The International Accounting Standards Board (IASB) regularly publishes new International Financial Reporting Standards (IFRS), Interpretations of Standards (IFRIC) or amendments to existing IFRS Standards.
In response to these, the global IFRS team publishes IFRS Alerts on these changes (and other issues relevant to IFRS) as they are announced so that you can keep up to date.
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| Issue 2024-04 |
IASB issues annual improvements to IFRS Accounting Standards
Background The publication is a collection of amendments to IFRS Standards discussed by the IASB during the current project cycle for annual improvements. The IASB uses the Annual Improvements process to make necessary, but non-urgent, amendments to IFRS Standards that will not be included as part of any other project. By presenting the amendments in a single document rather than as a series of piecemeal changes, the IASB aims to ease the burden of change for all concerned. A summary of the issues addressed is set out below:
Effective date Our thoughts |
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| Issue 2024-03 |
Amendments to the Classification and Measurement of Financial Instruments
Background The IASB’s PIR of the classification and measurement requirements in IFRS 9 and the related requirements in IFRS 7 concluded that overall, the requirements set out in these two standards can be applied consistently and they also provide useful information to users of the financial statements. However, the PIR process did reveal some areas that could be improved and they included:
To address these matters and to improve clarity and understanding, the IASB has issued some amendments to the classification and measurement of financial instruments to promote consistency. The amendments Derecognition of financial instruments when an electronic payment system is used New guidance has been added to IFRS 9 to specifically address when a financial liability should be derecognised when it is settled by electronic payment. Previously, an entity was required to wait until the settlement date of the transaction to discharge the liability, but the new guidance allows for the liability to be discharged before the settlement date if:
Classification of financial assets Contractual cash flows that are solely payments of principal and interest on the principal amount outstanding IFRS 9 has always required an entity to consider the characteristics of its contractual cash flows to appropriately classify a financial asset. The amendments provide some additional guidance to help an entity assess whether the contractual cash flows of a financial asset are consistent with a basic lending arrangement. Given the importance of this determination, new guidance has been provided, including examples of contractual cash flows that are solely payments of principal and interest on the principal outstanding, to ascertain whether or not the arrangements would be consistent with a basic lending arrangement. IFRS 9 also describes certain situations where financial assets may have contractual cash flows that are described as principal and interest, but the payments made do not actually represent a basic lending arrangement. This may be the case if a financial asset has non-recourse features. The amendments to IFRS 9 provide a clearer definition of a non-recourse feature, which is now outlined as a financial asset where the entity’s ultimate right to receive cash flows is contractually limited to the cash flows generated by specified assets. Contractually linked instruments IFRS 9 has also been updated to provide additional guidance to clarify the characteristics of contractually linked instruments as well as the definition of the underlying pool used to assess whether a transaction contains contractually linked instruments. The amendments also specify that transactions that contain multiple debt instruments are not automatically contracts with multiple contractually linked instruments, and so they must be carefully assessed before a final determination is made. IFRS 7: Disclosures Investments in equity instruments designated at fair value through other comprehensive income The amendments to IFRS 7 add new required disclosures for any investments in equity instruments designated at fair value through other comprehensive income. These include disclosures of the fair value gain or loss presented in other comprehensive income for the period, showing separately the fair value gain or loss related to investments derecognised or held, as well as the transfer of cumulative gain or loss within equity related to derecognised investments. Contractual terms that could change the amount of contractual cash flow based on contingent events IFRS 7 has been amended to require additional new disclosures for each class of financial asset measured at amortised cost or fair value through other comprehensive income, as well as financial liabilities measured at amortised cost. When there are contractual terms that could change the contractual cash flows based on the outcome of a contingent event not directly related to basic lending risk, an entity must now disclose certain information surrounding the related contingent event as well as possible changes to cash flows and the gross carrying value and amortised cost of the related financial asset or liability. These new disclosures are also now reflected in IFRS 19. Effective date The amendments are effective from annual reporting periods beginning on or after 1 January 2026. Early adoption of the Standard is permitted, with