IFRS Interpretations Committee

The diagram below provides a summary of the Committee process when responding to questions received. 

When preparing NZ IFRS compliant financial statements, consideration should be given to applicable explanatory material in agenda decisions. 

If the Committee decides not to add a standard-setting project to the IASB’s work plan, then it issues an ‘agenda decision’ that explains why and often outlines how to apply the principles and requirements of IFRS Accounting Standards to the questions received by the Committee.

Agenda decisions cannot add or change requirements in IFRS Accounting Standards, but rather aim to improve consistency in their application. The explanatory material in an agenda decision derives its authority from IFRS Accounting Standards and often provides additional insights on how to apply them. Therefore, to be able to assert compliance with IFRS Accounting Standards, entities are expected to change their accounting policy to the extent that their accounting differs from that described in the agenda decision.

Agenda decisions do not have an effective date or any transition provisions because they do not change any principles or requirements in existing accounting standards. They are expected to be applied as soon as possible and any required accounting policy changes are expected to be applied retrospectively. 

Implementing agenda decisions may sometimes be difficult – especially when an agenda decision is issued near a reporting date and requires a change to an entity’s existing accounting policies. This is because effecting an accounting policy change may require entities to undertake a number of steps, such as collecting additional information to apply the new policy or provide disclosures, or changing processes
or systems.

The IASB has confirmed that an entity is entitled to sufficient time to determine whether to change an accounting policy as a result of an agenda decision and to implement any such change. Determining ’sufficient time’ will require the application of professional judgement, based on facts and circumstances specific to the entity.