April

Finance for the Future Awards – now in their 10th year – open for entries

08 Apr, 2022

The Finance for the Future Awards 2022 are now open for entries to all organisations, globally, whether listed, small, charities, a social enterprise or public sector, and to individuals who drive change in this area.

One of the awards is for ‘Communicating integrated thinking’, and is open to organisations that are demonstrating clearly, through communicating to their providers of financial capital, how sustainability is embedded into their overall strategy and decision making process, and how this integrated thinking is contributing to a sustainable business model which delivers long-term value.

Other categories recognise organisations who embed an integrated approach into their decision making; innovative projects; organisations who are leading change to the financial markets; and individuals who drive change through education, training and academia. The judges will be also be recognising examples of exceptional climate leadership across finalists from all categories.

Founded by Institute of Chartered Accountants in England and Wales (ICAEW) and Accounting for Sustainability (A4S), and in partnership with Deloitte, these global awards recognise financial leadership in driving sustainable economies.

The 2021 finalists included Britvic (UK), Salesforce (US), Acciona (Spain) and Globalance (Switzerland).

Find out more information about the awards, including details on the judging process and how to enter (by 27 May), as well as case studies of last year’s winners at www.financeforthefuture.org

FRC publishes its 3-year Plan and Budget for 2022-25

08 Apr, 2022

The Financial Reporting Council (FRC) has published its 3-year plan and budget for 2022-2025

The 3-Year Plan sets out the FRC’s progress towards establishing the new Audit, Reporting and Governance Authority (ARGA). Respondents to the FRC’s consultation expressed continued support for the establishment of ARGA.  
 
In setting out the plan, the FRC have considered how, and when additional capacity will be required to adapt to new powers and responsibilities. The plan comprises a detailed breakdown of the FRC’s intended expenditure for 2022-23, alongside a summary of expected costs and headcount for the following two years.  Overall, the FRC expects its headcount to increase in 2022/23 from the current budgeted number of 417 at March 2022, to 486 at March 2023, with similar growth forecast in 2023/24 followed by smaller growth in 2024/25.

To support the FRC’s plan and act in the public interest the FRC’s core objectives are to:

  • Set high standards in corporate governance and stewardship, corporate reporting, auditing and actuarial work, and assess the effectiveness of the application of those standards, enforcing them proportionately where it is in the public interest.
  • Promote improvements and innovation in the areas for which we are responsible, exploring good practice with a wide range of stakeholders.
  • Influence international standards and share best practice through membership of a range of global and regional bodies and incorporate appropriate standards into the UK regulatory framework
  • Promote a more resilient audit market through greater competition and choice.
  • Transform the organisation into a new robust, independent, and high-performing regulator, acting in the public interest

More detailed strategic priorities for 2022/23 for each of the FRC's four divisions - Regulatory Standards, Supervision, Enforcement and Corporate Services - are as follows:  

Regulatory Standards and Codes

  • Development and maintenance of standards and codes, including the periodic review of FRS 102, adoption of ISA (UK) 500 and ISA (UK) 600, and post-implementation review and revision of technical actuarial standards.
  • Alignment of its Corporate Governance & Stewardship monitoring and evaluation programme.
  • International influencing of auditing and ethical standards, and significant contribution to non-financial reporting developments in the UK and internationally.
  • Preparation for ARGA’s local audit systems leader role.
  • Activities focused on improvements and innovation to support high quality reporting and audit quality.
  • Promoting the use of technology throughout its policy areas
  • Supporting its objectives and activities through increased stakeholder engagement with impact and influence, including an overhaul of planned publications focused on collective impact.

Supervision

  • Deliver a full programme of high-quality Audit Quality Review (AQR) inspections, Corporate Reporting Review (CRR) reviews and professional oversight visits and publish associated reporting, including thematic reviews.
  • Carry out ISQC inspection work and prepare for ISQM1.
  • Increase supervision of audit firm culture.
  • Assess audit firms’ adoption of operational separation principles.
  • Implement Public Interest Entity (PIE) audit registration decision-making.
  • Increase intensity of forward-looking supervision of audit firms, with more ‘joined up’ regulation of firms’ actions on quality.
  • Negotiate mutual recognition agreements resulting from EU Exit.
  • Perform equivalence and adequacy assessments.

