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Government Loans (Amendments to IFRS 1) [Completed]

Effective date: Annual periods beginning on or after January 1, 2013 with early adoption permitted.

Transitional provisions:

The amendments are effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

Last updated:

March 2012


The amendments add an exception to the retrospective application of IFRSs at the date of transition to IFRSs. This means that first-time adopters do not need to recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant on transition. However, entities may choose to apply the requirements of IFRS 9, Financial Instruments, and IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, to government loans retrospectively if the information needed to do so had been obtained at the time of initially accounting for that loan. These amendments give first-time adopters the same relief as existing preparers of IFRS financial statements.

In January 2012, the IASB deliberated on the comments received on the October 2011 ED. In order to respond to concerns raised from comment letters and to make the Board's intention clear, the Board agreed to limit the scope of the proposed exemption to matters of recognition and measurement, i.e., a first-time adopter of IFRSs will be required to apply IAS 32, Financial Instruments: Presentation to classify the loan as debt or equity. The Board asked the staff to modify the proposed illustrative example to illustrate this point.

Recent activities

March 2012

On March 13, 2012, the IASB issued amendments to IFRS 1, First-time Adoption of International Financial Reporting Standards, which deal with loans received from governments at a below market rate of interest.

Correction list for hyphenation

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