a choice to either apply all amendments at the same time and disclose that fact or to apply only the amendments to the Application Guidance sections for the earlier period and disclose that fact. An entity is required to apply these amendments retrospectively. However, an entity is not required to restate prior periods to reflect the application of the amendments unless it can clearly demonstrate that hindsight has not been used to make those changes. Our thoughts We were pleased to see the IASB taking on board many of the comments submitted to it during the PIR process on IFRS 9 and responding to them in a timely way. One of the goals of the IASB in making these amendments was to reduce diversity in practice, and we believe this will happen. The guidance set out in these amendments for preparers on the derecognition of financial liabilities settled through electronic transfer will be helpful. So will the amendments clarifying how to assess the contractual cash flows characteristics of financial assets when ESG-linked features are present, when non-recourse features exist and when contractually linked arrangements are in place. For investors the additional disclosure requirements now reflected in IFRS 7, to deal with both financial equity investments 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 on the occurrence (or non-occurrence) of a contingent event, will be insightful. |
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| Issue 2024-02 |
IFRS 19 – Simplifying financial reporting for eligible subsidiaries Following last month’s release of IFRS 18 ‘Presentation and Disclosure in Financial Statements’, the International Accounting Standards Board (IASB) has published another new standard — IFRS 19 ‘Subsidiaries without Public Accountability: Disclosures’ (the Standard). The new Standard creates a reduced set of disclosures that certain in-scope entities can elect to apply instead of the disclosure requirements set out in other IFRS. IFRS 19 will work alongside other IFRS, with eligible subsidiaries applying the measurement, recognition and presentation requirements set out in other IFRS and the revised disclosures outlined in IFRS 19. The objective of the Standard is to alleviate the reporting burden for subsidiaries without public accountability. Background The release of the Standard is the final stage of the ‘Disclosure Initiative – Targeted Standards-level Review of Disclosures’ project, which came about due to subsidiaries struggling to meet the requirements for reporting information to their parent entity to be used in consolidated financial statements. When reporting to a parent that applies full IFRS, subsidiaries must apply the recognition and measurement requirements in IFRS. This creates difficult circumstances for entities that qualify to apply IFRS for Small and Medium-Sized Entities (SMEs) for their standalone reporting. IFRS for SMEs has fewer disclosure requirements than full application of IFRS; however, the recognition and measurement requirements differ to those of full IFRS. As a result, some subsidiaries choose not to take advantage of the reduced disclosures for IFRS for SMEs as it results in additional accounting to agree information reported to the parent entity with full IFRS recognition and measurement principles. This new Standard aims to create a more attractive option for subsidiaries without public accountability. Eligible entities will now be able to elect to apply IFRS 19, which has the same recognition, measurement, and presentation principles as full IFRS, but allows for specific reduced disclosures in most topic areas. The IASB believes IFRS 19 will provide a solution that will alleviate the reporting burden for in-scope entities. Scope In order to apply IFRS 19, an entity must meet all of the following criteria at the end of its reporting period:
For purposes of applying IFRS 19, an entity has public accountability if:
Disclosure requirements IFRS 19 includes reduced disclosures for almost all existing IFRS, the details of which are specific to each impacted standard. To apply IFRS 19, entities will first apply the recognition, measurement, and presentation requirements in each applicable IFRS. The entity will then not apply the disclosure requirements in the applicable IFRS but will instead refer to IFRS 19 for required disclosures. Standards with no reduced disclosures The IASB assessed each individual standard to determine whether to reduce disclosures and how best to do so while still meeting the fair presentation requirements and investor needs. The following standards do not have reduced disclosure requirements under IFRS 19 and the disclosures set out in each standard still apply:
Subsidiaries that are eligible to apply IFRS 19 are not required to apply IAS 33 or IFRS 8 but may do so voluntarily. If either are applied, the full disclosures required by IAS 33 or IFRS 8 will apply. Maintenance of IFRS 19 Due to the nature of IFRS 19, it will need to be amended whenever there are any new or amended disclosure requirements in other IFRS. To ensure that IFRS 19 is always up to date, any proposed amendments to IFRS 19 will be included in an exposure draft for the corresponding new or amended IFRS. Effective date of IFRS 19 The Standard is effective from annual reporting periods beginning on or after 1 January 2027, allowing eligible reporting entities and their auditors time to assess whether electing to apply IFRS 19 would benefit them. Early adoption of the Standard is permitted. It is important to note that if an entity applies IFRS 19 in the current period but not in the period immediately preceding, comparative prior period information is required to be provided for amounts reported in the current period financial statements. Our thoughts We support the release of this new Standard, which should reduce the cost of preparing financial statements for eligible subsidiaries while maintaining the usefulness of the presented information. While the effective date is a while away, we would encourage entities to consider whether they are eligible and to assess whether applying IFRS 19 would reduce their reporting burden. We have plans to release an article later in the year that will provide a more detailed look at the requirements of this Standard. |