Enforcement

  • Fair, robust, and timely case closures or conclusion through focus of investigations, prioritisation, training, and recruitment.
  • Upskilling and training to respond to changes in AEP from January 2022 and implement future powers arising from regulatory reform.
  • Publication of the Annual Enforcement Review, driving improved behaviours through messaging case outcomes.

Corporate services

  • Develop a statutory funding model for ARGA
  • Develop and implement an integrated information management strategy, including a medium-term IT strategy and enhanced data analytics and reporting.
  • Enhance cybersecurity risk management.
  • Appropriate workforce planning, aligned with the business planning cycle and designed to incentivise, reward, and retain key skills.
  • Strengthen support infrastructure, including in finance and procurement systems, internal controls, and IT.
  • Legal support for regulatory reform and legal and operational support for the UK Endorsement Board (UKEB).

The 3-year plan also covers other areas such as governance, risks and challenges and KPIs. The FRC also sets out its budget for 2022/23 for expenditure and funding.

The press release and 3-year Plan are available from the FRC website.  A feedback statement for the original consultation is available on the FRC's website here.

April 2022 IFRS Interpretations Committee meeting agenda posted

07 Apr, 2022

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held by video conference on 20 April 2022.

The Committee will discuss the following:

  • IFRS 15 Revenue from Contracts with Customers — Principal versus Agent: Software Reseller

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries as well as observer notes from the meeting on this page as they become available

IFRS Foundation seeks IASB Board members

07 Apr, 2022

The IFRS Foundation Trustees are seeking to appoint new Board members from the Asia-Oceania and the Europe region.

IASB members are appointed for an initial five-year term with the pos­si­bil­ity of being reap­pointed for another three years (in ex­cep­tional cir­cum­stances for another five years). The roles are full-time and based in London.

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

ISSB presence in Montreal announced

06 Apr, 2022

While the main seat of the International Sustainability Standards Board (ISSB) will be in Frankfurt, the IFRS Foundation aims for a global footprint by establishing regional hubs in all regions. A memorandum of understanding has now been signed that establishes the Montreal presence of the ISSB.

The Montreal centre will host key functions on behalf of the ISSB, including the coordination of activity across the Americas. The five-year agreement states that Montreal will host significant standard-setting responsibilities and associated functions, including a share of board meetings, leadership and resources.

Please click for more information in the press release on the IFRS Foundation website.

UK GAAP application for reporting periods ending 31 March 2022

06 Apr, 2022

The table below reflects new and revised UK GAAP financial reporting requirements that need to be considered for financial reporting periods ending on 31 March 2022.

Amendments have been made to FRS 102 in relation to phase 2 of the interest rate benchmark reform and also in relation to accounting for temporary rent concessions for operating leases occurring as a direct consequence of the COVID-19 pandemic extending beyond 30 June 2021 (for which an amendment was also made to FRS 105). Amendments to FRS 101, FRS 102, FRS 104 and FRS 105 have also been made to reflect changes in company law following the UK's exit from the European Union and to FRS 101 as a result of the 2020/21 annual review of the standard.

The table below reflects new and revised UK GAAP financial reporting requirements that need to be considered for financial reporting periods ending on 31 March 2022. For those reporters who want to understand new UK GAAP application for earlier periods please select one of the following:

Pronouncement Effective date Application for quarters ending 31 March 2022?
1st qtrs.* 2nd qtrs.** 3rd qtrs.*** Full yrs****
FRS 100
Amendments to FRS 101 - 2018/19 cycle issued The amendments take effect for accounting periods beginning on or after 1 January 2021. If an entity applies the July 2019 amendments to FRS 101 early, these amendments to FRS 100 shall be applied at the same time.

