2025 IFRS® Interpretations Committee Agenda Decisions
A summary of 2025 IFRIC activity and comparison to US GAAP.
From the IFRS Institute – December 5, 2025
Authors: Valerie Boissou, Jeswin John
The Agenda Decisions of the IFRS Interpretations Committee (the Committee) play a key role in forming accounting positions under IFRS® Accounting Standards. So far in 2025, four Agenda Decisions have become effective after being approved by the International Accounting Standards Board (IASB). They address the following topics: cash flow classification of variation margin calls, guarantees issued, recognition of revenue from tuition fees, recognition of intangible assets resulting from climate-related expenditure, and indicators of hyperinflationary economies. In this article, we summarize these Agenda Decisions and shed light on how they compare to US GAAP.
What are the Committee Agenda Decisions?
The Committee is the interpretive body of the IASB. It supports consistent application of IFRS Accounting Standards and improves financial reporting through the timely resolution of financial reporting issues. When presented with an application issue, the Committee often concludes that no standard-setting is needed, but through its Agenda Decisions it explains its rationale and provides key interpretive guidance for companies to use as they apply IFRS Accounting Standards. Agenda Decisions are only finalized if the IASB does not object to them, at which point companies need to apply them on a timely basis, because no transition mechanism is provided.
This article focuses on Agenda Decisions have been finalized by the Committee and approved by the IASB in 2025 and become relevant to financial reporting this year.
For a refresher on 2024 Agenda Decisions, read KPMG IFRS Perspectives article here.
In 2025, the Committee also worked on many other issues that are expected to be finalized as Agenda Decisions in 2026. In particular, the Committee started fielding questions related to the implementation of IFRS 18, the new standard on presentation of financial statements that becomes effective in 2027. For details about IFRS 18, read KPMG IFRS Perspectives article How companies communicate financial performance is changing. Click here for details about other application questions before the Committee.
Statement of cash flows (IAS 7)
How does an entity present variation margin call payments made on contracts to purchase or sell commodities in its statement of cash flows? Full text available here1 |
Fact pattern discussed by the CommitteeAn entity enters a contract to purchase or sell commodities at a predetermined price and at a specified time in the future. The entity may enter into such a contract for different purposes and applies the relevant requirements in IFRS Accounting Standards accordingly. Such a contract typically has a maturity of up to three years, can be settled physically or net in cash and is both:
The Committee considered whether the cash flows related to variation margin call payments should be presented as cash flows from operating activities or other than operating activities. Evidence gathered by the Committee did not indicate that the matter described in the fact pattern is widespread. Therefore, the Committee decided not to add this matter to its standard-setting agenda. |
Comparison to US GAAPUS GAAP does not address the classification of variation margin call payments. We believe an entity can classify variation margin cash flows on collateralized-to-market or settled-to-market derivatives consistent with the derivative settlement cash flows or alternatively classify them based on whether the collateral account is in an asset position (as cash flows from investing activities) or a liability position (as cash flows from financing activities). Read Questions 13.4.50 and 13.4.60 in KPMG Handbook, Statement of cash flows, for more guidance. |
Financial instruments (IFRS 9)
How does an entity, in its separate financial statements, account for guarantees it issues on obligations of a joint venture? Full text available here1 |
Fact pattern discussed by the CommitteeAn entity issues several types of contractual guarantees on obligations of a joint venture. For example, the entity guarantees to make payments to a bank, a customer or another third party in the event the joint venture fails to meet its contractual obligations under its service contracts or partnership agreements and fails to make payments when due. The question asked whether the guarantees issued are financial guarantee contracts to be accounted for under IFRS 9 and, if not, which other IFRS Accounting Standard applies. Analysis and conclusionThe Committee noted that IFRS Accounting Standards do not define ‘guarantees’, and there is no single Accounting Standard that applies to all guarantees. In determining which IFRS Accounting Standard to apply, an entity should apply judgment based on the specific facts and circumstances and the terms and conditions of the guarantee unless those terms and conditions have no substance. An entity follows these three steps.
