9 Interpretations Committee Update

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14 May 2026
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21 May 2026 Agenda Paper 9 OFFICIAL - PUBLIC

Executive Summary

Section Description
Project Type Influencing
Project Scope Various
Purpose of the paper This paper provides updates to the Board about the work and decisions of the IFRS Interpretations Committee.
Summary of the Issue As agreed with the Board, the Secretariat monitors requests submitted to the IFRS Interpretations Committee. This paper presents an overview of the topics on the Interpretations Committee’s agenda, categorised as follows:

Topics for discussion
  1. New pipeline items.
  2. Tentative agenda decisions open for comment.
Topics for noting
  1. Finalised agenda decisions for IASB consideration.
  2. Finalised agenda decisions.
  3. Other matters.
Decisions for the Board
  1. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Application of paragraphs 56–57 and 65–66 of IFRS 18? (item I.1 below)
  2. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Performance measures with income and expenses that are hypothetical (IFRS 18)? (item I.2 below)
  3. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Labels of subtotals and matters relating to the presentation of expenses (IFRS 18)? (item I.3 below)
  4. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Scope of ‘public communications’ in the context of confidential investor materials (IFRS 18)? (item I.4 below)
  5. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Assessment of a specified main business activity for a manufacturer-lessor (IFRS 18)? (item I.5 below)
  6. Do Board Members agree that the UKEB will not respond to the Interpretations Committee’s invitation to comment on Reassessment of Control (IFRS 10) (item II.1 below)?
Recommendation The Secretariat recommends that the UKEB should:
  1. continue to monitor the pipeline items (items I.1–I.5 below); and
  2. not respond to the Interpretations Committee’s invitation to comment on Reassessment of Control (IFRS 10) (item II.1 below).
Appendices N/A

Background

1 The UKEB’s Due Process Handbook notes that the UKEB expects to respond to a limited number of tentative agenda decisions published by the IFRS Interpretations Committee (‘Interpretations Committee’ or ‘the Committee’). Some factors to consider when deciding whether to respond may be:

  1. the degree of impact of the tentative agenda decision on UK companies (for example, in cases where the tentative agenda decision is expected to affect a significant number of UK companies);
  2. disagreement with the Interpretations Committee’s analysis; or
  3. usefulness of the explanations and clarifications included in the tentative agenda decision.

2 The Interpretations Committee met on 17 to 18 March 2026.

3 The next Interpretations Committee meeting is on 16 to 17 June 2026.

Overview

4 The rest of this paper is structured as follows:

  1. Section I. New pipeline items.
  2. Section II. Tentative Agenda Decisions: open for comment.
  3. Section III. Finalised agenda decisions for IASB consideration.
  4. Section IV. Finalised agenda decisions.
  5. Section V. Other matters.

Sections I and II include questions for discussion. Sections III–V are for noting.

5 Sections II–V of this paper include topics that the Board has previously considered. Material that has been included in a previous Interpretations Committee Update presented to the Board is shaded.

Section I. New pipeline items

I.1 Application of paragraphs 56–57 and 65–66 of IFRS 18

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status This pipeline item was recently submitted to the Committee and has not yet been included on a Committee agenda.

The next meeting of the Committee is on 16 to 17 June 2026.
Question The submission asks for clarity on four items:

1. Application of paragraph 56(a). This question relates to situations in which an entity or a group has several different main business activities of which some, but not all, are specified main business activities. The submission seeks clarity on whether paragraph 56(a) requires an entity to classify all income and expenses from cash and cash equivalents in the operating category, or just the income and expenses related to the specified main business activity or activities.

2. Application of paragraph 65(a)(ii) in consolidated financial statements. The fact pattern in the submission describes a group with two subsidiaries. Subsidiary 1’s main business activity is manufacturing, Subsidiary 2’s is providing finance to customers. The question concerns paragraph 65(a)(ii), which applies to entities with specified main business activities and offers an accounting policy choice for the classification of income and expenses from certain liabilities. The submission asks whether paragraph 65(a)(ii) applies to Subsidiary 1 in the consolidated financial statements. If so, the submission seeks clarity on whether the accounting policy choice applied to the relevant liabilities held by Subsidiary 1 needs to be consistent with the accounting policy choice applied to the relevant liabilities held by Subsidiary 2.