Already applied in the prior year (January 2021) #

Mandatory (see #) Mandatory (see #) Mandatory (see #)
Consequential amendments as a result of Amendment to FRS 101 – Effective date of IFRS 17 The amendments take effect for accounting periods beginning on or after 1 January 2023. If an entity applies the July 2019 amendments to FRS 101 early, these amendments to FRS 100 shall be applied at the same time ~ ~ ~ ~
Amendments to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period

The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use IAS that are adopted for use within the UK after 31 December 2020, in addition to IFRS that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’.

Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory
FRS 101
Amendments to the Basis for Conclusions FRS 101 Reduced Disclosure Framework

No effective date. No amendments to FRS 101 have been made

N/A (see effective date column) N/A (see effective date column) N/A (see effective date column) N/A (see effective date column)
Amendments to FRS 101 - 2018/19 cycle issued

The amendments take effect for accounting periods beginning on or after 1 January 2021. If an entity applies the recognition, measurement and disclosure requirements of IFRS 17 early, the amendments to FRS 101 are applied at the same time.

Already applied in the prior year (January 2021) # Mandatory (see #) Mandatory (see #) Mandatory (see #)
Amendments to FRS 101 - 2019/20 cycle issued

Paragraph 8 of FRS 101 notes that the exemptions are available from when the relevant standard is applied. Therefore there is no need to amend the effective date for these amendments, which will be available for financial statements approved after the amendments have been finalised.

Optional Optional Optional Optional
Changes the effective date of an amendment to the definition of a qualifying entity made in July 2019, effectively allowing relevant insurers to continue to apply FRS 101 for a further two years. The revised effective date for the new definition of a qualifying entity is accounting periods beginning on or after 1 January 2023 ~ ~ ~ ~

The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use IAS that are adopted for use within the UK after 31 December 2020, in addition to IFRS that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’.

Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory

Paragraph 8 of FRS 101 notes that the exemptions are available from when the relevant standard is applied. Therefore there is no need to amend the effective date for these amendments, which will be available for financial statements approved after the amendments have been finalised

% % % %
'

No amendments were made as a result of the annual review

NA NA NA NA
Amendments to FRS 101 - 2022/23 cycle

No amendments were made as a result of the annual review

NA NA NA NA
FRS 102
Amendments to FRS 101 - 2018/19 cycle issued

The amendments take effect for accounting periods beginning on or after 1 January 2021. If an entity applies the July 2019 amendments to FRS 101 early, these amendments to FRS 102 shall be applied at the same time

Already applied in the prior year (January 2021) #

Mandatory (see #)

Mandatory (see #)

Mandatory (see #)

Amendments to FRS 101 - 2019/20 cycle issued

Paragraph 8 of FRS 101 notes that the exemptions are available from when the relevant standard is applied. Therefore there is no need to amend the effective date for these amendments, which will be available for financial statements approved after the amendments have been finalised.

Optional

Optional

Optional

Optional

Consequential amendments as a result of Amendment to FRS 101 – Effective date of IFRS 17 The amendments take effect for accounting periods beginning on or after 1 January 2023. If an entity applies the July 2019 amendments to FRS 101 early, these amendments to FRS 102 shall be applied at the same time ~ ~ ~ ~
Amendments to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period

The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use IAS that are adopted for use within the UK after 31 December 2020, in addition to IFRS that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’.

Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory
‘Amendments to FRS 102 – Interest rate benchmark reform (Phase 2)’.

The amendments are effective for accounting periods beginning on or after 1 January 2021, with early application permitted.

Already applied in the prior year (January 2021)

Mandatory

Mandatory Mandatory
Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime - COVID-19-related rent concessions beyond 30 June 2021

The amendments are effective for accounting periods beginning on or after 1 January 2021, with early application permitted.

Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory
FRS 103
Amendments to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use IAS that are adopted for use within the UK after 31 December 2020, in addition to IFRS that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’. Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory
FRS 104
Amendments to FRS 104 Interim Financial Reporting - Going concern The amendments are effective for interim periods beginning on or after 1 January 2021, with earlier application permitted Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory
Amendments to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period

The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use IAS that are adopted for use within the UK after 31 December 2020, in addition to IFRS that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’.

Already applied in the prior year (January 2021) Mandatory Mandatory Mandatory
FRS 105
Amendments to reflect changes in UK company law following the UK’s exit from the European Union that come into effect at the end of the Transition Period

The effective date for these amendments is accounting periods beginning on or after 1 January 2021. Early application is permitted in some circumstances to provide UK entities with the option to use IAS that are adopted for use within the UK after 31 December 2020, in addition to IFRS that have been adopted in the EU as at this date. This is consistent with the transitional arrangements provided in UK company law for entities preparing ‘IAS accounts’.

Already applied in the prior year (January 2021)

Mandatory

Mandatory

Mandatory

Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime - COVID-19-related rent concessions beyond 30 June 2021

The amendments are effective for accounting periods beginning on or after 1 January 2021, with early application permitted.

Already applied in the prior year (January 2021)

Mandatory

Mandatory

Mandatory

* 1st quarter ending on 31 March 2022 (accounting period began on 1 January 2022).

** 2nd quarter ending 31 March 2022 (accounting period began 1 October 2021).

*** 3rd quarter ending 31 March 2022 (accounting period began 1 July 2021).

**** 4th quarter ending 31 March 2022 (accounting period began 1 April 2021).

# - The amendments to FRS 101 and the consequential amendments to FRS 100 and FRS 102 take effect for accounting periods beginning on or after 1 January 2021. If an entity applies the recognition, measurement and disclosure requirements of IFRS 17 early, the amendments to FRS 101 are applied at the same time.  IFRS 17 has been endorsed for use in the EU, albeit with an optional exemption from applying the annual cohort requirement.  It has not yet endorsed for use in the UK.  If an entity applies the July 2019 amendments to FRS 101 early, the amendments to FRS 100 and FRS 102 are applied at the same time.

~ The amendments to FRS 101 and the consequential amendments to FRS 100 and FRS 102 take effect for accounting periods beginning on or after 1 January 2023. If an entity applies the recognition, measurement and disclosure requirements of IFRS 17 early, the amendments to FRS 101 are applied at the same time. IFRS 17 has been endorsed for use in the EU, albeit with an optional exemption from applying the annual cohort requirement.  It has not yet endorsed for use in the UK.  If an entity applies the July 2019 amendments to FRS 101 early, the amendments to FRS 100 and FRS 102 are applied at the same time.

% - a qualifying entity may take advantage of the exemption introduced by paragraph 8(iA) from when Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) is applied. Similarly, the amendments to paragraph AG1(h) of FRS 101 apply from when Classification of Liabilities as Current or Non-current (Amendments to IAS 1) is applied. These standards are yet to be endorsed for use in the UK.  Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) has ben endorsed for use in the EU, Classification of Liabilities as Current or Non-current (Amendments to IAS 1) has not.

 

 

 

New and revised pronouncements as at 31 March 2022

06 Apr, 2022

Our popular summary of new and revised financial reporting requirements, updated for financial reporting periods ending on 31 March 2022. 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 reflects developments to 17 May 2022 and will be updated through to 30 June 2022 to reflect new and revised financial reporting requirements that need to be considered for financial reporting periods ending on 31 March 2022. For accounts approved after June 2022, please also refer to subsequent versions of this document for any new and revised IFRS Accounting Standards that have additionally been issued that might require disclosure in the accounts under IAS 8:30.

The information below is organised as follows:

Summary

Financial reporting considerations related to the Russia-Ukraine War
Below is our usual analysis of new and amended standards, however, we are also aware that many entities will have been impacted by Russia's invasion into Ukraine. Please see our Need to know — Financial reporting considerations related to the Russia-Ukraine War highlighting some of the key issues to be considered by the entities in preparing their financial statements.