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| Issue 2024-01 |
Introducing IFRS 18 – The IASB’s new presentation and disclosure standard On 9 April 2024 the International Accounting Standards Board (IASB) published a new standard, its first since 2017. The new standard, IFRS 18 ‘Presentation and Disclosure in Financial Statements’ (the Standard) replaces IAS 1 ‘Presentation of Financial Statements’ and will impact every reporting entity that currently uses International Financial Reporting Standards (IFRS). The objective of the Standard is to improve how information is communicated in an entity’s financial statements, particularly in the statement of profit or loss and in its notes to the financial statements. Key changes
Background The release of the Standard is the final stage of the Primary Financial Statements project, which came about due to the lack of detailed requirements in IAS 1 for the following areas:
This led to diversity in practice as entities defined their own subtotals and performance measures, which made comparison of financial performance between entities difficult for investors. The IASB believes IFRS 18 will resolve these issues and improve the overall quality of financial reporting. The key changes in the new Standard Overall, the majority of changes made in IFRS 18 impact the statement of profit or loss and notes to the financial statements, but there are also limited changes to specific requirements that are set out in IAS 7 ‘Statement of Cash Flows’. Only minimal changes were made to the disclosures required for the statement presenting comprehensive income, the statement of changes in equity and the statement of financial position. While much has been carried forward from IAS 1, there are some key changes that reporting entities need to be aware of. Changes to presentation requirements in the statement of profit or loss The main change introduced by IFRS 18 is to the way in which reporting entities will structure their statement of profit or loss. Firstly, the Standard introduces two new defined subtotals:
These new required subtotals are intended to increase comparability by ensuring that information presented for investors is consistent across different entities. Additionally, the Standard requires an entity to classify all income and expenses into one of the following five categories:
The investing category includes income and expenses from investments in associates, joint ventures and unconsolidated subsidiaries, cash and cash equivalents, and any other assets (such as cash and cash equivalents) that generate returns separately from the entity’s other resources. The financing category distinguishes between transactions that are solely for the purpose of raising finance, and those that are not. Income and expenses from all liabilities that result solely from the raising of finance are included in this category, along with some elements of interest income or expense recognised by applying other IFRS. This category, together with the subtotal for profit before financing and income taxes enables investors to assess the reporting entity’s performance before the effects of its financing. The income taxes and discontinued operations categories include income and expenses resulting from the application of IAS 12 ‘Income taxes’ and any related foreign exchange differences, and IFRS 5 ‘Non-current assets held for sale and discontinued operations’ respectively. Finally, the operating category includes all other items of income and expense that are not allocated to one of the other four categories. It is a default category, so it is important to note this category will include income and expenses from an entity’s main business activities, regardless of whether the income or expenses are volatile or unusual. The operating profit subtotal provides not only a measure of past performance, but also a starting point for forecasting an entity’s future cash flows. IFRS 18 requires foreign exchange differences to be classified in the same category of the statement of profit or loss as the income and expenses from items that gave rise to the foreign exchange differences. This means, for example, that foreign exchange differences on bank loans would be classified in the financing category. However, if classifying foreign exchange differences this way would involve undue cost or effort, an entity is permitted to classify them in the operating category. Careful attention should be given to specific requirements for classifying income and expenses from hybrid contracts and fair value gains and losses on derivatives. Entities with specified main business activities While the above applies to most entities, it is complicated for reporting entities such as investment firms, financial institutions and insurers where their main business activities (for which income and expenses would usually be classified in the operating