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2017

Preparer’s guide to the IFRS Taxonomy

15 Dec 2017

The IFRS Foundation has released 'Using the IFRS Taxonomy—A preparer’s guide' to help companies understand the IFRS Taxonomy content.

The IFRS Foundation points out that the IFRS Taxonomy facilitates the digital creation and consumption of financial information and improves investors’ access to financial information by listing and defining specific codes, or elements, that can be used to tag items of data.

For the years 2017-2021 the IASB has chosen "Better communication" as its central theme, and in addition to the primary financial statements project and the disclosure initiative this also includes the IFRS Taxonomy. This guide is therefore intended to support the use of the IFRS Taxonomy around the world by regulators, companies and other users of financial information.

Please click to access the guide on the IASB website.

 

New Trustees of the IFRS Foundation appointed, Chair Michel Prada continues in his post for the time being

14 Dec 2017

The IFRS Foundation announces that it has appointed seven new Trustees, but that the identification of a successor of the Chair of the Trustees has taken longer than anticipated and therefore Michel Prada has agreed to remain in place until the appointment process is completed.

The following seven new Trustees have been appointed for three-year terms beginning on 1 January 2017:

  • Dame Colette Bowe
  • Larry Leva Global
  • Michel Madelain
  • Ross McInnes
  • Vinod Rai
  • Lucrezia Reichlin
  • Teresa Ko

In addition, Sheila Fraser’s term as Vice-Chair has been extended until December 2019, and Takafumi Sato replaces Ronald Arculli as the second vice-chair from 1 January 2018, following Mr Arculli’s retirement as a Trustee at the end of 2017.

For more information, please see the press release on the IASB website.

FRC publishes the results of its audit quality thematic review on materiality

13 Dec 2017

The Financial Reporting Council (FRC) has published the results of its audit quality thematic review on materiality.

The FRC’s Audit Quality Review team visited eight audit firms to review their audit methodology and guidance in respect of materiality. They also reviewed relevant aspects of the audit procedures performed on 32 audits in a variety of sectors during those visits.

Additionally the FRC gathered the views of Audit Committee Chairs and of investors with respect to materiality. The FRC held discussions with a sample of Audit Committee Chairs to both seek their views on materiality and also understand their interaction with auditors or prospective auditors on materiality at various stages of the audit and, where relevant, the tender process. With respect to investors the FRC held roundtables to understand their views on materiality and whether it informs their investment decisions.

The FRC assessed how:

  • materiality is assessed across the financial statements as a whole (overall materiality);
  • the auditor reduces to an appropriately low level the probability that the aggregate of misstatements identified through their audit work exceeds overall materiality (performance materiality);
  • materiality is assessed for entities or business activities included within the financial statements (component materiality); and
  • materiality is assessed for particular classes of transactions, account balances or disclosures (also performance materiality).

While the review does indicate that the majority of key messages from their last review have been addressed, the report includes an updated overview of findings and key messages for both audit firms and audit committees.

Key findings and messages for audit firms include:

  • Audit firms have taken on board the messages from the last report demonstrated by an increased the emphasis within their methodologies on the application of judgement when determining overall materiality and performance materiality, developing industry-specific guidance for many sectors and consideration of risk in setting performance materiality.
  • Audit firms should ensure that if adjusted profit is used as a benchmark, they explain why the adjustments were made and how the benchmark selected better responds to the needs of the users of the financial statements.
  • Audit firms should provide audit teams with guidance on setting component materiality including how to incorporate size of the component and risk within the assessment.
  • Performance materiality should be better explained by audit firms in their reports.
  • Audit firms should include guidance in their methodologies to audit teams regarding materiality judgments when an entity is loss making as there is little or no guidance in this area.
  • Audit firms should consider whether a lower performance materiality is appropriate for first year audits, given the increased risks associated with these audits and determine whether guidance in this area should be mandated.

Key findings and messages for audit committees include:

  • Audit committees should understand and challenge the judgments underlying the setting of materiality and how it affects the audit work performed.
  • Ensure the component materiality is properly explained and justified to them by the auditor.
  • Consider how best to engage with investors on materiality and adjusted and unadjusted differences.

