28 Investments in Associates and Joint Ventures) — The Board is in redeliberation of the Exposure Draft proposals; the next step is to continue redeliberating all outstanding proposals in the ED.

IASB Work Plan Update — A quarterly monitoring activity; the Board expects to receive its next update in three to four months with no decisions required at this time.

What it means for preparers

• IFRS 16 users should monitor the research project on cost mitigation. The Board has acknowledged that ongoing remeasurement and discount rate calculations create operational burden for lessees and will formally explore streamlining these processes. Finance teams should document their current cost drivers and prepare to participate in stakeholder consultation during the research phase.

• Equity Method adopters preparing for IAS 28 revision should prepare for the relief provision on additional ownership interest acquisitions. The final standard will permit relief from fair value measurement of identifiable assets and liabilities when materiality is not affected. Develop materiality thresholds and track the factors the Board will identify for eligibility assessment.

• No enhanced disclosure requirements on lease judgement are forthcoming under IFRS 16. The Board rejected calls for specific disclosures about lease term and discount rate assumptions. Current IFRS 16 disclosure requirements remain stable; finance teams need not anticipate expanded footnote obligations in the short term.

Standards in scope

• IFRS 16 Leases
• IAS 28 Investments in Associates and Joint Ventures
• IFRIC guidance (referenced in context of lease accounting consistency)