The table below provides a summary of the pronouncements which will be mandatorily applied by UK entities for the first time at 31 March 2022, for various quarterly reporting periods. Where a UK entity chooses to prepare financial statements in accordance with IFRS Accounting Standards as issued by the IASB, as well as in compliance with International Accounting Standards as adopted in conformity with the requirements of the Companies Act 2006, that entity should comply with the earlier IASB effective date for those items.

Endorsement of IFRS Accounting Standards by the EU has not applied in the UK since the end of the transition period following the UK’s withdrawal from the EU (31 December 2020). The UK Endorsement Board (UKEB) is now responsible for endorsing IFRS Accounting Standards for use in the UK which all UK companies that are required or choose to apply IFRS Accounting Standards must apply. However, because UK endorsed IFRS Accounting Standards have not been granted equivalence to EU endorsed IFRS Accounting Standards by the EU, UK companies that are listed in the EEA may need to state compliance with both EU-endorsed and UK-endorsed IFRS Accounting Standards. Alternatively, they may state compliance with both UK-endorsed IFRS Accounting Standards and IFRS Accounting Standards as issued by the IASB, if this is permitted by the relevant listing authority.

Further information on IFRS Accounting Standards in the UK is available here.

The table below provides a summary of these pronouncements, and which reporting periods they apply to:

Pronouncement IASB Effective date* EU/UK effective date* UK Mandatory at 31 March 2022?
1st qtrs.** 2nd qtrs.*** 3rd qtrs.**** Full yrs*****
Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4)
1 January 2018 1 January 2018 Optional ~ Optional ~ Optional ~ Optional ~
Covid-19-Related Rent Concessions (Amendment to IFRS 16) 1 June 2020 1 June 2020 Already applied in prior year (Jan 21) Already applied in prior year (October 2020) Already applied in prior year (July 2020) Yes
Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) 1 January 2021 1 January 2021 Already applied in prior year (Jan 21 Yes Yes Yes
Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) 1 April 2021 1 April 2021 Yes Yes Yes Yes
Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16) 1 January 2022 1 January 2022 Yes No No No
Annual Improvements 2018-2020 Cycle 1 January 2022 1 January 2022 Yes No  No No
Reference to the Conceptual Framework (Amendments to IFRS 3) 1 January 2022 1 January 2022 Yes No No No
Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) 1 January 2022 1 January 2022 Yes No No No

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

** 1st quarter ending on 31 March 2022 (accounting period began on 1 January 2022).

*** 2nd quarter ending 31 March 2022 (accounting period began 1 October 2021).

**** 3rd quarter ending 31 March 2022 (accounting period began 1 July 2021).

***** 4th quarter ending 31 March 2022 (accounting period began 1 April 2021).

~ The application of both approaches (overlay approach/ deferral approach) is optional and an entity is permitted to stop applying them before the new insurance contracts standard is applied.

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:

  • Updates to accounting policies. The terminology and substance of disclosed accounting policies may need to be updated to reflect new recognition, measurement and other requirements, e.g IAS 19 Employee Benefits may impact the measurement of certain employee benefits.
  • Impact of transitional provisions. IAS 8 Accounting Policies, Changes in 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

The information below can 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 IFRS Standards that are in issue but not yet effective and which are likely to impact the entity

New or revised pronouncement Effective date

UK Application at 31 March 2022 to:

1st qtrs 2nd qtrs 3rd qtrs Full yrs

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 (Summary of IFRS 17, Article, Newsletter).

Applicable to annual reporting periods beginning on or after 1 January 2023. The original effective date of IFRS 17 of 1 January 2021 was amended by Amendments to IFRS 17 issued by the IASB in June 2020.

Endorsed for use in the EU, albeit with an optional exemption from applying the annual cohort requirement.  Also endorsed for use in the UK.

