Annual improvements — 2010-2012 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  2010–2012 Cycle on 12 December 2013, amending the following pronouncements:


IFRS Amendments
IFRS 2 Share-based Payment Definition of 'vesting condition'
Amends the definitions of 'vesting condition' and 'market condition' and adds definitions for 'performance condition' and 'service condition' (which were previously part of the definition of 'vesting condition').
IFRS 3 Business Combinations
(with consequential amendments to other standards)
Accounting for contingent consideration in a business combination
Clarifies that contingent consideration that is classified as an asset or a liability shall be measured at fair value at each reporting date.

IFRS 8 Operating Segments

Aggregation of operating segments
Requires an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments.

Reconciliation of the total of the reportable segments' assets to the entity's assets
Clarifies that an entity shall only provide reconciliations of the total of the reportable segments' assets to the entity's assets if the segment assets are reported regularly.

IFRS 13 Fair Value Measurement
(amendments to the basis of conclusions only, with consequential amendments to the bases of conclusions of other standards)
Short-term receivables and payables
Clarifies that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting if the effect of not discounting is immaterial.
IAS 16 Property, Plant and Equipment Revaluation method - proportionate restatement of accumulated depreciation
Clarifies that when an item of property, plant and equipment is revalued the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount.
IAS 24 Related Party Disclosures Key management personnel
Clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity.
IAS 38 Intangible Assets Revaluation method - proportionate restatement of accumulated amortisation
Clarifies that when an intangible asset is revalued the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount.

The proposals in ED/2012/1 regarding the classification of liabilities as current or non-current were not finalised, and were considered in a separate narrow scope project.


Project milestones

Date Development Comments
3 May 2012 Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle) published Comment deadline 5 September 2012
12 December 2013 Annual Improvements to IFRSs 2010—2012 Cycle issued

Effective for annual periods beginning on or after 1 July 2014.

Early adoption possible and entities are permitted to early adopt any individual amendment within the cycle without early adopting all other amendments.

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