IFRS Accounting Standards

Revised standard – Lack of Exchangeability (Amendments to IAS 21)

IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates that requires companies to provide more useful information in their financial statements when a currency cannot be exchanged into another currency. The amendments respond to stakeholder feedback and concerns about diversity in practice in accounting for a lack of exchangeability between currencies. The amendments will help companies and investors by addressing a matter not previously covered in the accounting requirements for the effects of changes in foreign exchange rates. These amendments will require companies to apply a consistent approach in assessing whether a currency can be exchanged into another currency and when it cannot, in determining the exchange rate to use and the disclosures to provide.

Effective for annual reporting periods beginning on or after January 1, 2025, with early application permitted.

Revised standards – Supplier Finance Arrangements

The IASB issued amendments to IAS 7, Statement of Cash Flows and IFRS 7, Financial Instruments: Disclosures. The amendments require qualitative and quantitative information to be provided about supplier finance arrangements. Typically, a supplier finance arrangement involves one or more finance providers offering to pay amounts that a company owes to its suppliers and the company agreeing to pay those finance providers with the same or different term than the original term with the suppliers.

The amendments supplement the current requirements in the IFRS standards that apply to reverse factoring and similar arrangements and enhances transparency to assist users in understanding the effects of these arrangements on a company’s liabilities, cash flows, liquidity risk and risk management.

Amendments to IAS 7 are effective for annual reporting periods beginning on or after January 1, 2024, with early application permitted. The amendments to IFRS 7 are effective when the amendments to IAS 7 are applied by the company.

Revised standard – Income Taxes: International Tax Reform – Pillar Two Model Rules

The IASB issued narrow-scope amendments to IAS 12 to provide temporary relief from accounting for deferred taxes arising from the implementation of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD). The Pillar Two model rules ensure that large multinational companies would be subject to a minimum 15% tax rate. The amendments introduce a temporary exception to the accounting for deferred taxes arising from the implementation of the rule and introduces targeted disclosure requirements for affected companies.

Companies can benefit from the temporary exception immediately but are required to provide the disclosures to investors for annual reporting periods beginning on or after January 1, 2023.

New guidance – Guidance for developing and drafting disclosure requirements in IFRS Accounting Standards

The IASB issued guidance that sets out the approach that the IASB will use when developing and drafting disclosure requirements in IFRS accounting standards. This guidance concludes the IASB’s project on improving its approach to developing and drafting disclosure requirements.

Revised standard – presentation of financial statements: non-current liabilities with covenants

The IASB issued narrow-scope amendments to IAS 1 to clarify that covenants to be complied with after the reporting date of the company do not affect the classification of a liability as current or non-current at the reporting date. Only covenants with which an entity is required to comply on or before the reporting date affect the classification of a liability as current or non-current. In addition, the amendments clarify that a company has to disclose information in the notes that enables users of financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months.

Effective for annual reporting periods beginning on or after January 1, 2024, with early application permitted.

Revised standard – leases: lease liability in a sale and leaseback

The IASB issued narrow-scope amendments to IFRS 16 to clarify how a seller-lessee subsequently measures a sale and leaseback transaction that satisfies the requirements in IFRS 15 to be accounted for as a sale. A seller-lessee is required to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of a lease.

Effective for annual reporting periods beginning on or after January 1, 2024, with early application permitted.

Revised standard – Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction

The IASB issued narrow-scope amendments for income taxes (IAS 12) to clarify that companies are required to recognize deferred tax on transactions that would result in the recognition of equal deferred tax assets and liabilities (e.g.: leases and decommissioning obligations). These amendments align the reporting and accounting for recognizing deferred tax on temporary differences.

Effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Revised standard – Insurance contracts

The IASB revised IFRS 17 to address an inconsistency between the requirements for providing comparative information on initial application between IFRS 17 and IFRS 9. Many insurance companies have not yet applied IFRS 9, which permits but does not require restatement of comparative periods. 

IFRS 17 requires restatement of comparative periods. The amendment to IFRS 17 allows companies who have not restated a financial asset, as per IFRS 9, to present comparative information as if the classification and measurement requirements of IFRS 9 had been applied to the financial asset before.

Effective for annual reporting periods beginning on or after January 1, 2023.

Revised standard – Presentation of Financial Statements: Disclosure of Accounting Policies

The IASB issued narrow-scope amendments to IAS 1 to require companies to disclose their material accounting policy information rather than their significant accounting policies. To support this amendment, IFRS Practice Statement 2, Making Materiality Judgements, was also amended to provide guidance on how to apply the concept of materiality to accounting policy disclosures. These amendments will help companies improve accounting policy disclosures to meet the needs of users of financial statements.

Effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Revised standard – Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates

The IASB issued narrow-scope amendments to IAS 8 to clarify the distinction between a change in an accounting policy and a change in an accounting estimate. The amendments also introduced the definition of accounting estimates and clarified that the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors.

Effective for annual reporting periods beginning on or after January 1, 2023, with early application permitted.

