European Union formally adopts amendments resulting from the 2015-2017 cycle of annual improvements

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15 Mar 2019

The European Union has published a Commission Regulation endorsing 'Annual Improvements to IFRS Standards 2015–2017 Cycle'.

The amendments affect 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 European Union effective date is the same as the IASB in case of all amendments (1 January 2019).

The Commission Regulation amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council was published in the Official Journal of the European Union on 15 March 2019.

As a result of the EU's adoption, the EFRAG has updated its endorsement status report.

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