The Committee publishes an agenda decision when, following consultation, it concludes that a standard-setting project should not be added to the work plan to address a question received about the application of IFRS Accounting Standards.

Agenda decisions report the Committee’s decision and, in many cases, also include material that explains how the applicable principles and requirements in IFRS Accounting Standards apply to the transaction or fact pattern described in the agenda decision.

This compilation of the Committee includes three agenda decisions, none of which will result in a standard-setting project.

TLTRO III Transactions
(IFRS 9 Financial Instruments and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance)

Question:

How to account for the third programme of the targeted longer-term refinancing operations (TLTROs) of the European Central Bank (ECB)?

Conclusion of the Committee:

IAS 20 provides an adequate basis for the bank to assess whether TLTRO III tranches contain a portion that is treated as a government grant in IAS 20 and, if so, how to account for that portion.

Regarding the question of how conditionality related to the contractual interest rate is reflected in the estimates of expected future cash flows when calculating the effective interest rate at initial recognition or in the revisions of estimated future cash flows on subsequent measurement of the financial liability, the Committee concluded that the IASB should consider this matter as part of the post-implementation review of the classification and measurement requirements in IFRS 9.

Economic Benefits from the Use of a Windfarm
(IFRS 16 Leases)

Question:

Does an electricity retailer have the right to obtain substantially all the economic benefits from the use of a windfarm throughout the term of an agreement with a windfarm generator (supplier)?

Conclusion of the Committee:

In the fact pattern described in the request, the retailer does not have the right to obtain substantially all the economic benefits from the use of the windfarm. Consequently, the agreement does not contain a lease.

Demand Deposits with Restrictions on Use arising from a Contract with a Third Party
(IAS 7 Statement of Cash Flows)

Question:

Does an entity include a demand deposit as a component of cash and cash equivalents in its statements of cash flows and financial position when the demand deposit is subject to contractual restrictions on use agreed with a third party?

Conclusion of the Committee:

Restrictions on the use of a demand deposit arising from a contract with a third party do not result in the deposit any longer being cash, unless those restrictions change the nature of the deposit in a way that it would no longer meet the definition of cash in IAS 7. Therefore, the entity includes the demand deposit as a component of ‘cash and cash equivalents’ in its statement of cash flows.

Source: Compilation of Agenda Decisions – volume 6