The report also raises areas for standard setters and investors to consider. With respect to standard setters the report indicates that they should “be aware” of the recent developments in the practice of setting materiality including the use of forecasts as benchmarks. The report indicates that standard setters might wish to develop some guidance in this area for auditors.   The report also highlights that standard setters should also consider whether auditors would benefit from guidance regarding setting component materiality and how it relates to overall materiality and the impact that it has on the audit work performed.

The press release and full thematic review are available on the FRC website.

Video recording of panel discussion with Chairs of IASB, FASB, and AcSB

13 Dec 2017

The Canadian Accounting Standards Board (AcSB) has made available a video recording of a panel discussion at the November 2017 IFRS Conference: Americas featuring Hans Hoogervorst, Russ Golden, and Linda Mezon.

Topics discussed included the global financial reporting landscape, how the world has changed in recent years, the future for US GAAP/IFRS convergence, and how financial accounting fits with a broader reporting framework.

The video recording of the panel discussion (approx. one hour) is available on the AcSB website.

FRC Lab report notes digital future of corporate reporting

13 Dec 2017

A new report from the Financial Reporting Lab of the Financial Reporting Council (FRC) concludes that XBRL (eXtensible Business Reporting Language) is an important technology in the path to digitisation of company reporting.

The Lab considered how XBRL could be used in the production, distribution and consumption of listed company annual reports. The Lab identified gaps between the characteristics that users and preparers desired from digital reporting and the expected implementation of XBRL for listed company reporting. To close these gaps, the report recommends a series of actions for regulators, technology companies, preparers and investors and notes:

We are at a turning point for the use of technology in corporate reporting. The paper-based way of reporting is likely to change with the European requirement to prepare digital financial information by 2020. The changing demands of users, supported by upcoming regulatory changes mean that boards can no longer ignore digitisation of listed company reporting. This report urges all those involved in corporate reporting to help shape the future.

Please click to access the press release and report on the FRC website.

IASB concludes the 2015-2017 annual improvements cycle

12 Dec 2017

The IASB has issued 'Annual Improvements to IFRS Standards 2015–2017 Cycle'. The pronouncement contains amendments to four International Financial Reporting Standards (IFRSs) as result of the IASB's annual improvements project.

Annual Improvements to IFRS Standards 2015–2017 Cycle makes amendments to the following standards:

IFRS Subject of amendment

IFRS 3 Business Combinations and IFRS 11 Joint Arrangements

The amendments to IFRS 3 clarify that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business. 

IAS 12 Income Taxes

The amendments clarify that the requirements in the former paragraph 52B (to recognise the income tax consequences of dividends where the transactions or events that generated distributable profits are recognised) apply to all income tax consequences of dividends by moving the paragraph away from paragraph 52A that only deals with situations where there are different tax rates for distributed and undistributed profits.

IAS 23 Borrowing Costs The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings.

The Amendments to IFRS 3 and IFRS 11 were originally included in Exposure Draft ED/2016/1 Definition of a Business and Accounting for Previously Held Interests. However, the Board believed that these amendments meet the criteria for annual improvements and therefore included them in this cycle.

Furthermore, the Exposure Draft ED/2017/1 Annual Improvements to IFRS Standards 2015-2017 Cycle included amendments to IAS 28 regarding long-term interests in an associate or joint venture. Those amendments have been finalised separately as a narrow-scope amendment to IAS 28.

The amendments published today are all effective for annual periods beginning on or after 1 January 2019.

Please click for the following additional information:

IASB posts webcast on IFRS 17

12 Dec 2017

The IASB has posted a webcast on the transition requirements in IFRS 17 'Insurance Contracts'.

The new webcast is available on the IASB website in two parts - an overview as first part and a deep dive as second. It is part of a series on the implementation of IFRS 17. Earlier webcasts and webinars on IFRS 17 are available through an archive.

EFRAG TEG appointments and reappointments

11 Dec 2017

The Board of the European Financial Reporting Advisory Group (EFRAG) has announced the appointment of Emmanuelle Guyomard and Jed Wrigley to its Technical Experts Group (TEG).

In addition, EFRAG has reappointed Nicklas Grip as EFRAG TEG Vice-Chairman and reappointed the following members: Ana Cortez, Guenther Gebhardt, Heinz Hense, Soren Kok Olsen, and Andrew Spooner. The EFRAG TEG composition becomes effective on 1 April 2018.