3. Interaction between paragraph 65(a)(ii) and paragraph 66. The fact pattern in the submission describes an entity with a specified main business activity. The entity has three ‘portions’ of liabilities that arise from transactions that involve only the raising of finance. The entity cannot distinguish whether portion A relates to providing financing to customers or not. Portion B does relate to providing financing to customers. Portion C does not. Applying paragraph 66, income and expenses from liabilities in portion A are classified in the operating category. The submission asks whether paragraph 65(a)(ii) then requires the entity to classify income and expenses from liabilities in portion C in the operating category (to achieve a consistent choice of accounting policy), or whether the entity may apply the accounting policy choice offered by paragraph 65(a)(ii) in respect of the liabilities in portion C and classify the related income and expenses in the financing category.

4. Interaction between paragraphs 56–57 and paragraphs 65–66. This aspect of the submission echoes the issues raised in question (3) above in the context of the interaction of requirements for the classification of income and expenses from cash and cash equivalents and from liabilities. For example, an entity with a specified main business activity might apply paragraph 57 and include income and expenses from cash and cash equivalents in the operating category. The submission seeks clarity on whether the entity may then apply the accounting policy choice permitted by paragraph 65(a)(ii) to classify the income and expenses from certain liabilities in the financing category, or whether this would be deemed an inconsistent choice of accounting policy (per paragraph 56(b)(ii)).
Comment In the Secretariat’s view, this item is likely to be a relatively straightforward question for the Interpretations Committee. This matter has not been raised with the Secretariat as a particular challenge by UK stakeholders.
Recommendation It is recommended that the Secretariat continues to monitor this item. The Secretariat will bring this item back to the Board for further discussion as necessary.

Question for the Board

  1. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Application of paragraphs 56–57 and 65–66 of IFRS 18?

I.2 Performance measures with income and expenses that are hypothetical (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status This pipeline item was recently submitted to the Committee and has not yet been included on a Committee agenda.

The next meeting of the Committee is on 16 to 17 June 2026.
Question The submission asks whether a performance measure could meet the definition of a management-defined performance measure (MPM) if it includes income and/or expenses that are ‘hypothetical’, i.e. income and/or expenses that have not been, and never will be, recognised in the statement of financial performance.

Examples of these include:
  • Annualised rental income minus non-recoverable property expenses (such as service charges and ground rent), where annualised rent is calculated by multiplying the rental income for the last month of the reporting date, as recognised in accordance with IFRS 16 Leases, by twelve months.
  • Net profit adjusted for the estimated effects on income and expenses of a major crisis, such as a pandemic or a global conflict.
  • Pro forma gross profit calculated as if a business combination that actually happened mid-year instead happened at the beginning of the reporting period.

The submission notes that IFRS 18 does not specifically require that income and expenses must be recognised in the statement of profit or loss to be included in an MPM.
Comment In the Secretariat’s view, this item is likely to be a relatively straightforward question for the Interpretations Committee. This matter has not been raised with the Secretariat as a particular challenge by UK stakeholders.
Recommendation It is recommended that the Secretariat continues to monitor this item. The Secretariat will bring this item back to the Board for further discussion as necessary.

Question for the Board

  1. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Performance measures with income and expenses that are hypothetical (IFRS 18)?

I.3 Labels of subtotals and matters relating to the presentation of expenses (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status This pipeline item was recently submitted to the Committee and has not yet been included on a Committee agenda.

The next meeting of the Committee is on 16 to 17 June 2026.
Question The submission asks the Interpretations Committee to clarify three matters related to presentation of the statement of profit or loss:

  • Label and content of subtotals in the Income Statement: Management Performance Measures (MPMs). The submission notes that it is possible to present an MPM as an additional subtotal in the statement of profit or loss and seeks clarity on the labelling of such a subtotal. In particular, clarity is sought on:
    1. whether the label must explicitly name all the elements that are excluded from, or included in, the subtotal; and
    2. whether the use of a label such as “recurring operating profit” or “core operating result” might be permitted.
  • The mixed presentation of operating expenses. The submission seeks clarity on the circumstances in which a ‘mixed’ approach to the classification and presentation of operating expenses may be adopted (i.e. an approach in which some expenses are classified and presented by nature and others by function, applying paragraphs 78 and 79).
  • Different presentation of two expenses of the same nature. With reference to expenses of the same nature, the submission asks whether it is permissible to classify and present the expenses partly by function and partly by nature.
Comment In the Secretariat’s view, this item is likely to be a relatively straightforward question for the Interpretations Committee. This matter has not been raised with the Secretariat as a particular challenge by UK stakeholders.
Recommendation It is recommended that the Secretariat continues to monitor this item. The Secretariat will bring this item back to the Board for further discussion as necessary.