category), would fall into the definition of investing or financing activities. When a reporting entity has assessed that it invests in assets as its main business activity, income and expenses are split between the investing category and operating category, depending on how the underlying assets are accounted for. For all assets accounted for using the equity method, income and expenses are included in the investing category, and for all other assets income and expenses are included in the operating category. When a reporting entity has assessed that it provides financing to customers as its main business activity, it will classify income and expenses from liabilities relating to providing such finance in the operating category. The assessment of an entity’s main business activities is therefore going to be a key judgement which may significantly impact the geography of where items appear in the statement of profit or loss. This is likely to prove particularly challenging for mixed groups and groups of reporting entities which provide multiple services. New requirements to be included in the notes to the financial statements The Standard also introduces new disclosures, in addition to those carried forward from IAS 1, to supplement the primary financial statements. They are:
Management-defined performance measures In order to address the significant diversity in practice currently seen when it comes to so-called ‘alternative performance measures’ and any non-GAAP performance measures, IFRS 18 introduces the concept of a ‘management-defined performance measure’ (MPM). MPMs are subtotals of income and expenses other than those listed by IFRS 18 or specifically required by another IFRS, that an entity uses:
Alongside any MPMs that are disclosed, a reporting entity will also be required to disclose information including:
These disclosures will be required for any measure that meets the definition of a MPM and when applicable and they must be included in a single note in the reporting entity’s financial statements. Updated guidance for the aggregation and disaggregation of information The Standard provides specific guidance to ensure that aggregation and disaggregation in the financial statements is consistent and provides investors with the information they need for analysis. The basic principles set out in IFRS 18 require entities to:
Changes to how expenses in the operating category are presented Consistent with IAS 1, IFRS 18 requires an entity to present in a structured and meaningful way its operating expenses based either on their nature or their function. This means some entities might decide to classify some expenses by nature and other expenses by function. The Standard requires entities that present expenses classified by function to disclose the amount of depreciation, amortisation, employee benefits, impairment losses and write-down of inventories included in each line in the operating category of the statement of profit or loss. Consequential changes made to other standards Consequential changes have been made to the standard on cash flow statements. IAS 7 now requires entities to use the operating profit total as defined in IFRS 18 as the starting point for reporting cash flows from operating activities using the indirect method. In addition, the interest and dividend presentation alternatives that previously existed have also been removed to simplify practice and reduce diversity in preparation. Elsewhere, IAS 33 ‘Earnings per Share’ (EPS) requirements have been amended to permit an entity to disclose additional EPS information over and above reporting basic and diluted EPS amounts. However, additional amounts can only be included in the EPS calculation if the numerator is either a total or subtotal identified in IFRS 18 or a MPM. IAS 34 ‘Interim Financial Reporting’ has also been updated to require disclosure of information about MPMs in interim financial statements and guidance is now provided on how subtotals should be dealt with in interim financial statements. Effective date of IFRS 18 The Standard is effective from annual reporting periods beginning on or after 1 January 2027, allowing reporting entities and their auditors time to properly prepare for the transition to IFRS 18. Early adoption of the Standard is permitted. It is important to note, IFRS 18 must be applied retrospectively, so restatement of all comparative information is required when the Standard is adopted. Our thoughts We support the release of this new Standard, which should improve the overall quality of financial reporting and enable better comparison of financial statements by investors. While the effective date is a while away, we would encourage entities to start considering the impact sooner rather than later. To assist with this, we have plans to release a ‘Getting ready for IFRS 18’ guide later in the year that will provide a more detailed look at the requirements of this Standard, and the likely impact on reporting entities. |
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| Issue 2023-02 |
IASB issues amendments to enhance the transparency of supplier finance arrangements The International Accounting Standards Board (IASB) has amended IAS 7 ‘Cash flow Statements’ and IFRS 7 ‘Financial Instruments: Disclosures’ through the increase of disclosure requirements to enhance the transparency of supplier finance arrangements and their effects on an entity’s liabilities, cash flows and exposure to liquidity risk. The amendments require additional disclosures that complement the existing disclosures in these two Standards. They require entities to disclose:
