Annual improvements — 2018-2020 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.

This page tracks developments in the annual improvements process for the 2018-2020 cycle. The issues covered in this cycle were discussed by the IFRS Interpretations Committee between May 2016 and November 2017. The Board discussed the issues between April 2017 and December 2018 before issuing an exposure draft of proposed amendments in May 2019.


Current status of the project

Completed 2020. On 14 May 2020, the IASB issued Annual Improvements to IFRS Standards 2018–2020 containing the following amendments to IFRSs:

Standard Subject of amendment
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.


Project milestones

Date Development Comments
May 2016 to November 2017 Issues discussed by the IFRS Interpretations Committee
April 2017 to December 2018 Issues discussed by the IASB
21 May 2019 ED/2019/2 Annual Improvements to IFRS Standards 2018–2020 published Comments requested by 20 August 2019
14 May 2020 Annual Improvements to IFRS Standards 2018–2020 issued amendments are effective for annual reporting periods beginning on or after 1 January 2022

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