For more information, see the press release on the EFRAG’s website.

New and revised pronouncements as at 31 December 2017

11 Dec 2017

Our popular summary of new and revised financial reporting requirements, updated for financial reporting periods ending on 31 December 2017. This listing can be used to perform a quick check that new financial reporting requirements such as new and revised accounting standards and interpretations, and amendments to standards and interpretations, have been fully considered in the reporting close process. The information below can also be used to assist with the disclosure requirements under paragraph 30 of IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors', which requires entities to disclose any new IFRSs that are in issue but not yet effective and which are likely to impact the entity.

This table can be used for all annual accounting periods. A 1st quarter ending on 31 December 2017 would mean that the annual reporting period began on 1 October 2017. Similarly, 2nd quarters ending on 31 December 2017 refer to annual periods that began on 1 July 2017, 3rd quarters ending on 31 December 2017 refer to annual periods that began on 1 April 2017, and 4th quarters ending on 31 December 2017 refer to annual periods that began on 1 January 2017.

The information below reflects developments to 27 February 2018 and will be updated through to March 2018 to reflect new and revised financial reporting requirements that need to be considered for financial reporting periods ending on 31 December 2017. For accounts approved after December 2017, please also refer to subsequent versions of this document for any new and revised IFRSs that have additionally been issued that might require disclosure in the accounts under IAS 8:30.

The information below is organised as follows:

 

Summary

Pronouncements applicable to entities applying IFRSs at the IASB effective dates

The table below provides a summary of the pronouncements which will be mandatorily applied by entities for the first time at 30 September 2017, for various quarterly reporting periods:

Pronouncement Effective date* Mandatory at 31 December 2017?
1st qtrs 2nd qtrs 3rd qtrs Full yrs
AMENDMENTS
Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)
1 January 2017 Yes Yes Yes Yes
Disclosure Initiative (Amendments to IAS 7)
1 January 2017 Yes Yes Yes Yes
Annual Improvements to IFRS Standards 2014–2016 Cycle – Amendments to IFRS 12
1 January 2017 Yes Yes Yes Yes

* Generally annual periods beginning on or after the date indicated, may only apply to first-time adopters in some limited cases (see the detailed information for each pronouncement below for full details).

More information about these pronouncements, and all new and revised pronouncements, is set out below.

 

Financial statement considerations in adopting new and revised pronouncements

Where new and revised pronouncements are applied for the first time, there can be consequential impacts on annual financial statements, including:

  • Impact of transitional provisions. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors contains a general requirement that changes in accounting policies are retrospectively applied, but this does not apply to the extent an individual pronouncement has specific transitional provisions.
  • Disclosures about changes in accounting policies. Where an entity changes its accounting policy as a result of the initial application of an IFRS and it has an effect on the current period or any prior period, IAS 8 requires the disclosure of a number of matters, e.g. the title of the IFRS, the nature of the change in accounting policy, a description of the transitional provisions, and the amount of the adjustment for each financial statement line item affected
  • Third statement of financial position. IAS 1 Presentation of Financial Statements requires the presentation of a third statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements in a number of situations, including if an entity applies an accounting policy retrospectively and the retrospective application has a material effect on the information in the statement of financial position at the beginning of the preceding period
  • Earnings per share (EPS). Where applicable to the entity, IAS 33 Earnings Per Share requires basic and diluted EPS to be adjusted for the impacts of adjustments result from changes in accounting policies accounted for retrospectively and IAS 8 requires the disclosure of the amount of any such adjustments.

Whilst disclosures associated with changes in accounting policies resulting from the initial application of new and revised pronouncements are less in interim financial reports under IAS 34 Interim Financial Reporting, some disclosures are required, e.g. description of the nature and effect of any change in accounting policies and methods of computation.

 

New or revised standards


IFRS 9 Financial Instruments (2009)

IFRS 9 introduces new requirements for classifying and measuring financial assets, as follows:

  • Debt instruments meeting both a 'business model' test and a 'cash flow characteristics' test are measured at amortised cost (the use of fair value is optional in some limited circumstances)
  • Investments in equity instruments can be designated as 'fair value through other comprehensive income' with only dividends being recognised in profit or loss
  • All other instruments (including all derivatives) are measured at fair value with changes recognised in the profit or loss
  • The concept of 'embedded derivatives' does not apply to financial assets within the scope of the Standard and the entire instrument must be classified and measured in accordance with the above guidelines.