Optional

Optional

Optional

Optional

Amendments

New or revised pronouncement When effective UK Application at 31 March 2022 to:
1st qtrs 2nd qtrs 3rd qtrs Full yrs

Editorial Corrections (various)

The IASB periodically issues Editorial Corrections and changes to IFRSs and other pronouncements. Since the beginning of calendar 2012, such corrections have been made in February 2012, July 2012, March 2013, September 2013, November 2013 and March 2014, September 2014, December 2014, March 2015, April 2015, September 2015, December 2015, March 2016, May 2016, September 2016, December 2016, September 2017, November 2017, December 2018, March 2019, May 2019, December 2019, July 2020, September 2020, October 2020, November 2020, June 2021, October 2021, December 2021 and February 2022.

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

As minor editorial corrections, these changes are effectively immediately applicable under IFRS See comment in previous column
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 (article, newsletter)

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 five years after that.

In June 2020 the IASB issued Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) which changes the fixed expiry date for the temporary exemption (the deferral approach) in IFRS 4 Insurance Contracts from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.

 

Optional

Optional

Optional

Optional

Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)

Extends, by one year, the May 2020 amendment that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification

The Changes in Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) amend IFRS 16 to

  • permit a lessee to apply the practical expedient regarding COVID-19-related rent concessions to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022 (rather than only payments originally due on or before 30 June 2021);
  • require a lessee applying the amendment to do so for annual reporting periods beginning on or after 1 April 2021;
  • require a lessee applying the amendment to do so retrospectively, recognising the cumulative effect of initially applying the amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting period in which the lessee first applies the amendment; and
  • specify that, in the reporting period in which a lessee first applies the amendment, a lessee is not required to disclose the information required by paragraph 28(f) of IAS 8.

Issued: 31 March 2021 (article)

The amendment is effective for annual reporting periods beginning on or after 1 April 2021 (earlier application permitted, including in financial statements not yet authorised for issue at the date the amendment is issued).

 

Mandatory - endorsed by both the EU and UK.

Mandatory - Endorsed by both the UK and EU.

Mandatory - Endorsed by both the UK and EU.

Mandatory - Endorsed by both the UK and EU.

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current

Issued: 23 January 2020 (article)

Annual reporting periods beginning on or after 1 January 2023 (see 'Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Amendment to IAS 1)' below). Original effective date 1 January 2022.

Not yet endorsed for use in the EU or the UK.

 

 

 

 

Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16)

The amendments amend IAS 16 to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss.

Issued: 14 May 2020 (article, newsletter)

Annual reporting periods beginning on or after 1 January 2022

Mandatory

Optional

Optional

Optional

Annual Improvements 2018-2020 Cycle

Makes amendments to the following standards:

  • IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first-time adopter. The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by its parent, based on the parent’s date of transition to IFRSs.
  • IFRS 9 Financial Instruments - Fees in the ‘10 per cent’ test for derecognition of financial liabilities. The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognise a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.
  • IFRS 16 Leases - Lease incentives. The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the example the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated in that example.
  • IAS 41 Agriculture - Taxation in fair value measurements. The amendment removes the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flows when measuring the fair value of a biological asset using a present value technique. This will ensure consistency with the requirements in IFRS 13.

Issued: 14 May 2020 (article, newsletter)

The amendments to IFRS 1, IFRS 9, and IAS 41 are all effective for annual periods beginning on or after 1 January 2022. Early application is permitted. The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated.

 

 

Mandatory

Optional

Optional

Optional

Reference to the Conceptual Framework (Amendments to IFRS 3)

The changes:

  • update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework;
  • add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination; and
  • add to IFRS 3 an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination.

Issued: 14 May 2020 (article, newsletter)

The amendments are effective for annual periods beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier

 

 

Mandatory

Optional

Optional

Optional

Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)

The changes specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

Issued: 14 MAy 2020 (article, newsletter)

Annual reporting periods beginning on or after 1 January 2022. 