An entity accounts for a guarantee that it issues based on the requirements, including the scoping requirements, in IFRS Accounting Standards and not based on the nature of the entity’s business activities. The Committee noted that the IASB will consider the broader application questions related to financial guarantee contracts during its next agenda consultation, including the meaning of the term ‘debt instrument’ in the definition of a financial guarantee contract. The Committee therefore concluded that an entity applies judgment in interpreting the meaning of the term ‘debt instrument’ when determining whether to account for a guarantee as a financial guarantee contract. Consequently, the Committee decided not to add a standard-setting project to the work plan. |
Comparison to US GAAPUnder US GAAP, guarantees of the debt of a joint venture accounted for under the equity method generally do not meet the Topic 4605 scope exceptions for initial recognition and measurement. US GAAP does not define a financial guarantee contract, unlike IFRS 9. Instead, US GAAP provides guidance on when to account for a financial guarantee contract as a derivative or as a guarantee. Like IFRS Accounting Standards, an issued financial guarantee contract is first analyzed to determine if it is in scope of derivative accounting. If the contract is eligible for the scope exception from derivative accounting and it creates off-balance sheet credit exposure for the guarantor, then it is accounted for under Topic 460 and the credit impairment standard under Topic 326-20. |
Revenue from contracts with customers (IFRS 15)
What is the period over which an educational institution recognizes revenue from tuition fees? Full text available here1 |
Fact pattern discussed by the CommitteeStudents attend the educational institution for approximately 10 months of the year and have a summer break of approximately two months. During the summer break the educational institution’s academic staff take a four-week holiday and use the rest of the time to wrap up the previous academic year and prepare for the next academic year. During their four-week holiday:
Applying IFRS 15, the educational institution recognizes revenue from tuition fees over time. The question asked was whether the educational institution is required to recognize revenue evenly over the academic year (10 months), evenly over the calendar year (12 months) or over a different period. Analysis and conclusionBased on the evidence gathered, the Committee noted that there is no diversity in accounting for revenue from tuition fees. Any differences in the period over which educational institutions recognize revenue from tuition fees rather result from differing facts and circumstances. Consequently, the Committee concluded that the fact pattern does not have widespread effect and decided not to add a standard-setting project to the work plan. |
Comparison to US GAAPUnder US GAAP, the method used to recognize tuition fee revenue should align with the transfer of educational instruction services to the students. Depending on the facts and circumstances of each educational institution, recognizing revenue ratably over the academic period is typically appropriate. |
Intangible assets (IAS 38)
Should an entity’s expenditure for carbon credits and research and development activities be recognized as intangible assets? Full text available here1 |
Fact pattern discussed by the CommitteeAn entity makes a commitment to reduce a percentage of its carbon emissions by 2030. To achieve its 2030 commitment, the entity has undertaken various affirmative actions. These actions typically involve creating teams with expertise to develop solutions for emissions reductions specific to the entity or its sector that will result in the creation of intellectual capital. In its 2023 fiscal year-end, the entity concludes that its 2030 commitment and subsequent actions have created a constructive or legal obligation. The entity considers the criteria in paragraph 14 of IAS 37 (discussed in a separate agenda decision) to determine whether to recognize a provision. The question asked was whether in 2024 the entity’s investments in carbon credits and expenditure for research and development activities resulting in intellectual capital meet requirements to be recognized as intangible assets. Analysis and conclusionThe Committee noted that the IASB has added to its reserve list a project on Pollutant Pricing Mechanisms (PPMs), some of which include the use of carbon credits. Since the IASB is expected to decide at a future meeting whether to start a project on accounting for PPMs, the Committee decided not to consider the question about accounting for carbon credits separately from the IASB’s research on PPMs. Therefore, the Committee only considered the question about accounting for expenditure on research and development activities. Evidence gathered by the Committee indicated no material diversity in the accounting for expenditure on research and development activities. Consequently, the Committee concluded that the fact pattern does not have widespread effect and decided not to add a standard-setting project to the work plan. |
Comparison to US GAAPUnder US GAAP, like IFRS Accounting Standards, research costs are generally expensed as they are incurred. Unlike IFRS Accounting Standards, except for certain computer software and direct-response advertising costs associated with acquiring or renewing insurance contracts, all other internally generated development costs are expensed as they are incurred. |
Financial reporting in hyperinflationary economies (IAS 29)
When does an economy become hyperinflationary? Full text available here1 |
Questions discussed by the CommitteeParagraph 3 of IAS 29 includes the following as indicators of a hyperinflationary economy:
In assessing when an economy becomes hyperinflationary, the questions asked were:
Analysis and conclusionBased on the evidence gathered, the Committee noted that there is no diversity in understanding the requirements for assessing when an economy becomes hyperinflationary. The Committee noted that stakeholders should:
Evidence gathered indicates stakeholders use judgment in assessing the indicators and might assign different weights to those. Consequently, the Committee concluded that the questions raised do not have widespread effect and decided not to add a standard-setting project to the work plan. |
Comparison to US GAAPUnder US GAAP, a hyperinflationary economy is indicated by cumulative inflation of approximately 100% or more, over a three-year period. Unlike IFRS Accounting Standards, if the cumulative inflation rate over three years is higher than 100%, then the economy is highly inflationary in all instances. |
Other application questions before the Committee
The Committee currently has the following Agenda Decisions that are at different stages of its due process.
The takeaway
Companies should periodically review the Committee Updates and the Committee's Compilation of Agenda Decisions, in which tentative and final Agenda Decisions are published, to consider how those decisions may affect their accounting policies. The issues discussed by the Committee are significant, and their effect on the financial statements could be material. Companies are expected to update their accounting policies in a timely manner to the extent that their accounting differs from that described in an Agenda Decision. Dual reporters should also consider any differences with US GAAP that might emerge through these Agenda Decisions.
Footnotes
1 Once finalized and approved by the IASB, all Agenda Decisions are available here
2 IFRS 17, Insurance Contracts
3 IFRS 15, Revenue from Contracts with customers
4 IAS 37, Provisions, Contingent Liabilities and Contingent Assets
5 Topic 460, Guarantees
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