These amendments respond to feedback from the 2022 Post-implementation Review of the Accounting Standard and clarify the requirements in areas where stakeholders have raised concerns, or where new issues have emerged since IFRS 9 was issued.

These include:

• Clarifying the classification of financial assets with environmental, social and corporate governance (ESG) and similar features— ESG-linked loan features can influence their measurement at amortized cost or fair value. Stakeholders queried the determination process based on cash flow characteristics. The amendments provide clarity on assessing contractual cash flows to avoid divergence in practices.
• Settlement of liabilities through electronic payment systems— Stakeholders noted difficulties in applying IFRS 9 derecognition rules to settlements via electronic cash transfers. Amendments clarify the derecognition date for financial assets or liabilities. The IASB also plans to create an accounting policy allowing early derecognition of financial liabilities under certain criteria.

With these amendments, the IASB has also introduced additional disclosure requirements to enhance transparency for investors regarding investments in equity instruments designated at fair value through other comprehensive income and financial instruments with contingent features, for example features tied to ESG-linked targets.

The amendments are effective for annual reporting periods beginning on or after January 1, 2026.

Access the press release on the IASB’s website.

The podcast highlights some of the projects that were discussed during the meeting, including:

• Feedback related to exposure draft for financial instruments with characteristics of equity.
• Developments in the post-implementation review of IFRS 9 impairment project

The podcast can be accessed here on the IFRS Foundation website

Below is an analysis of all changes made to the work plan since our last analysis on April 29, 2024

Standard-setting projects

• Business Combinations — Disclosures, Goodwill and Impairment — Exposure draft feedback is now expected in Q4 2024 (previously H2 2024). 
• Subsidiaries without Public Accountability: Disclosures— This project has been removed from the work plan since the IASB issued IFRS 19 on 9 May 2024. 
• Financial Instruments with Characteristics of Equity — The next step in this project is now a decision on the project direction (expected in July 2024).

Maintenance projects

• Amendments to the Classification and Measurement of Financial Instruments—IASB issued amendments on May 30, 2024. 
• Climate-related and Other Uncertainties in the Financial Statements— An exposure draft expected to be published in July 2024 (previously Q3 2024). 
• Power purchase agreements — An exposure draft of proposed amendments was published on May 8, 2024. The project is now in the feedback stage which is expected to start in Q3 2024. 
• Updating the Subsidiaries without Public Accountability: Disclosures Standard — An exposure draft is now expected in July 2024 (previously Q3 2024). 
• Use of a Hyperinflationary Presentation Currency by a Non-hyperinflationary Entity (IAS 21)— An exposure draft is now expected in July 2024 (previously Q3 2024)

Research projects

• Intangible Assets— Review of research is now expected in Q4 2024 (previously H2 2024).
• Post-implementation Review of IFRS 9 — Impairment— A feedback statement is now expected in July 2024 (previously Q3 2024)

Research projects

• IFRS Accounting Taxonomy Update — Primary Financial Statements— A proposed taxonomy update was published on May 23, 2024. The project is now in the feedback stage which is expected to start in the H2 2024.

The above is a faithful comparison of the IASB and ISSB work plan on April 29, 2024, and May 28, 2024, respectively.

For access to the current work plans at any time, please click here.

Under SEC rules, registrants must file certain financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Foreign private issuers, however, are permitted to file financial statements prepared by International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) or by their home country GAAP with reconciliation to U.S. GAAP.

In May 2024, the IASB issued IFRS 19, which permits certain subsidiaries of reporting entities to provide reduced disclosures when applying recognition, measurement and presentation requirements in IFRS Accounting Standards. IFRS 19 also specifies that eligible subsidiaries that elect to use the standard must provide additional material disclosures when it determines that information is necessary to enable financial statement users to understand the impact of transactions, events and conditions on the subsidiary’s financial position and financial performance.

Even though the entity may be eligible to apply IFRS 19 in order to benefit from reduced disclosures, it should carefully consider whether it is nevertheless required to include additional material disclosures from other IFRS Accounting Standards to achieve the objectives of financial reporting given the use of those financial statements in a filing with the SEC.