Question for the Board

  1. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Labels of subtotals and matters relating to the presentation of expenses (IFRS 18)?

I.4 Scope of ‘public communications’ in the context of confidential investor materials (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status This pipeline item was recently submitted to the Committee and has not yet been included on a Committee agenda.

The next meeting of the Committee is on 16 to 17 June 2026.
Question The submission notes that paragraph B119 includes investor presentations as an example of public communications outside financial statements. The submission asks whether investor presentations or pitch materials shared strictly with a small number of identifiable shareholders or potential investors under confidentiality arrangements would constitute ‘public communications’.

In the fact pattern presented in the submission to illustrate the question, Entity A is a privately held group whose shareholders include venture capital and private equity firms. As part of its investor relations activities, Entity A prepares presentations for existing shareholders under the shareholder agreement and pitch materials for potential fundraising. These materials are shared confidentially (e.g. with strict non-disclosure agreements) and are not published online, shared with analysts, included in press releases, or otherwise made available to a wider external audience.
Comment In the Secretariat’s view, this item is likely to be a relatively straightforward question for the Interpretations Committee. This matter has not been raised with the Secretariat as a particular challenge by UK stakeholders.
Recommendation It is recommended that the Secretariat continues to monitor this item. The Secretariat will bring this item back to the Board for further discussion as necessary.

Question for the Board

  1. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Scope of ‘public communications’ in the context of confidential investor materials (IFRS 18)?

I.5 Assessment of a specified main business activity for a manufacturer-lessor (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status This pipeline item was recently submitted to the Committee and has not yet been included on a Committee agenda.

The next meeting of the Committee is on 16 to 17 June 2026.
Question The submission concerns the assessment of specified main business activities in the context of a manufacturer-lessor.

In the fact pattern presented in the submission, an entity has two lines of business:
  • Line A – Production of vehicles. After production, the vehicles are either sold, leased out via finance leases or leased out via operating leases.
  • Line B – Service and maintenance.
Each business activity is significant. The entity uses one gross profit-like performance indicator for business line A, one for business line B and one for the combined leasing activities.

The submission notes that:
  • finance lease activities are mentioned as an example of providing financing to customers (paragraph B32(c)); and
  • the term “investing in assets” is not defined in IFRS 18 therefore could apply to assets that are produced then leased out.
The submission asks:
  • Whether operating lease activities of a manufacturer-lessor constitute a specified business activity of either “providing financing to customers” or “investing in assets”.
  • Whether the finance lease activities of a manufacturer-lessor constitute a main business activity under the example of B34 in IFRS 18 if they are monitored together with operating lease activities.
Comment In the Secretariat’s view, this item is likely to be a relatively straightforward question for the Interpretations Committee. This matter has not been raised with the Secretariat as a particular challenge by UK stakeholders.
Recommendation It is recommended that the Secretariat continues to monitor this item. The Secretariat will bring this item back to the Board for further discussion as necessary.

Question for the Board

  1. Do Board Members agree that the Secretariat should continue to monitor the new pipeline item Assessment of a specified main business activity for a manufacturer-lessor (IFRS 18)?

Section II. Tentative Agenda Decisions: open for comment

II.1 Reassessment of Control1 (IFRS 10)

Element Details
Standard IFRS 10 Consolidated Financial Statements
IFRIC status A Tentative Agenda Decision (TAD) was published on 19 March 2026 and is open for comment until 29 May 2026.

Last discussed at the Interpretations Committee meeting in March 2026.
UKEB status Monitoring only.

At its January 2026 meeting the Board agreed that the UKEB will monitor this item without undertaking further work (see paper 9A, item I.2).
Question The submission asks whether an entity that was involved in setting the design and purpose of an investee should reassess whether it retains control over that investee when the governing document of the investee is amended.

