UK adopts IFRS amendments for IBOR Phase 2 and amendments to IFRS 4
07 Jan, 2021
After the end of the transition period on 31 December 2020, the UK ceased to apply EU law. IFRS Standards as adopted by the EU were brought into UK law, meaning that EU-IFRS for UK companies was effectively frozen at that point and a new mechanism for UK adoption of IFRS Standards came into effect.
The Secretary of State for Business, Energy and Industrial Strategy (BEIS), who has been given the power of endorsing and adopting international accounting standards while the UK Endorsement Board (UKEB) is still being established, has now adopted amendments to IFRS Standards for:
- IBOR Phase 2 - Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) which focus on the effects on financial statements when an entity replaces the old interest rate benchmark with an alternative benchmark rate as a consequence of the global regulatory reform of key interbank offered rates (IBORs); and
- amendments to IFRS 4 - Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) which extend the expiry date of the temporary exemption from applying IFRS 9 Financial Instruments from 1 January 2021 to 1 January 2023, to align the effective dates of IFRS 9 with IFRS 17 Insurance Contracts for entities within the scope of the exemption.
The endorsement criteria assessment and adoption statement for IBOR Phase 2 and the endorsement criteria assessment and adoption statement for amendments to IFRS 4 are available on the UK Endorsement Board (UKEB) website.
The UKEB has also updated its adoption statement report which is available on its website here.