Access the statement on the SEC’s website.

In IFRS-compliant consolidated financial statements, parent companies require subsidiaries to use IFRS Accounting Standards for reporting. However, subsidiaries can opt for IFRS, IFRS for SMEs, or national standards for their records. This often leads to maintaining two accounting record sets due to differing requirements. Subsidiaries using IFRS for their own financial statements may provide disclosures disproportionate to user needs.

IFRS 19 will:

• Enable subsidiaries to keep only one set of accounting records―to meet the needs of both their parent company and the users of their financial statements and
• Reduce disclosure requirements―IFRS 19 permits reduced disclosures that are better suited to the needs of the users of their financial statements.

Subsidiaries can apply for IFRS 19 if they do not have public accountability and their parent company applies IFRS Accounting Standards in their consolidated financial statements. A subsidiary does not have public accountability if it does not have equities or debt listed on a stock exchange and does not hold assets in a fiduciary capacity for a broad group of outsiders.

Access the press release on the IASB’s website.

The proposals amend IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. The IASB’s swift action responds to the rapidly growing global market for these contracts.

Renewable electricity contracts aim to ensure a stable supply of renewable energy, but their reliance on natural factors makes supply consistency challenging. These contracts typically mandate buyers to purchase the generated electricity regardless of their demand at production time. This, along with the unique market characteristics, creates accounting difficulties, particularly for long-term contracts.

To address these challenges, the IASB proposes some targeted changes to the accounting for contracts with specified characteristics. The proposals would:

• address how the ‘own-use’ requirements would apply;
• permit hedge accounting if these contracts are used as hedging instruments and
• add disclosure requirements to enable investors to understand the effects of these contracts on a company’s financial performance and future cash flows.

Access the press release on the IASB’s website.

The podcast highlights some of the projects that were discussed during the meeting, including:

• Start of a thorough review concerning intangible assets
• Developments within the climate-related and other uncertainties in the financial statements project
• Finalization of the agenda decision pertaining to net-zero commitments
• Insights into the ongoing post-implementation reviews of IFRS 15 and IFRS

The podcast can be accessed here on the IFRS Foundation website

Below is an analysis of all changes made to the work plan since our last analysis on March 23, 2024

Standard-setting projects

• Equity Method — An exposure draft is expected in Q3 2024 (previously H2 2024)
• Management Commentary — A decision on the project direction is now expected in June 2024 (previously Q2 2024)
• Primary Financial Statements — This project has been removed from the work plan since the issuance of IFRS 18 Presentation and Disclosures in Financial Statements on April 9

Maintenance projects

• Annual improvements to IFRS Accounting Standards — The following now have the final amendment to be issued in July 2024 (previously Q3 2024):
• Cost Method (Amendments to IAS 7) 
• Derecognition of Lease Liabilities (Amendments to IFRS 9) 
• Determination of a ‘De Facto Agent’ (Amendments to IFRS 10) 
• Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7) 
• Gain or Loss on Derecognition (Amendments to IFRS 7) 
• Hedge Accounting by a First-time Adopter (Amendments to IFRS 1) 
• Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7) 
• Transaction Price (Amendments to IFRS 9)
• Climate-related and Other Uncertainties in the Financial Statements — The next project step will now be an exposure draft expected to be published in Q3 2024.

Governance projects

• ISSB Consultation on Agenda Priorities — A feedback statement is now expected in June 2024 (previously Q2 2024)

Research projects

• Business Combinations under Common Control — This project has been removed from the work plan since the IASB completed it by publishing a project summary on April 17, 2024
• Intangible Assets — This project has been added to the work plan and a review of the research is expected in H2 2024 
• Post-implementation Review of IFRS 15 — Revenue from Contracts with Customers — A feedback statement is now expected in Q3 2024 (previously H2 2024).