A fact pattern is presented in the submission to illustrate the question. The submission asks whether the amendments to the deed of trust require the entity to reassess whether it continues to control the trust.
Interpretations Committee’s tentative conclusion Evidence gathered by the Interpretations Committee (to date) does not indicate diversity in determining whether, in the fact pattern described in the request, the entity reassesses whether it retains control of the investee. Feedback gathered by the Committee suggests that, in that fact pattern, the entity reassesses whether it retains control of the investee.

Based on its findings, the Committee concluded that the matter described in the request does not have widespread effect. Consequently, the Committee tentatively decided not to add a standard-setting project to the work plan, and published a TAD following its meeting in March 2026.
Comment This matter has not been raised with the Secretariat as a particular challenge by UK stakeholders.
Recommendation The Secretariat recommends that the UKEB does not respond to the Interpretation Committee’s invitation to comment.

Question for the Board

  1. Do Board Members agree that the UKEB will not respond to the Interpretations Committee’s invitation to comment on Reassessment of Control (IFRS 10)?

Section III. Finalised agenda decisions for IASB consideration

III.1 Presentation of taxes or other charges that are not income taxes within the scope of IAS 12 Income Taxes (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status Last discussed at the Interpretations Committee meeting in March 2026.

To be discussed at the IASB meeting in May 2026.
UKEB status Monitoring only.

At its November 2025 meeting the Board agreed the UKEB will not respond to the Committee’s invitation to comment on the TAD (see paper 9A, item II.5).
Question At its meeting in October 2025, the IASB asked the Committee to consider a consistent application matter related to the application of IFRS 18 (this was derived from the IASB’s horizon scanning activities). The matter concerns whether an entity applying IFRS 18 is permitted to present taxes or other charges that are not income taxes within the scope of IAS 12 Income Taxes in the:
  • ‘Income tax expense or income’ line item of the income statement required by paragraph 75(a)(iv) of IFRS 18; or
  • ‘Income taxes’ category of the income statement.
The IASB decided to refer this issue for IFRIC’s consideration.
Agenda decision As required by paragraph 67 of IFRS 18, an entity classifies in the income taxes category of the statement of profit or loss tax expense or tax income that is included in the statement of profit or loss applying IAS 12 (and any related foreign exchange differences).

The Committee therefore concluded that, applying IFRS 18, an entity is not permitted to present taxes or other charges that are not income taxes within the scope of IAS 12:
  • in the ‘income tax expense or income’ line item of the statement of profit or loss required by paragraph 75(a)(iv) of IFRS 18; or
  • in the income taxes category of the statement of profit or loss.
The Committee noted that in accordance with paragraph 24 of IFRS 18, an entity presents additional line items and subtotals in a primary financial statement if such presentations are necessary for the statement to provide a useful structured summary. The Committee concluded that the principles and requirements in IFRS Accounting Standards provide an adequate basis for an entity applying IFRS 18 to determine how it presents in the income statement taxes or other charges that are not income taxes within the scope of IAS 12.

Consequently, the Committee tentatively decided not to add a standard setting project to the work plan.
Comment The Interpretations Committee received 49 comment letters, of which 34 came from respondents in Saudi Arabia.

Of the respondents that commented on the Committee’s technical analysis and conclusions, 14 respondents agreed while two expressed concern about the Committee being unduly restrictive in its reading of paragraph 67 of IFRS 18. One respondent disagreed with the Committee’s tentative decision to not add a standard-setting project to the work plan.

Almost all of the other respondents, particularly those from Saudi Arabia, expressed concerns about the outcome of applying the tentative agenda decision to zakat in Saudi Arabia (SA zakat). SA zakat is a non-income tax charge which an entity would—applying the agenda decision—generally classify in the operating category. Respondents commented that classifying SA zakat in the operating category would fail to reflect the economic substance of SA zakat, which in their view, is similar to that of income taxes. The Committee acknowledged the concerns and decided to report these concerns to the IASB.

The IASB will discuss this matter at its meeting on 18–20 May 2026. The Interpretations Committee has provided suggestions as to how the IASB might address the concerns. These include a proposed narrow-scope amendment to IFRS 18 to require or allow an entity to classify particular non-income tax charges that are similar to income taxes in the income taxes category.
Finalisation of the agenda decision At its March 2026 meeting, the Committee decided to finalise this agenda decision with no changes (other than to remove the square brackets indicating the tentative stage of the agenda decision).