These additional disclosure requirements address investors wanting more visibility around supplier finance arrangements, which in some jurisdictions around the world are better known are reverse factoring arrangements. The amendments to IAS 7 and IFRS 7 are effective for accounting periods on or after 1 January 2024. Our thoughts |
| Issue 2023-01 |
IASB amends IAS 12 to help entities respond to the 'Pillar Two' tax rules The International Accounting Standards Board (IASB) has issued amendments to IAS 12 ‘Income taxes’ to give entities temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s (OECD) international tax reform. The amendments introduce both a temporary exception and some targeted disclosure requirements. Background However, while the reaction from jurisdictions around the world to implement the changes has been positive, there have been major stakeholder concerns about the uncertainty over the accounting for deferred taxes arising from the implementation of these rules. Those concerns mainly refer to identifying and measuring deferred taxes because determining whether the Pillar Two Rules will create additional temporary differences is very difficult and also which tax rate will be applicable (considering the number of factors affecting its determination). Therefore, the IASB has acted quickly to address these concerns and provide direction on what they expect entities to disclose. The amendments:
Entities are able to benefit from the temporary exception immediately as soon as the amendments are published but in providing this exemption they are required to provide the disclosures to investors for annual reporting periods beginning on or after 1 January 2023. However, in some jurisdictions, such as Europe, the endorsement process will probably not be completed before 30 June 2023 resulting in reporting entities operating in jurisdictions where the Pillar Two Rules have been enacted or quasi enacted, being in a situation that the amendments are aiming to avoid. We are of the view that if this happens, reporting entities are able to develop their own accounting policy in accordance with the guidance of Paragraph 10 of IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’. We consider that the value of the information being provided (ie relevancy, reliability, faithful presentation) is outweighed by the costs of attempting to update the deferred tax balances for Pillar Two Model Rules. Put another way, given these amendments to IAS 12 make it clear that no deferred tax is required to be recognised as a result of Pillar Two Model Rules, trying to identify and estimate any deferred tax for one period (i) in a way that might not be consistent with how other reporting entities would do it and (ii) with the only perspective to reverse it in a following period, may not end up providing reliable, consistent and decision useful information for the users of the financial statements. Our thoughts Considering some jurisdictions around the world have already substantially enacted the Pillar Two Model Rules, we commend the IASB for the speed in which they published these amendments and encourage reporting entities to consider what new disclosures are now required well ahead of any reporting obligations they might have. Listed entities in particular should take into account any views expressed by their local regulator in developing their accounting policy on this matter. |
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| Issue 2022 – 05 |
Ethiopia should now be considered a hyperinflationary economy Economic conditions that currently exist in Ethiopia will require reporting entities in that country to follow the requirements set out in IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. This means that any entities that have interim or annual reporting requirements at 31 December 2022 or thereafter in Ethiopia should reflect this Standard when preparing their IFRS-based financial statements.Therefore at 31 December 2022 there are eleven countries around the world where IAS 29 should be applied, when entities want to state they are in full compliance with IFRS. These countries are: Argentina, Ethiopia, Iran, Lebanon, South Sudan, Sudan, Suriname, Turkey, Venezuela, Yemen and Zimbabwe.Currently there are four countries that are potentially hyperinflationary and therefore should be closely monitored. They are: Angola, Haiti, Sri Lanka and Syria. As further information becomes available, we will continue to update this alert. Our thoughts IAS 29 is not a Standard that can be quickly implemented, particularly in group situations. Careful consideration needs to be given to recent IFRIC guidance dealing with situations where there is a hyperinflationary parent that has subsidiaries who also report in a hyperinflationary currency versus situations where a non-hyperinflationary parent has subsidiaries that report in a hyperinflationary currency. Also be mindful of how a hyperinflationary parent with subsidiaries that do not report in a hyperinflationary currency should be accounted for given the requirements set out in IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’.Any reporting entity considering IAS 29 for the first time will have to adapt their existing accounting systems to be able to process the hyperinflationary adjustments. It is important they understand the mechanics of adjusting for hyperinflation so they can restate in their financial statements both current and comparative period amounts.Download the full alert for a recap of the requirements of IAS 29. |
