How the IFRS Interpretations Committee helps support consistent application


The IFRS Interpretations Committee (Interpretations Committee) works together with the International Accounting Standards Board (Board) in supporting the consistent application of IFRS® Standards. The Board and Interpretations Committee seek to achieve a balance between maintaining the principle-based nature of the Standards and adding or changing requirements in response to emerging application questions.

Interpretations Committee process

Interpretations Committee projects typically begin as an application question submitted for consideration. The process is designed to:

  • allow any stakeholder to submit a question for consideration (see ‘Submit an enquiry to the Interpretations Committee’ below); and
  • be transparent—all eligible application questions are considered at a public meeting.

The Interpretations Committee then decides whether a standard-setting project should be added to the work plan to address the question submitted. The Interpretations Committee may decide not to do so if it concludes that standard-setting would be:

  • unnecessary—typically because, in the Interpretations Committee’s view, IFRS Standards provide an adequate basis for a company to determine the required accounting or because there is no evidence that a widespread financial reporting problem exists; or
  • not sufficiently narrow in scope—the question could be resolved only as part of a larger Board project (not a narrow-scope project).

To explain why a standard-setting project is not added, the Interpretations Committee publishes an agenda decision. Agenda decisions report the Interpretations Committee’s decision and, in many cases, also include explanatory material.

The following diagram summarises the criteria the Interpretations Committee considers when deciding whether a standard-setting project should be added to the work plan: 

IFRIC-decision

Explanatory material in an agenda decision

Agenda decisions often include explanatory material. The objective of including such explanatory material is to improve the consistency of application of IFRS Standards.

Agenda decisions (including any explanatory material contained within them) cannot add or change requirements in IFRS Standards. Instead, explanatory material explains how the applicable principles and requirements in IFRS Standards apply to the transaction or fact pattern described in the agenda decision.

Explanatory material derives its authority from the Standards themselves. Accordingly, a company is required to apply the applicable IFRS Standard(s), reflecting the explanatory material in an agenda decision (subject to it having sufficient time to implement that accounting).

Explanatory material included as part of a tentative agenda decision is subject to comment. The comment period is normally 60 days. After considering comments received, the Interpretations Committee decide whether to confirm its decision and publish an agenda decision (subject to the Board not objecting). An agenda decision is published if no more than three Board members object to its publication.

Agenda decisions published by the Interpretations Committee can be found here.

Narrow-scope standard-setting

Some questions result in narrow-scope standard-setting that follows the applicable due process. The Interpretations Committee may decide to:

  • develop an IFRIC Interpretation, which adds requirements to IFRS Standards but does not remove or replace any requirements in the Standards; or
  • recommend that the Board develop a narrow-scope amendment to a Standard.

Narrow-scope standard-setting projects recommended by the Interpretations Committee and approved by the Board are added to the work plan as maintenance projects.

 

An agenda decision explains why a standard-setting project has not been added to the work plan and, in many cases, includes explanatory material. The objective of including such explanatory material is to improve the consistency of application of IFRS Standards.

Agenda decisions (including any explanatory material contained within them) cannot add or change requirements in IFRS Standards. Instead, explanatory material explains how the applicable principles and requirements in IFRS Standards apply to the transaction or fact pattern described in the agenda decision.

Explanatory material derives its authority from the Standards themselves. Accordingly, an entity is required to apply the applicable IFRS Standard(s), reflecting the explanatory material in an agenda decision (subject to it having sufficient time to implement that accounting).

Compilations of agenda decisions

Compilations of agenda decisions compile all agenda decisions published by the Interpretations Committee in a particular period. 

Agenda decisions by date

Agenda decisions published by the Interpretations Committee and included in the annotated Standards are listed below. If you would prefer to see agenda decisions listed by relevant Standards, click here.

Educational materials

The following is a list of recently published educational materials related to the work of the Interpretations Committee:

Interpretations Committee podcasts

Every quarter, the IFRS Foundation produces a podcast that focuses on the work undertaken by the International Accounting Standards Board and the IFRS Interpretations Committee to support consistent application of IFRS Standards. These podcasts report on discussions at meetings of the Interpretations Committee and provide an overview of other relevant activities in the period. They feature Sue Lloyd, vice-chair of the Board and chair of the Interpretations Committee, in discussion with a technical staff member. Click here to listen to the IFRIC podcasts.

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