Next steps will be determined by the IASB’s decisions on addressing concerns relating to SA zakat:
  • If the IASB decides not to amend IFRS 18 as proposed by the Interpretations Committee, the IASB will be asked whether it objects to the finalised agenda decision and the updates to two related agenda decisions (see item III.2 below).
  • If the IASB decides to add a standard-setting project to explore amending IFRS 18, the Interpretations Committee will present its analysis of the detailed technical aspects of the potential amendments at a future IASB meeting. The IASB will then be asked whether it objects to the finalised agenda decision and the updates to two related agenda decisions at a later date.

III.2 Updates to Committee’s agenda decisions for IFRS 18

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IFRIC status Last discussed at the Interpretations Committee meeting in March 2026.

To be discussed at the IASB meeting in May 2026.
UKEB status Monitoring only.

At its January 2026 meeting the Board agreed the UKEB will not respond to the Committee’s invitation to comment on the updates to the agenda decisions (see paper 9A, item III.1).
Updated agenda decision In November 2025, the Committee decided to update and re-expose for comment two agenda decisions:
  • Presentation of payments on non-income taxes (IAS 1 Presentation of Financial Statements and IAS 12 Income Taxes).
  • Classification of tonnage taxes (IAS 12 Income Taxes).
The Secretariat observes that the amendments to these agenda decisions are not considered substantive. These amendments simply provide additional alignment with the requirements in IFRS 18 and clarity to the wording of the decision without altering its underlying conclusions.
Comment The Interpretations Committee received ten comment letters in response to the TAD. Nine respondents agreed to the updates and provide no additional comments. One respondent agreed subject to some comments.
Finalisation of the agenda decision At its March 2026 meeting, the Committee decided to finalise the updates to the two agenda decisions. As noted above (see item III.1), the next steps on this item will be determined by the IASB’s decisions on addressing concerns relating to SA zakat.

Section IV. Finalised agenda decisions

IV.1 Classification of a Foreign Exchange Difference from an Intragroup Monetary Liability (or Asset) (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IASB status The IASB did not object to the Agenda Decision at its April 2026 meeting so the Agenda Decision has been published as an addendum to the IFRIC Update.
IFRIC status Discussions of this item have now been completed.
UKEB status UKEB Comment Letter submitted (25 Nov 2025)
Question The Interpretations Committee received a submission about the classification of a foreign exchange difference from an intragroup monetary liability (or asset). The request asked how an entity applying paragraph B65 of IFRS 18 classifies a foreign exchange difference if the income and expenses from the intragroup monetary liability (or asset) that gave rise to the foreign exchange difference have been eliminated on consolidation.
Agenda decision The Interpretations Committee considered feedback on the TAD published in September 2025 and concluded its discussions on that agenda decision.

The Committee concluded that there are two views that are reasonable readings of paragraph B65 of IFRS 18:
  • View I—Classify the exchange difference in the operating category as the default category in accordance with paragraph 52 of IFRS 18. The income and expenses arising from the intragroup loan have been eliminated on consolidation and are not presented in the consolidated statement of profit or loss.
  • View II—Classify the exchange difference in the same category in which the income and expenses from the intragroup loan would have been classified before their elimination on consolidation, or, if doing so would involve undue cost or effort, in the operating category.
The Committee considered whether to add a standard-setting project to the work plan and concluded that the expected benefits of a standard-setting project would not outweigh the costs. Consequently, the Committee decided not to add a standard-setting project to the work plan.
Comment The Interpretations Committee received 51 comment letters in response to the TAD. A review of the comment letters is included in Paper 9A, item IV.1 of the January 2026 meeting.

No consensus emerged from the comment letters on whether View I or View II is the ‘preferred’ view.

In its comment letter, the UKEB noted that the TAD was unclear about the status of View II, that including the voting in the TAD was unhelpful and that there was confusion about how the TAD could be interpreted. The UKEB further suggested to either clearly articulate a conclusion on View II or acknowledge that the requirements in relevant IFRS do not provide an adequate basis for an entity to determine whether or not View II is acceptable.