| Issue 2022 – 04 |
IASB amends IAS 1 to provide better disclosure on long-term debt with covenants IAS 1 requires entities to classify debt as current if the entity is unable to avoid settling the debt within 12 months after the reporting date. However, the entity may need to comply with covenants during that same period, which may question whether the debt should be classified as non-current. For example, a long-term debt may become current if the entity fails to comply with the covenants during the 12-month period after the reporting date.The amendments set out in ‘Non-current Liabilities with Covenants (Amendments to IAS 1)’ state that at the reporting date, the entity does not consider covenants that will need to be complied with in the future, when considering the classification of the debt as current or non-current. Instead, the entity should disclose information about these covenants in the notes to the financial statements.The IASB aims for these amendments to enable investors to understand the risk that such debt could become repayable early and therefore improving the information being provided on the long-term debt.The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, with early application permitted. If the amendments are applied in an earlier period, this should be disclosed. The effective date coincides with that of the amendments to IAS 1 previously issued in 2020 ‘Classification of Liabilities as Current or Non-current’. Our thoughts We welcome the IASB addressing this area, as we believe it addresses the feedback received on the classification of debt as current or non-current when preparers started to apply the previous amendments to IAS 1 ‘Classification of Liabilities as Current or Non-current’. |
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Issue 2022 – 03 |
IASB amends the requirements for sale and leaseback transactions The IASB has issued additional guidance in IFRS 16 on accounting for sale and leaseback transactions. Previously IFRS 16 only included guidance on how to account for sale and leaseback transactions at the date of the transaction itself. However, the Standard did not specify any subsequent accounting when reporting on the sale and lease back transaction after that date. As a result, without further requirements, when the payments include variable lease payments there is a risk that a modification or change in the leaseback term could result in the seller-lessee recognising a gain on the right of use retained even though no transaction or event would have occurred to give rise to that gain. Consequently, the IASB decided to add subsequent measurement requirements for sale and leaseback transactions to IFRS 16. The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, with early application permitted. If the amendments are applied in an earlier period, this should be disclosed. |
| Issue 2022 – 02 |
Turkey should now be considered a hyperinflationary economy [ 235 kb ] Turkey has economic conditions that will now require reporting entities in that country to follow the requirements set out in IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Given this, we expect entities that have interim or annual reporting requirements at 30 June 2022 or thereafter to reflect this Standard in their financial statements. The inclusion of Turkey means that at the date of issuing this publication there are now eleven countries around the world where IAS 29 should be applied, when entities are stating they are in full compliance with IFRS. These countries are: Argentina, Iran, Lebanon, South Sudan, Sudan, Suriname, Syria, Turkey, Venezuela, Yemen and Zimbabwe. |
| Issue 2022 – 01 |
Accounting implications of the conflict in Ukraine [ 194 kb ] |
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| Issue 2021 - 07 | IASB provides transition option to insurers applying IFRS 17 [ 163 kb ] [ 163 kb ] The International Accounting Standards Board (IASB) has released a narrow-scope amendment to the transition requirements in IFRS 17 ‘Insurance Contracts’, providing insurers with an option aimed at improving the usefulness of information to investors on initial application of the new Standard. |
| Issue 2021 - 06 |
The IFRS Foundation (Foundation) has announced three significant developments to provide the global financial markets with high-quality disclosures on climate and other sustainability issues:
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| Issue 2021 - 05 |
The International Accounting Standards Board (IASB) has issued ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’ (Amendments to IAS 12).
The amendments require an entity to recognise deferred tax on certain transactions (eg leases and decommissioning liabilities) that give rise to equal amounts of taxable and deductible temporary differences on initial recognition.
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| Issue 2021 - 04 |
The International Accounting Standards Board (IASB) has issued ‘Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)’, an extension to the practical expedient period in the amendments to IFRS 16 ‘Leases’ made last year. This extension is for one year, so the application period now extends until 30 June 2022.
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| Issue 2021 - 03 |
The IFRS Foundation has confirmed there is an urgent need for global sustainability reporting standards. Given this, its Trustees are continuing their work on the establishment of an international sustainability reporting standards board within the existing governance structure of the Foundation.