* IFRS 9 (2014) was issued on 24 July 2014 and supersedes IFRS 9 (2009), but this version of the standard remains available for application if the relevant date of initial application is before 1 February 2015.

Issued: 12 November 2009

Effective date:

No stated effective date (see notes above)

 

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRS 9 Financial Instruments (2010)

A revised version of IFRS 9 incorporating revised requirements for the classification and measurement of financial liabilities, and carrying over the existing derecognition requirements from IAS 39 Financial Instruments: Recognition and Measurement.

The revised financial liability provisions maintain the existing amortised cost measurement basis for most liabilities. New requirements apply where an entity chooses to measure a liability at fair value through profit or loss – in these cases, the portion of the change in fair value related to changes in the entity's own credit risk is presented in other comprehensive income rather than within profit or loss.

* IFRS 9 (2014) was issued on 24 July 2014 and supersedes IFRS 9 (2010), but this version of the standard remains available for application if the relevant date of initial application is before 1 February 2015.

Issued: 28 October 2010

Effective date:

No stated effective date (see notes above)

 

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) (2013)

A revised version of IFRS 9 which:

  • Introduces a new chapter to IFRS 9 on hedge accounting, putting in place a new hedge accounting model that is designed to be more closely aligned with how entities undertake risk management activities when hedging financial and non-financial risk exposures
  • Permits an entity to apply only the requirements introduced in IFRS 9 (2010) for the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss without applying the other requirements of IFRS 9, meaning the portion of the change in fair value related to changes in the entity's own credit risk can be presented in other comprehensive income rather than within profit or loss
  • Removes the mandatory effective date of IFRS 9 (2013), IFRS 9 (2010) and IFRS 9 (2009), leaving the effective date open pending the finalisation of the impairment and classification and measurement requirements. Notwithstanding the removal of an effective date, each standard remains available for application*.

* IFRS 9 (2014) was issued on 24 July 2014 and supersedes IFRS 9 (2013), but this version of the standard remains available for application if the relevant date of initial application is before 1 February 2015.

Issued: 19 November 2013

Effective date:

No stated effective date (see notes above)

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRS 9 Financial Instruments (2014)

A finalised version of IFRS 9 which contains accounting requirements for financial instruments, replacing IAS 39 Financial Instruments: Recognition and Measurement. The standard contains requirements in the following areas:

  • Classification and measurement. Financial assets are classified by reference to the business model within which they are held and their contractual cash flow characteristics. The 2014 version of IFRS 9 introduces a 'fair value through other comprehensive income' category for certain debt instruments. Financial liabilities are classified in a similar manner to under IAS 39, however there are differences in the requirements applying to the measurement of an entity's own credit risk.
  • Impairment. The 2014 version of IFRS 9 introduces an 'expected credit loss' model for the measurement of the impairment of financial assets, so it is no longer necessary for a credit event to have occurred before a credit loss is recognised
  • Hedge accounting. Introduces a new hedge accounting model that is designed to be more closely aligned with how entities undertake risk management activities when hedging financial and non-financial risk exposures
  • Derecognition. The requirements for the derecognition of financial assets and liabilities are carried forward from IAS 39.

Note: Depending on the chosen approach to applying IFRS 9, the transition can involve one or more than one date of initial application for different requirements.

Note: IFRS 9 (2014) supersedes IFRS 9 (2009), IFRS 9 (2010) and IFRS 9 (2013), but these standards remain available for application if the relevant date of initial application is before 1 February 2015.

Issued: 24 July 2014

Effective date:

Effective for annual periods beginning on or after 1 January 2018

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRS 15 Revenue from Contracts with Customers

IFRS 15 provides a single, principles based five-step model to be applied to all contracts with customers.

The five steps in the model are as follows:

  • Identify the contract with the customer
  • Identify the performance obligations in the contract
  • Determine the transaction price
  • Allocate the transaction price to the performance obligations in the contracts
  • Recognise revenue when (or as) the entity satisfies a performance obligation.