In its discussions, the Interpretations Committee acknowledged comments about the lack of clarity in the TAD. In finalising the agenda decision, the Committee addressed such comments by:
  • providing more detail on the application of View II;
  • including an observation that an entity would develop and apply an accounting policy—that is, View I or View II—in accordance with IAS 8 Basis of Preparation of Financial Statements;
  • removing reference to the Interpretations Committee’s split vote following its initial deliberation of the submission at its September 2025 meeting; and
  • providing more detail on why three alternative views had been rejected.
The Committee’s discussion and feedback on the TAD highlighted potential challenges in applying the requirements in paragraph B65 of IFRS 18 to classify foreign exchange differences that arise from intragroup monetary items. The Committee has since reported on these potential challenges to the IASB2.

IV.2 Economic Benefits from Use of a Battery under an Offtake Arrangement (IFRS 16)

Element Details
Standard IFRS 16 Leases
IASB status The IASB did not object to the Agenda Decision at its April 2026 meeting so the Agenda Decision has been published as an addendum to the IFRIC Update.
IFRIC status Discussions of this item have now been completed.
UKEB status Monitoring only.

At the September 2025 Board meeting, the Board decided it would not respond to the Committee’s invitation to comment.
Question The Interpretations Committee received two submissions about how an entity applies the requirements in paragraph B9(a) of IFRS 16 Leases.

Both submissions note that there are currently diverging accounting treatments regarding Battery Energy Storage System agreements in gross pool electricity markets, where a single customer agrees to utilise 100% of the capacity of the battery, known as a 100% Offtake Agreement.

The submissions relate to how an entity determines whether a customer has the right to obtain substantially all of the economic benefits from use of an identified asset.

For more detail on this question, please refer to item IV.2 in the papers presented to the Board at its January 2026 meeting.
Agenda decision The Interpretations Committee considered feedback on the TAD published in September 2025 and concluded its discussions on that agenda decision.

The Committee observed that, in the fact pattern described in the requests, the economic benefits from use of the battery are derived from its storage capability and capacity; the battery is used to store, and then release, electricity. Therefore, applying paragraph B21 of IFRS 16 to the fact pattern, the Committee concluded that the electricity retailer has the right to obtain substantially all of the economic benefits from use of the battery.

The Committee concluded that the principles and requirements in IFRS Accounting Standards provide an adequate basis for an electricity retailer to determine whether it has the right to obtain substantially all of the economic benefits from use of the battery.

Consequently, the Committee decided not to add a standard-setting project to the work plan.
Comment The Interpretations Committee received 13 comment letters in response to the TAD. Eleven respondents agreed (or did not disagree) with the Committee’s conclusion and tentative decision not to add a standard-setting project to the work plan for the reasons set out in the TAD. One respondent disagreed, while one did not express either agreement or disagreement.

In finalising the agenda decision, the Committee decided to make some minor changes to the wording of the TAD for clarity and to avoid inappropriate application of the agenda decision to other fact patterns.

IV.3 Fair presentation and compliance with IFRS Accounting Standards (IAS 1)

Element Details
Standard IAS 1 Presentation of Financial Statements
IASB status The IASB did not object to the Agenda Decision at its April 2026 meeting so the Agenda Decision has been published as an addendum to the IFRIC Update.
IFRIC status Discussions of this item have now been completed.
UKEB status Monitoring only.

At the November 2025 meeting the Board agreed the UKEB will not respond to the invitation to comment from the Committee.
Question The Interpretations Committee received a submission about the application of the requirements in paragraphs 15–24 of IAS 13.

Paragraph 19 of IAS 14 permits departure from IFRS Accounting Standards only in extremely rare circumstances. The request asks whether an entity applying paragraph 19 of IAS 1 is nonetheless required to comply with the requirement for fair presentation in paragraph 15 of IAS 15.
Agenda decision The Interpretations Committee considered feedback on the TAD published in November 2025 and concluded its discussions on that agenda decision.

Based on its findings, the Committee concluded that the matter described in the request arises infrequently and does not have widespread effect. Consequently, the Committee decided not to add a standard-setting project to the work plan.
Comment The Interpretations Committee received ten comment letters in response to the TAD. Eight respondents agreed with the Committee’s decision not to add a standard-setting project to the work plan for the reasons set out in the TAD. One respondent disagreed, while one did not express either agreement or disagreement.

In finalising the agenda decision, the Committee made no significant changes to the wording of the TAD.

IV.4 Assessment of a specified main business activity for the purposes of the separate financial statements of a parent (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IASB status The IASB did not object to the Agenda Decision at its April 2026 meeting so the Agenda Decision has been published as an addendum to the IFRIC Update.
IFRIC status Discussions of this item have now been completed.
UKEB status Monitoring only.

