Annual improvements — 2011-2013 cycle


The IASB's annual improvements project provides a streamlined process for dealing efficiently with a collection of amendments to IFRSs. The primary objective of the process is to enhance the quality of standards, by amending existing IFRSs to clarify guidance and wording, or to correct for relatively minor unintended consequences, conflicts or oversights. Amendments are made through the annual improvements process when the amendment is considered non-urgent but necessary.

Each year the IASB discusses and decides upon proposed improvements to IFRSs as they have arisen throughout the year. Issues dealt with in this process arise from matters raised by the IFRS Interpretations Committee and suggestions from staff or practitioners.

In order to be included in the annual improvements process, the proposed amendments must meet all of the following criteria (summarised), as published in the Due Process Handbook (revised in February 2011):

  • The proposed amendment either clarifies existing standards, or corrects conflicts or oversights, but does not propose a new principle or a change to an existing principle
  • The proposed amendment is well defined and sufficiently narrow in scope such that the consequences of the proposed change have been considered
  • It is probable that the IASB will reach conclusion on the issue on a timely basis
  • If a proposed amendment would amend IFRSs that are subject of a current or planned IASB project, there must be a need to make the amendment sooner than the project would.

Once this assessment is made, the proposed amendments follow the same due process as other IASB projects. Proposals are generally published in the third quarter of the year with a comment period of 90 days.

From January 2010, the IFRS Interpretations Committee has taken on the additional role of reviewing proposed amendments within the annual improvements process and making recommendations to the IASB.


Current status of the project

This project has been completed. The IASB issued Annual Improvements to IFRSs 2011–2013 Cycle on 12 December 2013, amending the following pronouncements:


IFRS 1 First-time Adoption of International Financial Reporting Standards (changes to the Basis for Conclusions only) Meaning of effective IFRSs
Clarifies that an entity, in its first IFRS financial statements, has the choice between applying an existing and currently effective IFRS or applying early a new or revised IFRS that is not yet mandatorily effective, provided that the new or revised IFRS permits early application. An entity is required to apply the same version of the IFRS throughout the periods covered by those first IFRS financial statements.
IFRS 3 Business Combinations Scope of exception for joint ventures
Clarifies that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself.
IFRS 13 Fair Value Measurement Scope of of paragraph 52 (portfolio exception)
Clarifies that the scope of the portfolio exception defined in paragraph 52 of IFRS 13 includes all contracts accounted for within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, regardless of whether they meet the definition of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation.
IAS 40 Investment Property Clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property
Clarifies that determining whether a specific transaction meets the definition of both a business combination as defined in IFRS 3 Business Combinations and investment property as defined in IAS 40 Investment Property requires the separate application of both standards independently of each other.


Project milestones

20 November 2012 ED/2012/2 Annual Improvements to IFRSs (2011—2013 Cycle) published Comment deadline 18 February 2013
12 December 2013 Annual Improvements to IFRSs 2011–2013 Cycle issued
The amendments are effective in the EU for annual periods beginning on or after 1 January 2015, however, earlier application is permitted so EU companies can adopt in accordance with the IASB effective date (1 July 2014).

Entities are permitted to early adopt any individual amendment within the cycle without early adopting all other amendments.

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