Annual Improvements to IFRSs 2011-2013 Cycle [Completed]

Effective date and transitional provisions:

The amendments apply prospectively for annual periods beginning on or after  July 1, 2014 with earlier application permitted on an individual item basis.

Last updated:

December 2013


The standard is a collection of amendments to IFRSs in response to four issues addressed during the 2011–2013 cycle.  These amendments result from proposals that were contained in the IASB’s ED published in November 2012.

The four IFRSs affected are:

IFRS 1, First-time Adoption of International Financial Reporting Standards

Clarification of the meaning of “effective IFRSs”

The Board clarified that an entity, in its first IFRS financial statements, has the choice between applying an existing and currently effective IFRS and applying early a new or revised IFRS that is not yet mandatorily effective, provided that the new or revised IFRS permits early application. An entity is required to apply the same version of the IFRS throughout the periods covered by those first IFRS financial statements. 

IFRS 3, Business Combinations

Clarification of the scope exemption for joint ventures

The Board amended IFRS 3 to exclude from its scope the accounting for the formation of all types of joint arrangements as defined in IFRS 11 Joint Arrangements, including those involving the contribution of a business to a joint arrangement, and clarifies that the scope exclusion in paragraph 2(a) of IFRS 3 only addresses the accounting in the financial statements of the joint venture or the joint operation itself, and not the accounting by the parties to the joint arrangement for their interests in the joint arrangement. 

IFRS 13, Fair Value Measurement

Clarification of the scope of the portfolio exception

The Board clarified that the portfolio exception in paragraph 52 of IFRS 13 applies to all contracts accounted for within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, even if they do not meet the definition of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation, such as certain contracts to buy or sell non-financial items that can be settled net in cash or another financial instrument. 

IAS 40, Investment Property

Clarification of the interrelationship between IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property

The Board clarified that IFRS 3 and IAS 40 are not mutually exclusive. Determining whether a specific transaction meets the definition of a business combination as defined in IFRS 3 requires judgement based on the guidance in IFRS 3. Determining whether or not property is owner-occupied property or investment property requires application of paragraphs 7-15 of IAS 40.

Other developments

December 2013

On December 12, 2013, the IASB issued its final standard entitled Annual Improvements 2011-2013 Cycle.

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