At its November 2025 meeting the Board agreed the UKEB will not respond to the invitation to comment from the Committee.
Question The Committee received a submission about how a parent applying IFRS 18 assesses whether it has a specified main business activity of investing in unconsolidated subsidiaries.

The fact pattern described in the request refers to an ultimate parent of a large group of entities whose activities are limited to holding investments in subsidiaries, making decisions on the management, acquisition and disposal of those subsidiaries and distributing returns on those investments to shareholders. In its separate financial statements, the parent accounts for its investments in subsidiaries (hereafter referred to as investments in unconsolidated subsidiaries) at cost in accordance with paragraph 10(a) of IAS 27 Separate Financial Statements.

The request asks whether the parent, for the purposes of its separate financial statements, has a specified main business activity of investing in unconsolidated subsidiaries. The outcome of that assessment affects how the parent classifies income and expenses from investments in unconsolidated subsidiaries in its income statement.
Agenda decision The Interpretations Committee considered feedback on the TAD published in November 2025 and concluded its discussions on that agenda decision.

The Committee concluded that in the fact pattern described in the submission, the parent has a specified main business activity of holding and investing in subsidiaries and distributing returns from those investments.

The Committee concluded that the principles and requirements in IFRS 18 provide an adequate basis for the parent described in the request to assess, for the purposes of its separate financial statements, whether it has a specified main business activity of investing in unconsolidated subsidiaries. Consequently, the Committee decided not to add a standard-setting project to the work plan.
Comment The Interpretations Committee received 12 comment letters in response to the TAD. No comment letters were submitted by UK stakeholders. Eight respondents agreed with the Committee’s decision not to add a standard-setting project to the work plan for the reasons set out in the TAD.

In finalising the agenda decision, the Committee made minor amendments to the wording of the TAD to clarify the circumstances in which the agenda decision applies.

IV.5 Scope of the requirement to disclose expenses by nature (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IASB status The IASB did not object to the Agenda Decision at its April 2026 meeting so the Agenda Decision has been published as an addendum to the IFRIC Update.
IFRIC status Discussions of this item have now been completed.
UKEB status Monitoring only.

At its January 2026 meeting the Board agreed the UKEB will not respond to the invitation to comment from the Committee (see paper 9A, item II.4).
Question The Committee received a submission about the scope of the requirements in paragraph 83 of IFRS 18. Paragraph 83 requires an entity that presents in the income statement one or more line items comprising expenses classified by function in the operating category, to also disclose in a single note the total and the amount of the expenses included in each line item for depreciation, amortisation, employee benefits, impairment of non-financial assets (and reversals) and write-down of inventories (and reversals).

The submission seeks to clarify whether the requirement in paragraph 83 of IFRS 18 applies:
  • only to ‘operating expenses’ classified by nature or function listed in paragraph 75(a)(ii) of IFRS 18, or
  • to all line items listed in paragraph 75 of IFRS 18, including expenses listed in paragraph 75(b)–(c) of IFRS 18. These expenses might include amounts that resulted from the release to the income statement of costs that were previously capitalised—for example, insurance service expense recognised in the income statement might include the amortisation of insurance acquisition costs that were previously capitalised as part of insurance contract asset.
Agenda decision The Committee noted that paragraph 83 of IFRS 18 does not contain any exceptions. This means that the reason an entity classifies an expense by function does not affect whether paragraph 83 must be applied. This includes expenses listed in paragraphs 75(b)–(c) of IFRS 18, provided those expenses are classified by function.

The Committee concluded that the principles and requirements in IFRS 18 provide an adequate basis for an entity to determine the scope of the requirements in paragraph 83 of IFRS 18. Consequently, the Committee tentatively decided not to add a standard-setting project to the work plan.
Comment The Interpretations Committee received 17 comment letters in response to the TAD. No comment letters were submitted by UK stakeholders. Thirteen respondents agreed with the Committee’s decision not to add a standard-setting project to the work plan for the reasons set out in the TAD.

In finalising the agenda decision, the Committee made minor amendments to clarify the TAD and to cross refer to a relevant illustrative example.

