This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Annual Improvements to IFRSs 2009-2011 Cycle [Completed]

Effective date: Annual periods beginning on or after January 1, 2013 with early adoption (on an individual item basis) permitted

Transitional provisions:

The amendments must be applied retrospectively and are effective for annual periods beginning on or after January 1, 2013 with early application (on an individual item basis) permitted

Last updated:

May 2012


Overview

At their meeting on February 27-March 2, 2012, the IASB discussed the seven proposed Improvements to IFRSs from the ED published in June 2011. On the basis of the comments that the Board received from respondents and the recommendations of the IFRIC, the Board decided to finalise six of the seven proposed improvements.

Key Features

Annual Improvements finalized:

Repeated application of IFRS 1

The Board clarified that an entity is required to apply IFRS 1 when the entity’s most recent previous annual financial statements did not contain an explicit and unreserved statement of compliance with IFRSs, even if the entity applied IFRS 1 in a reporting period before the period reported in the most recent previous annual financial statements.

Borrowing costs relating to qualifying assets for which the commencement date for capitalization is before the transition date

The Board clarified that an entity that capitalized borrowing costs in accordance with its previous GAAP before the date of transition to IFRSs may carry forward without adjustment the amount previously capitalized in the opening statement of financial position at the date of transition. In addition, the Board clarified that borrowing costs incurred after the date of transition that relate to qualifying assets under construction at the date of transition should be accounted for in accordance with IAS 23, Borrowing Costs.

Clarification of requirements for comparative information

The Board amended IAS 1 to clarify the requirements for providing comparative information when an entity provides financial statements beyond the minimum comparative information requirements.

The Board also addressed two aspects of the requirements in specific cases where an entity changes accounting policies, or makes retrospective restatements or reclassifications. The changes are:

  1. An entity that changes accounting policies retrospectively, or makes a retrospective restatement or reclassification which has a material effect on the information in the statement of financial position at the beginning of the preceding period would present the statement of financial position at the end of the current period and the beginning and end of the preceding period.

  2. Other than disclosure of certain specified information, related notes are not required to accompany the opening statement of financial position as at the beginning of the preceding period.

Classification of servicing equipment

In IAS 16, Property, Plant and Equipment, the Board clarified that spare parts, stand-by equipment and servicing equipment should be classified as property, plant and equipment when they meet the definition of property, plant and equipment and as inventory otherwise.

Income tax consequences of distributions to holders of an equity instrument, and of transaction costs of an equity transaction

The Board amended IAS 32, Financial Instruments: Presentation, to clarify that income tax relating to distributions to holders of an equity instrument and income tax relating to transaction costs of an equity transaction should be accounted for in accordance with IAS 12, Income Taxes.

Interim financial reporting and segment information for total assets

The Board clarified the requirements in IAS 34, Interim Financial Reporting, relating to segment information for total assets and total liabilities for each reportable segment in order to enhance consistency with the requirements in IFRS 8, Operating Segments.

The amendment clarifies that total assets and total liabilities for a particular reportable segment need to be disclosed in interim financial reporting only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amounts disclosed in the last annual financial statements for that reportable segment.

  • Annual Improvements not finalized:

IAS 1, Presentation of Financial Statements—Changes derived from the Conceptual Framework for Financial Reporting (issued in 2010)

The Board decided to defer proposed amendments to IAS 1 and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.  The Board also decided that these changes should not be part of the annual improvements project, and to consider these matters separately from that project.

Recent activities

May 2012

On May 17, 2012, the IASB issued their Annual Improvements 2009–2011 Cycle, a collection of amendments to IFRSs, in response to six issues addressed during the 2009–2011 cycle, as its latest set of annual improvements.


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.