The intention is for the Trustees to produce a definitive proposal (including a road map with timeline) by the end of September 2021, possibly leading to an announcement on the establishment of a sustainability standards board at the meeting of the United Nations Climate Change Conference COP26 in November 2021.
This alert [ 180 kb ] outlines the Foundation’s views about the strategic direction of its new board and their intended next steps. |
| Issue 2021 - 02 |
For entities with operations in the United Kingdom (UK) and the EU, the determination of the income tax impact on Brexit will require some significant judgements to be made.
These judgements should be based on the facts and circumstances of the reporting entity after considering the tax laws and regulations substantively enacted at 31 December 2020 because any future changes to tax laws requiring legislative activity cannot be taken into account.
The change in the UK’s tax status (because it is not longer a member of the EU) could also trigger the application of a different set of existing tax laws, which means changes to existing current and deferred tax balances may result.
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| Issue 2021 - 01 |
The International Accounting Standards Board (IASB) has now published an Exposure Draft ‘Regulatory Assets and Regulatory Liabilities’ (the ED). The ED proposes to replace IFRS 14 ‘Regulatory Deferral Accounts’ and require entities subject to rate regulation to give investors better information about their financial performance.
The proposed Standard would introduce a requirement for entities to give investors such information by reporting regulatory assets and regulatory liabilities in their statement of financial position, and related regulatory income and regulatory expense in their statement of profit or loss. |
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| Issue 2020 - 11 |
The International Accounting Standards Board (IASB) has issued a discussion paper DP/2020/2 ‘Business Combinations under Common Control’ for public consultation on possible accounting requirements of acquisitions involving the same group. These acquisitions are commonly known as business combinations under common control (BCUCC).
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| Issue 2020 - 10 |
IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ requires the financial statements of any entity whose functional currency is the currency of a hyperinflationary economy to be restated for changes in the general purchasing power of that currency so that the financial information provided is more meaningful.
Below is a reminder of the accounting implications of applying IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Our view is that until further notice, IAS 29 should be applied by entities whose functional currency is the currency of the following countries:
Iran and Lebanon should be applying IAS 29 for the first time in 2020.
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| Comment letter |
ED/2019/7 General Presentation and Disclosures [ 358 kb ] Our submitted comment letter on the International Accounting Standards Board's (IASB) Exposure Draft (ED) supports the reasons for the Board developing this ED, in order to improve the way information is communicated in the financial statements, particularly in the statement of profit or loss. We believe the proposals will add further consistency and clarity to the financial statements which will enhance comparability for users of financial statements. |
| Issue 2020 - 09 |
IASB issues Interest Rate Benchmark Reform Phase 2 [ 180 kb ] The International Accounting Standards Board (IASB) has published Interest Rate Benchmark Reform Phase 2 |
| Issue 2020 - 08 |
IASB defers the effective date of the IAS 1 Amendments [ 165 kb ] The International Accounting Standards Board (IASB) has issued an amendment to defer the effective date of the |
| Issue 2020 - 07 |
Amendments to IFRS 17 and IFRS 4 [ 491 kb ] The International Accounting Standards Board (IASB) has issued ‘Amendments to IFRS 17 ‘Insurance Contracts’’ (the Amendments). The aim of the amendments is to address the concerns raised by stakeholders and help entities to more easily transition and implement the Standard. The IASB also issued an amendment to the previous insurance Standard IFRS 4, ‘Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4)’ so that entities can still apply IFRS 9 ‘Financial Instruments’ alongside IFRS 17. |
| Issue 2020 - 06 |
Relief for lessees accounting for rent concessions during the COVID-19 pandemic [ 214 kb ] The International Accounting Standards Board (IASB) has published an amendment ‘COVID-19-Related Rent Concessions (amendment to IFRS 16)’ (the amendment). The amendment adds a practical expedient to the Standard which provides relief for lessees in assessing whether specific COVID-19 rent concessions are considered to be lease modifications. Instead, if this practical expedient is applied, these rent concessions are treated as if they are not lease modifications. There are no changes for lessors. |