Exposure draft – Annual Improvements to IFRS Accounting Standards – Volume 11

The IASB issued an exposure draft proposing amendments to the following five standards and accompanying guidance:

• IFRS 1, First-time Adoption of International Financial Reporting Standards to address an inconsistency related to hedge accounting between IFRS 1 and IFRS 9, Financial Instruments;
• IFRS 7, Financial Instruments: Disclosures to address potential confusion or inconsistencies related to gain or loss on derecognition;
• Guidance on implementing IFRS 7 related to introduction, disclosure of deferred difference between fair value and transaction price and credit risk disclosures;
• IFRS 9, Financial Instruments to address a potential lack of clarity related to lessee derecognition of lease liabilities and a potential confusion related to the meaning of the term ‘transaction price’;
• IFRS 10, Consolidated Financial Statements to address a potential confusion related to the determination of a “de facto agent’; and
• IAS 7, Statement of Cash Flows to address a potential confusion arising from the use of the term ‘cost method’.

Comments are requested by December 11, 2023.

Request for information – Post-implementation Review of IFRS 15 Revenue from Contracts with Customers

The IASB issued a request for information asking for feedback on its post-implementation review of IFRS 15. IFRS 15 introduced a comprehensive and robust framework for the recognition, measurement and disclosure of revenue that applies to a wide range of transactions and industries and the IASB is assessing whether the requirements in the standard are working as intended.

Comments are requested by October 27, 2023.

Request for information – Post-implementation Review of IFRS 9 Financial Instruments – Impairment

The IASB issued a request for information asking for feedback on its post-implementation review of the expected credit loss requirements in IFRS 9. The ‘expected credit loss’ model in IFRS 9 provides for more timely recognition of loan losses and a forward-looking impairment model. The ‘expected credit loss’ model replaced the previous ‘incurred credit loss’ model, which only allowed credit losses to be recognized when a loss event occurred.

Comments are requested by September 27, 2023.

Exposure draft – Amendments to the Classification and Measurement of Financial Instruments

The IASB issued an exposure draft proposing to amend IFRS 9 and IFRS 7 to address matters identified during the post-implementation review of the classification and measurement requirements of IFRS 9. The proposed amendments:

• clarify the classification of financial assets with environmental, social and corporate governance (ESG) and similar features, including how contractual cash flows on loans with ESG-linked features should be assessed; and
• clarify how to account for the settlement of financial liabilities using electronic payment systems and provides an accounting policy option to allow a company to derecognize a financial liability before it delivers cash on the settlement date when specified criteria are met.

The Exposure Draft also proposes amendments or additions to the disclosure requirements for:

• investments in equity instruments designated at fair value through other comprehensive income; and
• financial instruments with contractual terms that could change the timing or amount of contractual cash flows based on the occurrence (or non‑occurrence) of a contingent event.

This comment period is closed.

Exposure draft – Subsidiaries Without Public Accountability: Disclosures

The IASB issued an exposure draft proposing a reduced disclosure IFRS standard that would apply on a voluntary basis to subsidiaries that:

• do not have public accountability
• have an ultimate or any intermediate parent that produces consolidated financial statements applying IFRS Standards

The intent is to reduce costs for eligible subsidiaries with reduced disclosure requirements while meeting the information needs of users of the financial statements.

The comment period is closed. The IASB expects to publish the new Standard in the first half of 2024.

New project – Climate-related and Other Uncertainties in the Financial Statements

The IASB approved a new project in March 2023 aimed at exploring ways for entities to provide better information about climate-related risks in their financial statements. In September 2023, after researching the nature and causes of concern related to the reporting in the financial statements on the effects of climate-related risks, the IASB decided to respond to stakeholder concerns by:

• exploring the development of educational materials and articles
• consulting on some matters with the IFRS Interpretations Committee
• exploring possible illustrative examples and
• exploring possible narrow-scope standard-setting in relation to disclosures about estimates.

This project complements the work of the ISSB, connecting the two sets of requirements for general purpose financial reporting The IASB will consider the work of the ISSB to the extent that it applies to the financial statements.

Additional non-authoritative guidance

To stay ahead of the curve, find additional non-authoritative guidance to help you navigate the application of IFRS Accounting Standards.

• Compilation of Agenda Decisions made by IFRS Interpretations Committee from November 2022 to April 2023 (IFRS Foundation, 2023)
• IFRS Interpretations Committee Agenda Decisions (AcSB,2023)
• IFRS Accounting Standards Discussion Group – searchable past meeting topics (AcSB, 2023)
• UK Financial Reporting Council review findings on IFRS 13 Fair value measurement (FRC, 2023)
• In Brief: Decisions made on merger and acquisition disclosures and goodwill accounting (IASB, 2023)
• IAS 1 Presentation of Financial Statements – Additional disclosure considerations for companies engaging in crypto-asset activities (AcSB, 2022)
• Summary Resource Guide – IFRS Viewpoints series (Mining, Oil and Gas) (CPA Canada, 2022)
• Framework for Reporting Performance Measures – voluntary guidance for enhanced decision making (AcSB, 2021)

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