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.

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 – 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.

Exposure draft – Disclosure Requirements in IFRS Standards – A Pilot Approach

The IASB issued an exposure draft proposing guidance on developing and drafting disclosure requirements for IFRS Standards in the future. To test this draft guidance, the proposals also included amendments to IFRS 13, Fair Value Measurement, and IAS 19, Employee Benefits, that result from applying the proposed guidance to those standards.

The intent is to help companies understand the type of information useful and material to investors and broader stakeholder groups.

The comment period is closed.

Exposure draft – Supplier Finance Arrangements

The IASB issued an exposure draft proposing to amend IAS 7, Statement of Cash Flows and IFRS 7, Financial Instruments: Disclosures . The amendments would 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 intent is to complement the current requirements in the IFRS standards that apply to reverse factoring and similar arrangements and enhance transparency to assist users in understanding the effects of these arrangements on a company’s liabilities, cash flows, liquidity risk and risk management.

The comment period is closed.

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