The European Union has published a Commission Regulation endorsing the amendments to IAS 1 'Presentation of Financial Statements' and IAS 19 'Employee Benefits' published by the IASB on 16 June 2011.
The European Union has published the Commission Regulation (EC) No 475/2012 of 5 June 2012 amending Regulation (EC) No 1226/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council in the Official Journal on 6 June 2012. This means that the amendments to IAS 1 Presentation of Financial Statements and IAS 19 Employee Benefits published by the IASB on 16 June 2011 have now been incorporated into European law.
The amendments to IAS 1 must be applied, at latest, to annual periods beginning on or after 1 July 2012. The amendments to IAS 19 must be applied, at latest, to annual periods beginning on or after 1 January 2013.
| Summary of the amendments |
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Amendments to IAS 1 Presentation of Financial Statements
- Preserve the amendments made to IAS 1 in 2007 to require profit or loss and OCI to be presented together, i.e. either as a single 'statement of profit or loss and comprehensive income', or a separate 'statement of profit or loss' and a 'statement of comprehensive income' – rather than requiring a single continuous statement as was proposed in the exposure draft
- Require entities to group items presented in OCI based on whether they are potentially reclassifiable to profit or loss subsequently. i.e. those that might be reclassified and those that will not be reclassified
- Require tax associated with items presented before tax to be shown separately for each of the two groups of OCI items (without changing the option to present items of OCI either before tax or net of tax).
Amended IAS 19 Employee Benefits
- Require recognition of changes in the net defined benefit liability (asset) including immediate recognition of defined benefit cost, disaggregation of defined benefit cost into components, recognition of remeasurements in other comprehensive income, plan amendments, curtailments and settlements
- Introduce enhanced disclosures about defined benefit plans
- Modify accounting for termination benefits, including distinguishing benefits provided in exchange for service and benefits provided in exchange for the termination of employment and affect the recognition and measurement of termination benefits
- Clarification of miscellaneous issues, including the classification of employee benefits, current estimates of mortality rates, tax and administration costs and risk-sharing and conditional indexation features
- Incorporate other matters submitted to the IFRS Interpretations Committee.
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