Other projects

• IFRS Accounting Taxonomy Update: The following projects were removed from work plan since the release of the update on March 27:
• Amendments to IAS 12, IAS 21, IAS 7 and IFRS 7
• Common Practice (Financial Instruments) and General Improvements
• IFRS Accounting Taxonomy Update — Primary Financial Statements — A proposed IFRS Taxonomy Update is expected in May 2024 (previously Q2 2024)
• IFRS Accounting Taxonomy Update — Subsidiaries without Public Accountability: Disclosure and Amendments to IFRS 7 and IFRS 9 — A proposed IFRS Taxonomy Update is expected in Q3 2024 (previously H2 2024)
• IFRS Sustainability Disclosure Taxonomy — This project has been removed from the work plan since the ISSB published the disclosure taxonomy in April 2024.

The above is a faithful comparison of the IASB and ISSB work plan on March 26, 2024 and April 29, 2024

For access to the current work plan at any time, please click here.

Below is an analysis of all changes made to the work plan since our last analysis on March 23, 2024

Standard-setting projects

• Equity Method — An exposure draft is expected in Q3 2024 (previously H2 2024)
• Management Commentary — A decision on the project direction is now expected in June 2024 (previously Q2 2024)
• Primary Financial Statements — This project has been removed from the work plan since the issuance of IFRS 18 Presentation and Disclosures in Financial Statements on April 9

Maintenance projects

• Annual improvements to IFRS Accounting Standards — The following now have the final amendment to be issued in July 2024 (previously Q3 2024):
• Cost Method (Amendments to IAS 7) 
• Derecognition of Lease Liabilities (Amendments to IFRS 9) 
• Determination of a ‘De Facto Agent’ (Amendments to IFRS 10) 
• Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7) 
• Gain or Loss on Derecognition (Amendments to IFRS 7) 
• Hedge Accounting by a First-time Adopter (Amendments to IFRS 1) 
• Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7) 
• Transaction Price (Amendments to IFRS 9)
• Climate-related and Other Uncertainties in the Financial Statements — The next project step will now be an exposure draft expected to be published in Q3 2024

Governance projects

• ISSB Consultation on Agenda Priorities — A feedback statement is now expected in June 2024 (previously Q2 2024)

Research projects

• Business Combinations under Common Control — This project has been removed from the work plan since the IASB completed it by publishing a project summary on April 17, 2024
• Intangible Assets — This project has been added to the work plan and a review of the research is expected in H2 2024
• Post-implementation Review of IFRS 15 — Revenue from Contracts with Customers — A feedback statement is now expected in Q3 2024 (previously H2 2024).

Other projects

• IFRS Accounting Taxonomy Update: The following projects were removed from work plan since the release of the update on March 27:
• Amendments to IAS 12, IAS 21, IAS 7 and IFRS 7
• Common Practice (Financial Instruments) and General Improvements
• IFRS Accounting Taxonomy Update — Primary Financial Statements — A proposed IFRS Taxonomy Update is expected in May 2024 (previously Q2 2024)
• IFRS Accounting Taxonomy Update — Subsidiaries without Public Accountability: Disclosure and Amendments to IFRS 7 and IFRS 9 — A proposed IFRS Taxonomy Update is expected in Q3 2024 (previously H2 2024)
• IFRS Sustainability Disclosure Taxonomy — This project has been removed from the work plan since the ISSB published the disclosure taxonomy in April 2024.

The above is a faithful comparison of the IASB and ISSB work plan on March 26, 2024 and April 29, 2024

For access to the current work plan at any time, please click here.

The proposed amendments aim to improve financial reporting, particularly for business combinations, focusing significantly on disclosure enhancements and simplifying impairment tests.

It will also affect how entities perform goodwill impairment assessments, directing entities to do so at the lowest level monitored by management for the related business. This should prevent the automatic assignment of goodwill to operating segments, which may result in allocating goodwill to more cash-generating units (CGUs). This may lead to increased effort if additional impairment assessments are needed for multiple CGUs that have been allocated goodwill.

The objective of the IASB’s proposals is to:

• increase the qualitative information provided about business combinations.
• simplify and reduce the costs associated with performing the quantitative impairment test.
• improve the effectiveness of the impairment test.

Access the press release and the exposure draft on the AcSB’s website.