Final Comment Letter - IFRS Interpretations Committee - TAD (or Asset) (IFRS 18)

Bruce Mackenzie Chair IFRS Interpretations Committee Columbus Building 7 Westferry Circus Canary Wharf London E14 4HD

25 November 2025

Dear Mr Mackenzie

Invitation to comment: Tentative Agenda Decision: Classification of a Foreign Exchange Difference from an Intragroup Monetary Liability (or Asset) (IFRS 18)

1The UK Endorsement Board (UKEB) welcomes the opportunity to provide comment on the IFRS Interpretations Committee's (the Committee) Tentative Agenda Decision (TAD): Classification of a Foreign Exchange Difference from an Intragroup Monetary Liability (or Asset) (IFRS 18). In developing this letter, we have consulted with stakeholders in the UK, including preparers, accounting firms and institutes.

2The UKEB responds to the Committee's TADs in limited circumstances, taking into consideration factors such as the degree of impact on UK companies, disagreement with the analysis or the usefulness of the explanations and clarifications. We are responding to this TAD in view of its impact on UK companies and the usefulness of the explanations and clarifications included in the TAD.

3The response to the TAD is separate from the UKEB's assessment of whether to adopt IFRS 18 Presentation and Disclosure in Financial Statements for use in the UK.

4We support the Committee's conclusion that View I¹ presented in the TAD is a reasonable reading of paragraph B65 of IFRS 18. We also support the Committee's conclusion that the three views it rejected are not reasonable readings of the requirements in IFRS 18 paragraph B65. We suggest that this conclusion, and the reasons for it, might be more clearly articulated.

5However, we observe that the TAD as currently drafted is unclear about the status of View II². We believe that including the voting numbers in the TAD is unhelpful, and that there is confusion about how the TAD could be interpreted. We suggest that the TAD needs to either:

1. clearly articulate a conclusion on View II; or
2. acknowledge that the requirements in relevant IFRS Accounting Standards (likely other than IFRS 18) do not provide an adequate basis for an entity to determine whether or not View II is acceptable.

6That being said, the UKEB agrees that, on balance, a standard setting project should not be added to the work plan at this stage of the transition to IFRS 18, as any potential benefit is unlikely to outweigh the cost. However, we recommend that the explanatory material in the final agenda decision clearly explains the Committee's basis for its decision.

7If you have any questions about this response, please contact the project team at [email protected].

Yours sincerely

Paul Lee Chair UK Endorsement Board

About the UKEB

The UK Endorsement Board is responsible for endorsement and adoption of IFRS Accounting Standards for use in the UK and therefore is the UK's National Standard Setter for IFRS Accounting Standards. The UKEB also leads the UK's engagement with the IFRS Foundation on the development of new standards, amendments and interpretations.

About IFRS in the UK

There are currently approximately 1,300 entities with equity listed on the London Stock Exchange that prepare their financial statements in accordance with IFRS.³ In addition, UK law allows unlisted companies the option to use IFRS and approximately 14,000 such companies currently take up this option.⁴

About this letter

This letter is intended to contribute to the Foundation's due process. The views expressed by the UKEB in this letter are separate from, and will not necessarily affect the conclusions in, any endorsement and adoption assessment on new or amended international accounting standards undertaken by the UKEB.

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