Guidance is provided on topics such as the point in which revenue is recognised, accounting for variable consideration, costs of fulfilling and obtaining a contract and various related matters. New disclosures about revenue are also introduced.

Issued: 28 May 2014

Effective date:

Applicable to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2018

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRS 16 Leases

IFRS 16 specifies how an IFRS reporter will recognise, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17.

Issued: 13 January 2016

Effective date:

Applicable to annual reporting periods beginning on or after 1 January 2019

First quarters ending 31 December 2017:

Optional

Second quartersending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRS 17 Insurance Contracts

IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. IFRS 17 supersedes IFRS 4 Insurance Contracts as of 1 January 2021.

Issued: 18 May 2017

Effective date:

Applicable to annual reporting periods beginning on or after 1 January 2021

Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


 

 

New or revised interpretations


IFRIC 22 Foreign Currency Transactions and Advance Consideration

The interpretation addresses foreign currency transactions or parts of transactions where:

  • there is consideration that is denominated or priced in a foreign currency;
  • the entity recognises a prepayment asset or a deferred income liability in respect of that consideration, in advance of the recognition of the related asset, expense or income; and
  • the prepayment asset or deferred income liability is non-monetary.

The Interpretations Committee came to the following conclusion:

  • The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.
  • If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.

Issued: 8 December 2016

Effective date:

Applicable to annual reporting periods beginning on or after 1 January 2018

Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


IFRIC 23 Uncertainty over Income Tax Treatments

The interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. It specifically considers:

  • Whether tax treatments should be considered collectively
  • Assumptions for taxation authorities' examinations
  • The determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
  • The effect of changes in facts and circumstances

Issued: 7 June 2017

Effective date:

Applicable to annual reporting periods beginning on or after 1 January 2019

Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


 

 

Amendments


Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)

Amends IAS 12 Income Taxes to clarify the following aspects:

  • Unrealised losses on debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the debt instrument's holder expects to recover the carrying amount of the debt instrument by sale or by use.
  • The carrying amount of an asset does not limit the estimation of probable future taxable profits.
  • Estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences.
  • An entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law restricts the utilisation of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax assets of the same type.

Issued: 19 January 2016

Effective date:

Effective for annual periods beginning on or after 1 January 2017

First quarters ending 31 December 2017:

Mandatory

Second quarters ending 31 December 2017:

Mandatory

Third quarters ending 31 December 2017:

Mandatory

Annual periods ending 31 December 2017:

Mandatory


Disclosure Initiative (Amendments to IAS 7)

Amends IAS 7 Statement of Cash Flows to clarify that entities shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities.

Issued: 29 January 2016

Effective date:

Effective for annual periods beginning on or after 1 January 2017

First quarters ending 31 December 2017:

Mandatory

Second quarters ending 31 December 2017:

Mandatory

Third quarters ending 31 December 2017:

Mandatory

Annual periods ending 31 December 2017:

Mandatory


Clarifications to IFRS 15 'Revenue from Contracts with Customers'

Amends IFRS 15 Revenue from Contracts with Customers to clarify three aspects of the standard (identifying performance obligations, principal versus agent considerations, and licensing) and to provide some transition relief for modified contracts and completed contracts.

Issued: 12 April 2016

Effective date:

Effective for annual periods beginning on or after 1 January 2018

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)

Amends IFRS 2 Share-based Payment to clarify the standard in relation to the accounting for cash-settled share-based payment transactions that include a performance condition, the classification of share-based payment transactions with net settlement features, and the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

Issued: 20 June 2016

Effective date:

Effective for annual periods beginning on or after 1 January 2018

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4)

Amends IFRS 4 Insurance Contracts provide two options for entities that issue insurance contracts within the scope of IFRS 4:

  • an option that permits entities to reclassify, from profit or loss to other comprehensive income, some of the income or expenses arising from designated financial assets; this is the so-called overlay approach;
  • an optional temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts within the scope of IFRS 4; this is the so-called deferral approach.

The application of both approaches is optional and an entity is permitted to stop applying them before the new insurance contracts standard is applied.