| Issue 2020 - 05 |
IASB issues four narrow-scope amendments to IFRS Standards [ 231 kb ] The International Accounting Standards Board (IASB) has issued a collection of narrow-scope amendments to IFRS Standards. The collection includes amendments to three Standards as well as Annual Improvements to IFRS Standards, which addresses non-urgent (but necessary) minor amendments to four standards. |
| Issue 2020 - 04 |
IASB proposes relief for rent concessions during the COVID-19 pandemic [ 223 kb ] The International Accounting Standards Board (IASB) published an Exposure Draft ‘COVID-19-Related Rent Concessions - Proposed amendment to IFRS 16’ (the ED). The ED proposes to add a practical expedient to the Standard which provides relief for lessees in assessing whether specific COVID-19 rent concessions are considered to be lease modifications. Instead, if this practical expedient is applied, these rent concessions are treated as if they are not lease modifications. There are no proposed changes for lessors. |
| Issue 2020 - 03 |
Accounting implications of the Coronavirus (COVID-19) outbreak [ 173 kb ] The spread of the Coronavirus is impacting businesses around the world. Entities need to carefully consider the accounting implications of this situation. This IFRS Alert considers the impact of the Coronavirus on 31 December 2019 year ends. |
| Issue 2020 - 02 |
IASB Issues Classification of Liabilities as Current or Non-Current [ 189 kb ] On 23 January 2020 the IASB published ‘Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)’ which clarify the Standard’s guidance on whether a liability should be classified as either current or non-current. |
| Issue 2020 - 01 |
IASB proposes major changes to the primary statements and notes [ 291 kb ] In December 2019 the International Accounting Standards Board (IASB) published an Exposure Draft ‘General Presentation and Disclosures’ (General Presentation ED). The General Presentation ED proposes to replace IAS 1 ‘Presentation of Financial Statements’ with a new IFRS and amend several other IFRS Standards. |
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| Issue 2019 - 01 |
IASB issues Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) [ 254 kb ] In response to the ongoing reform of interest rate benchmarks around the world the IASB have released these latest amendments. The amendments aim to provide relief for hedging relationships. |
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| Issue 2018 - 05 |
Argentina confirmed as hyperinflationary [ 216 kb ] This alert confirms that IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ will need to be applied from 1 July 2018. The Alert sets out some of the implications of applying IAS 29. |
| Issue 2018 - 04 |
IASB issues Definition of Material (Amendments to IAS 1 and 8) [ 217 kb ] This alert looks at the IASB’s publication ‘Definition of Material (Amendments to IAS 1 and IAS 8). The amendments made by this publication are designed to make it easier for companies to define materiality judgements. |
| Issue 2018 - 03 |
Argentina expected to be declared hyper-inflationary in 2018 [ 225 kb ] This alert looks at the potential implications of Argentina being declared hyperinflationary in the second half of 2018. IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ requires the financial statements of any entity whose functional currency is hyperinflationary to be restated for changes in its general purchasing power. |
| Issue 2018 - 02 |
Conceptual Framework for Financial Reporting (Conceptual Framework) [ 189 kb ] The Conceptual Framework describes the objective of, and the concepts for, general purpose financial reporting. Although it is not a Standard and will not immediately change or override any existing Standards, it might affect entities that develop or select accounting policies in accordance with the previous version of the Conceptual Framework that was issued in 2010. |
| Issue 2018 - 01 |
Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) [ 264 kb ] The amendments require companies to use updated actuarial assumptions to determine pension expenses following changes to a defined benefit pension plan, as described in this alert. |
| Issue | Topic |
| Issue 2017 - 07 | |
| Issue 2017 - 06 |
Long-term Interests in Associates and Joint Ventures [ 264 kb ] (Amendments to IAS 28) |
| Issue 2017 - 05 |
Prepayment Features with Negative Compensation (Amendments to IFRS 9) [ 269 kb ] |
| Issue 2017 - 04 |
IFRS Practice Statement 2: Making Materiality Judgements [ 268 kb ] |
| Issue 2017 - 03 |
IFRIC 23 ‘Uncertainty over Income Tax Treatments' [ 270 kb ] |
| Issue 2017 - 02 | |
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Issue 2017 - 01 |
Uncertainty over tax issues [ 309 kb ] resulting from the UK's decision to leave the European Union |