IV.6 Classification of gains and losses on a derivative managing a foreign currency exposure (IFRS 18)

Element Details
Standard IFRS 18 Presentation and Disclosure in Financial Statements
IASB status The IASB did not object to the Agenda Decision at its April 2026 meeting so the Agenda Decision has been published as an addendum to the IFRIC Update.
IFRIC status Discussions of this item have now been completed.
UKEB status Monitoring only.

At its January 2026 meeting the Board agreed the UKEB will not respond to the Committee’s invitation to comment on the TAD (see paper 9A, item II.2).
Question The submission to the Committee asked for clarification about how an entity applies the requirements in paragraphs B70–B76 of IFRS 18 to classify gains or losses on a derivative financial instrument in its consolidated statement of profit or loss.

Further details of the question in this submission are provided in a paper presented to the Board at its January 2026 meeting.

The request asks how the entity classifies any gain or loss arising from the derivative.
Agenda decision In the fact pattern described in the request, the Committee noted that the external derivative is used solely to manage the net liability foreign currency exposure. This exposure affects only one category of the consolidated statement of profit or loss—the financing category. Because of this, classifying gains or losses on the external derivative in the financing category would not require the grossing up of such gains or losses. Therefore, the prohibition in paragraph B72 of IFRS 18 does not apply.

As a result, the Committee concluded that the entity must classify any gain or loss on the external derivative in the same category as the income and expenses affected by the risks the derivative is used to manage. In the fact pattern described in the request, the gains or losses are classified in the financing category of the consolidated statement of profit or loss.

The Committee concluded that the principles and requirements in IFRS Accounting Standards provide an adequate basis for the classification and consequently decided not to add a standard-setting project to the work plan.
Comment The Interpretations Committee received 20 comment letters in response to the TAD. Nineteen respondents agreed with the Committee’s decision not to add a standard-setting project to the work plan for the reasons set out in the TAD.

The Committee finalised the agenda decision with no changes (other than to remove the square brackets indicating the tentative stage of the agenda decision).

Section V. Other matters

V.1 Control assessment for a single-investor fund (IFRS 10)

Element Details
Standard IFRS 10 Consolidated Financial Statements
IFRIC status Discussed at the March 2026 meeting.

Tentative agenda decision delayed to the May 2026 meeting pending additional outreach information.
UKEB status Monitoring only.

At its January 2026 meeting the Board agreed the UKEB will not undertake substantive work on this issue (see paper 9A, item I.1).
Question The submission asks how an entity, that is the sole investor in a fund, assesses whether it has control over the fund.

The fund described in the submission:
  1. Is managed by a fund manager (i.e. the general partner or GP): The GP has extensive decision-making authority to direct the relevant activities of the fund. The GP receives a market-based fee for its services, and the fee is commensurate with the services provided. The GP also has a 0.01% investment in the fund.
  2. Has only one other investor, namely the entity (99.99% investment) - It has no ability to remove or replace the fund manager except for cause (e.g. breach of contract, wilful misconduct or gross negligence).
  3. Has a contractual fixed term - The entity cannot withdraw its investment during the contractual life, but it can sell its investment to another party.

The submission asks whether in applying IFRS 10 the fund manager is automatically deemed to act as an agent for the entity and, consequently, the entity is assessed as controlling the fund.
Summary of discussion Prior to the meeting, IASB staff sent an information request to members of the International Forum of Accounting Standard Setters, securities regulators and large accounting firms, and made the submission available online.

In the meeting, it was observed that it was not always clear if respondents to the information request were referring to the prevalence of fixed-term and single-investor funds more generally or to fixed-term and single-investor funds of the type described in the submission. It was also not clear if respondents were aware of the assumption in the scenario that the GP (fund manager) is an agent and does not control the fund.

The Committee decided to continue discussions on the matter at a future meeting. This is to allow the IASB staff to reach out to respondents of the information request to clarify some of the responses.

Footnotes

  1. Previously referred to as ‘Reassessment of relevant activities’ in previous editions. ↩

  2. Paragraph 19 of Staff paper 12A presented to the IASB at the April 2026 Board meeting. ↩

  3. On issuance of IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, paragraphs 15–24 of IAS 1 have been carried forward unchanged as paragraphs 6A–6J of IAS 8 Basis of Preparation of Financial Statements. ↩

  4. To be carried forward as paragraph 6E of IAS 8. ↩

  5. To be carried forward as paragraph 6A of IAS 8. ↩