 

Mandatory

Optional

Optional

Optional

Covid-19-Related Rent Concessions (Amendment to IFRS 16)

Amends IFRS 16 to provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification.

The changes:

  • provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification;
  • require lessees that apply the exemption to account for COVID-19-related rent concessions as if they were not lease modifications;
  • require lessees that apply the exemption to disclose that fact; and
  • require lessees to apply the exemption retrospectively in accordance with IAS 8, but not require them to restate prior period figures.

The practical expedient applies to COVID-19-related rent concessions that result in reduction in lease payments due on or before 30 June 2021.

Issued: 28 MAy 2020 (article,newsletter)

 

The amendment is effective for annual reporting periods beginning on or after 1 June 2020.

 

Already applied in prior year (January 2021)

Already applied in prior year (October 2020)

Already applied in prior year (July 2020)

Mandatory

Amendments to IFRS 17

Amends IFRS 17 to address concerns and implementation challenges that were identified after IFRS 17 Insurance Contracts was published in 2017.

The main changes are:

  • Deferral of the date of initial application of IFRS 17 by two years to annual periods beginning on or after 1 January 2023
  • Additional scope exclusion for credit card contracts and similar contracts that provide insurance coverage as well as optional scope exclusion for loan contracts that transfer significant insurance risk.
  • Recognition of insurance acquisition cash flows relating to expected contract renewals, including transition provisions and guidance for insurance acquisition cash flows recognised in a business acquired in a business combination.
  • Clarification of the application of IFRS 17 in interim financial statements allowing an accounting policy choice at a reporting entity level.
  • Clarification of the application of contractual service margin (CSM) attributable to investment-return service and investment-related service and changes to the corresponding disclosure requirements.
  • Extension of the risk mitigation option to include reinsurance contracts held and non-financial derivatives.
  • Amendments to require an entity that at initial recognition recognises losses on onerous insurance contracts issued to also recognise a gain on reinsurance contracts held.
  • Simplified presentation of insurance contracts in the statement of financial position so that entities would present insurance contract assets and liabilities in the statement of financial position determined using portfolios of insurance contracts rather than groups of insurance contracts.
  • Additional transition relief for business combinations and additional transition relief for the date of application of the risk mitigation option and the use of the fair value transition approach.
  • Several small amendments regarding minor application issues.

Issued: 25 June 2020 (article)

 

The amendment is effective for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted.

 

Optional

Optional

Optional

Optional

Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4)

The amendment changes the fixed expiry date for the temporary exemption in IFRS 4 Insurance Contracts from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.

Issued: 25 June 2020 (article)

In June 2020 the IASB issued Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) which changes the fixed expiry date for the temporary exemption (the deferral approach) in IFRS 4 Insurance Contracts from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.

Optional

Optional

Optional

Optional

'Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Amendment to IAS 1)'

The amendment defers the effective date of the January 2020 amendments (see above) by one year.

Issued: 15 July 2020 (article)

 

The changes in Classification of Liabilities as Current or Non-current — Deferral of Effective Date defer the effective date of Classification of Liabilities as Current or Non-current (Amendments to IAS 1) to annual reporting periods beginning on or after 1 January 2023. Earlier application of the January 2020 amendments continue to be permitted.

Not yet endorsed for use in the EU or the UK.

Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

The amendments in Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) introduce a practical expedient for modifications required by the reform, clarify that hedge accounting is not discontinued solely because of the IBOR reform, and introduce disclosures that allow users to understand the nature and extent of risks arising from the IBOR reform to which the entity is exposed to and how the entity manages those risks as well as the entity’s progress in transitioning from IBORs to alternative benchmark rates, and how the entity is managing this transition.

Issued: 27 August 2020 (article)

 

Annual reporting periods beginning on or after 1 January 2021.

Already applied in prior year (January 2021)

Mandatory - Endorsed by both the UK and EU.

Mandatory - Endorsed by both the UK and EU.

