The IFRS Interpretations Committee (the “Committee”) is an interpretative body of the International Accounting Standards Board (the “IASB”) which works with the Board in supporting the application of IFRS Standards. 

Agenda decisions are a way of making a statement about why a change of an IFRS Standard requirement or an interpretation of that requirement is unnecessary. They often include explanatory information that is intended to provide guidance for the consistent application of IFRS Standards. The Board expects entities to implement accounting policy changes in a timely manner if their policies are inconsistent with an agenda decision.  

Compilation of Agenda Decisions—Volume 12 contains a total of four agenda decisions, the summaries of which we provide below. The full text of these Agenda Decisions can be found here. 

Guarantees Issued on Obligations of Other Entities 

(IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers, IFRS 17 Insurance Contracts and IAS 37 Provisions, Contingent Liabilities and Contingent Assets) 

Published in April 2025 

The IFRS Interpretations Committee addressed how entities should account for guarantees issued on the obligations of other entities, such as joint ventures, associates, or subsidiaries. The Committee reviewed fact patterns involving guarantees issued in separate financial statements, where the entity promises to make payments if the guaranteed party fails to meet contractual obligations. 

The Committee clarified that IFRS Accounting Standards do not define “guarantees,” nor is there a single standard that applies to all guarantees. Instead, entities must assess the specific terms and conditions of each guarantee and use judgement to determine the applicable standard. The potential standards include: 

• IFRS 9 for financial guarantee contracts, although there is diversity in interpreting key terms like “debt instrument.” 

• IFRS 17 for insurance contracts, if the guarantee involves significant insurance risk. 

• IFRS 15 if the guarantee relates to a revenue contract with a customer. 

• IAS 37 for provisions, contingent liabilities, or assets not covered by other standards. 

The Committee concluded that current IFRS standards provide a sufficient basis for accounting for issued guarantees. It emphasised the need for entities to exercise judgement based on the facts and circumstances of each guarantee and decided not to add a new standard-setting project. The IASB will consider addressing the interpretation of “debt instrument” in future agenda consultations. 

Recognition of Revenue from Tuition Fees 

(IFRS 15 Revenue from Contracts with Customers) 

Published in April 2025 

The Committee reviewed a request about how educational institutions should recognise revenue from tuition fees under IFRS 15. The fact pattern involved a typical academic year lasting 10 months, with a 2-month summer break during which staff engage in various non-teaching activities or take holidays. 

The core question was whether tuition revenue should be recognised evenly over the 10-month academic year, the full 12-month reporting period, or another time frame. 

The Committee found no diversity in practice and determined that any differences in revenue recognition periods result from specific facts and circumstances, not from inconsistent application of IFRS 15. Therefore, the Committee concluded that existing guidance is sufficient and decided not to pursue further standard-setting on this issue. 

Classification of Cash Flows related to Variation Margin Calls on ‘Collateralised-to-Market’ Contracts  

(IAS 7 Statement of Cash Flows) 

Published in February 2025 

The Committee received a request about how an entity presents, in its statement of cash flows, the cash flows related to variation margin call payments made on contracts to purchase or sell commodities at a predetermined price and at a specified time in the future.  

The contracts may be used for various purposes, such as hedging, trading, or commodity procurement. Such a contract typically has a maturity of up to three years, can be settled physically or net in cash and are typically centrally cleared and ’collateralised to market’, i.e. during the life of the contract, the counterparties make or receive daily payments based on the fluctuations of the fair value of the contract (variation margin call payments).  

The Committee found that the issue is not widespread in practice and that no significant diversity in treatment was evident. As a result, the Committee concluded that existing IFRS guidance is sufficient and decided not to pursue any standard-setting on the matter. 

Recognition of Intangible Assets from Climate-related Expenditure  

(IAS 38 Intangible Assets)  

Published in April 2025 

The Committee reviewed a request about whether entity’s acquisitions of carbon credits and expenditure on research and development activities related to an entity’s climate-related initiatives should be recognised as intangible assets under IAS 38. The entity had committed to reducing its carbon emissions by 2030 and had taken steps like creating a transition plan, purchasing carbon credits, and investing in innovation programs aimed at emissions reduction. 

The Committee did not consider the question about the accounting for acquisitions of carbon credits separately from the IASB’s research on pollutant pricing mechanisms (PPMs.) The Committee instead considered only the question about the accounting for expenditure on research activities and development activities and found no significant diversity in practice. The Committee concluded that the issue does not have widespread effect and decided not to add a standard-setting project to the work plan, though it noted the IASB’s ongoing research into pollutant pricing mechanisms. 

Sources: Compilation of Agenda Decisions (Volume 12)