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Discount rates - IASB Research Project


Project History

Many requirements of IFRS refer to, or specify, discount rates that entities should use to discount estimated future cash flows. However, those requirements define or specify different discount rates, cash flows and their components of the calculations, depending on the objective of the particular IFRS.

During the 2011 Agenda Consultation, the IASB learnt that the reasons for using different discount rates are not well understood by constituents and, moreover, some respondents suggested that such differences cause IFRS requirements to be inconsistent.

Therefore, the IASB decided to commence a research project to examine discount rate requirements in IFRS and assess whether there were any inconsistencies that the IASB should address.

The IASB discussed the project for the first time at its June 2014 meeting. It was considered that the main Standards that would be subject to the review were: IAS 19, IAS 36, IAS 37 and IFRS 9. It was also considered that the outcome of the project could be a Research Paper - a new type of document that had not been issued by the IASB before.

The IASB discussed a draft Research Paper at its meetings in September 2015, December 2015 and January 2016. The IASB did not conclude its discussions, but following the 2015 IASB Agenda Consultation, the IASB decided that it would not prioritise the project and that it should come to an end without a significant amount of further work.

At its March 2017 meeting, the IASB discussed how to end the project. The IASB noted that the project has two outputs:

  • the project findings; and
  • a list of matters for future staff consideration in standard-setting work relating to discount rates and other aspects of present value measurements.

The IASB decided that: 

  • it would not seek feedback from the public on the research outputs; and
  • no further work on the research project is needed to meet its objectives

In February 2019 the IASB published a Project Summary, which marked the end of the project.

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