Mandatory - endorsed by both the EU and UK.

Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

The amendments require that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policy. Examples of when an accounting policy is likely to be material are added. To support the amendment, the Board has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2.

Issued: 12 February 2021 (article)

Annual reporting periods beginning on or after 1 January 2023.  Endorsed for use in the EU but not in the UK.

 

 

 

 

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations.

The amendments provide an exemption from the initial recognition exemption provided in IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption does not apply to transactions in which both deductible and taxable temporary differences arise on initial recognition that result in the recognition of equal deferred tax assets and liabilities.

Issued: 7 May 2021 (article)

Annual reporting periods beginning on or after 1 January 2023. Not yet endorsed for use in the EU or the UK.

Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17)


The amendment permits entities that first apply IFRS 17 and IFRS 9 at the same time to present comparative information about a financial asset as if the classification and measurement requirements of IFRS 9 had been applied to that financial asset before.

Issued: 9 December 2021 (article)

An entity that elects to apply the amendment applies it when it first applies IFRS 17
Endorsed for use in the UK but not in the EU.

 

 

 

 

Definition of Accounting Estimates (Amendments to IAS 8)

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The amendments clarify that a change in accounting estimate that results from new information or new developments is not the correction of an error.

Issued: 12 February 2021 (article)

 

 

Annual reporting periods beginning on or after 1 January 2023.  Endorsed for use in the EU but not in the UK.

 

 

 

Call for research — Research on making materiality judgements

05 Apr, 2022

The IFRS Foundation is seeking to partner with national standard-setters to gather research and information related to the changes and additions to the IASB’s literature on making materiality judgements.

In particular, the IASB is looking to assess the effects on investors, companies, auditors and regulators for the following documents:

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

FRC issues update on its periodic review of UK and Ireland accounting standards

05 Apr, 2022

The Financial Reporting Council (FRC) has issued an update on the progress of its periodic review of UK and Ireland accounting standards, as at April 2022.

The update outlines the key sources of potential Standard amendments, including required improvements to Standards, changes in International Standards and wider developments. 

To support the review, the FRC will be holding a series of roundtables so that stakeholders can have their say on specific topics. The roundtable events are scheduled as follows: 

  • Preparers: Lease accounting – 17 May, 10:00-12:00
  • Preparers: Credit loss accounting – 7 June, 10:00-12:00
  • Preparers: Revenue accounting – 14 June, 10:00-12:00
  • Users: Revenue, leases and credit losses – 21 June, 10:00-12:00

The press release, including further details and information on how to register for the roundtables, and the FRC update are available on the FRC website. 

EFRAG Final Comment Letter on supplier finance arrangements

05 Apr, 2022

The European Financial Reporting Advisory Group (EFRAG) has published its Final Comment Letter in response to the International Accounting Standard Board's (IASB's) Exposure Draft ED/2021/10 ‘Supplier Finance Arrangements’.

The exposure draft adds disclosure requirements, and ‘signposts’ within existing disclosure requirements, that would ask entities to provide qualitative and quantitative information about supplier finance arrangements.

In its final comment letter, EFRAG welcomes the IASB's ED indicating that it will 'enhance the transparency of reporting for supplier finance arrangements and will increase conformity with existing disclosure requirements in IFRS Standards'.  However, EFRAG considers that the IASB's proposals do not completely address the wider issue of providing necessary transparency on entities' liquidity risk and how entities leverage their working capital to effectively obtain finance and encourages the IASB to consider possible improvements related to supplier finance arrangements in the future. 

EFRAG supports the narrow-scope of the project to develop specific disclosure requirements for supplier finance arrangements that provide relevant information to users of financial statements and makes further recommendations of how to strengthen the description of these arrangements, to expand the disclosure objective by also considering the effects of those arrangements on an entity’s liquidity risk and financial performance the and suggests improvements to the proposed disclosure requirements to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to better address users information needs.

A press release and the final comment letter are available on the EFRAG website. 

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