Issued: 12 September 2016

Effective date:

Overlay approach to be applied when IFRS 9 is first applied. Deferral approach effective for annual periods beginning on or after 1 January 2018 and only available for three years after that date.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Transfers of Investment Property (Amendments to IAS 40)

The amendments to IAS 40 Investment Property:

  • Amends paragraph 57 to state that an entity shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the definition of investment property. A change in management’s intentions for the use of a property by itself does not constitute evidence of a change in use.
  • The list of examples of evidence in paragraph 57(a) – (d) is now presented as a non-exhaustive list of examples instead of the previous exhaustive list.

Issued: 8 December 2016

Effective date:

Effective for annual periods beginning on or after 1 January 2018
Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Annual Improvements to IFRS Standards 2014–2016 Cycle

Makes amendments to the following standards:

  • IFRS 1 - Deletes the short-term exemptions in paragraphs E3–E7 of IFRS 1, because they have now served their intended purpose
  • IFRS 12 - Clarifies the scope of the standard by specifying that the disclosure requirements in the standard, except for those in paragraphs B10–B16, apply to an entity’s interests listed in paragraph 5 that are classified as held for sale, as held for distribution or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
  • IAS 28 - Clarifies that the election to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition

Issued: 8 December 2016

Effective date:

The amendments to IFRS 1 and IAS 28 are effective for annual periods beginning on or after 1 January 2018, the amendment to IFRS 12 for annual periods beginning on or after 1 January 2017

First quarters ending 31 December 2017:

Mandatory for IFRS 12; optional for IFRS 1 and IAS 28

Second quarters ending 31 December 2017:

Mandatory for IFRS 12; optional for IFRS 1 and IAS 28

Third quarters ending 31 December 2017:

Mandatory for IFRS 12; optional for IFRS 1 and IAS 28

Annual periods ending 31 December 2017:

Mandatory for IFRS 12; optional for IFRS 1 and IAS 28


Prepayment Features with Negative Compensation (Amendments to IFRS 9)

Amends the existing requirements in IFRS 9 regarding termination rights in order to allow measurement at amortised cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative compensation payments.

Issued: 12 October 2017

Effective date:

Annual periods beginning on or after 1 January 2019
Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)

Clarifies that an entity applies IFRS 9 Financial Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied.

Issued: 12 October 2017

Effective date:

Annual periods beginning on or after 1 January 2019
Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Annual Improvements to IFRS Standards 2015–2017 Cycle

Makes amendments to the following standards:

  • IFRS 3 and IFRS 11 - The amendments to IFRS 3 clarify that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.
  • IAS 12 - The amendments clarify that all income tax consequences of dividends (i.e. distribution of profits) should be recognised in profit or loss, regardless of how the tax arises.
  • IAS 23 - The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings.

Issued: 12 December 2017

Effective date:

Annual periods beginning on or after 1 January 2019
Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)

The amendments in Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) are:

  • If a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement.
  • In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling.

Issued: 7 February 2018

Effective date:

Annual periods beginning on or after 1 January 2019
Not yet endorsed for use in the EU.

First quarters ending 31 December 2017:

Optional

Second quarters ending 31 December 2017:

Optional

Third quarters ending 31 December 2017:

Optional

Annual periods ending 31 December 2017:

Optional


Editorial Corrections (various)

The IASB periodically issues Editorial Corrections and changes to IFRSs and other pronouncements. Since the beginning of calendar 2013, such corrections have been made in March 2013, September 2013, November 2013, March 2014, September 2014, December 2014, March 2015, April 2015, September 2015, December 2015, March 2016, May 2016, September 2016, December 2016, September 2017, and November 2017.

Note: For details of these editorial corrections, see our IASB editorial corrections page.

Effective date:

As minor editorial corrections, these changes are effectively immediately applicable under IFRS


 

Financial Reporting Lab calls for participants for its new project on the reporting of performance metrics

08 Dec 2017

The Financial Reporting Lab ("the Lab") is calling for participants for its new project on the reporting of performance metrics.

Investors, analysts and companies of all sizes are invited to participate in the project.

The project, which follows earlier Lab reports on business models and risk and viability, will explore how companies measure performance against their strategic objectives. The project will take into consideration both financial and non-financial metrics and will explore how these measures can be presented in a way that is most useful to investor decision-making.

Further information including the press release is available on the FRC’s website.

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.