EU formally adopts amendments to IFRS 1
The European Union has published a Commission Regulation endorsing the amendments to IFRS 1 regarding government loans published by the IASB on 13 March 2012.
The European Union has published the Commission Regulation (EC) No 183/2013 of 4 March 2013 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 5 Mach 2013. This means that the amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards published by the IASB on 13 March 2012 have now been incorporated into European law.
This amendment addresses how a first-time adopter would account for a government loan with a below-market rate of interest when transitioning to IFRSs. It also adds an exception to the retrospective application of IFRS, which provides the same relief to first-time adopters granted to existing preparers of IFRS financial statements when the requirement was incorporated into IAS 20 in 2008.
The amendments to IFRS 1 must be applied, at latest, to annual periods beginning on or after 1 January 2013.