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The International Accounting Standards Board (IASB) regularly publishes new International Financial Reporting Standards (IFRS), Interpretations of Standards (IFRIC) or amendments to existing IFRS Standards.
In response to these, the global IFRS team publishes IFRS Alerts on these changes (and other issues relevant to IFRS) as they are announced so that you can keep up to date.
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| Issue 2023-02 |
IASB issues amendments to enhance the transparency of supplier finance arrangements The amendments require additional disclosures that complement the existing disclosures in these two Standards. They require entities to disclose:
These additional disclosure requirements address investors wanting more visibility around supplier finance arrangements, which in some jurisdictions around the world are better known are reverse factoring arrangements. The amendments to IAS 7 and IFRS 7 are effective for accounting periods on or after 1 January 2024. Our thoughts |
| Issue 2023-01 |
IASB amends IAS 12 to help entities respond to the 'Pillar Two' tax rules The International Accounting Standards Board (IASB) has issued amendments to IAS 12 ‘Income taxes’ to give entities temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s (OECD) international tax reform. The amendments introduce both a temporary exception and some targeted disclosure requirements. Background However, while the reaction from jurisdictions around the world to implement the changes has been positive, there have been major stakeholder concerns about the uncertainty over the accounting for deferred taxes arising from the implementation of these rules. Those concerns mainly refer to identifying and measuring deferred taxes because determining whether the Pillar Two Rules will create additional temporary differences is very difficult and also which tax rate will be applicable (considering the number of factors affecting its determination). Therefore, the IASB has acted quickly to address these concerns and provide direction on what they expect entities to disclose. The amendments:
Entities are able to benefit from the temporary exception immediately as soon as the amendments are published but in providing this exemption they are required to provide the disclosures to investors for annual reporting periods beginning on or after 1 January 2023. However, in some jurisdictions, such as Europe, the endorsement process will probably not be completed before 30 June 2023 resulting in reporting entities operating in jurisdictions where the Pillar Two Rules have been enacted or quasi enacted, being in a situation that the amendments are aiming to avoid. We are of the view that if this happens, reporting entities are able to develop their own accounting policy in accordance with the guidance of Paragraph 10 of IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’. We consider that the value of the information being provided (ie relevancy, reliability, faithful presentation) is outweighed by the costs of attempting to update the deferred tax balances for Pillar Two Model Rules. Put another way, given these amendments to IAS 12 make it clear that no deferred tax is required to be recognised as a result of Pillar Two Model Rules, trying to identify and estimate any deferred tax for one period (i) in a way that might not be consistent with how other reporting entities would do it and (ii) with the only perspective to reverse it in a following period, may not end up providing reliable, consistent and decision useful information for the users of the financial statements. Our thoughts Considering some jurisdictions around the world have already substantially enacted the Pillar Two Model Rules, we commend the IASB for the speed in which they published these amendments and encourage reporting entities to consider what new disclosures are now required well ahead of any reporting obligations they might have. Listed entities in particular should take into account any views expressed by their local regulator in developing their accounting policy on this matter. |
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| Issue 2022 - 05 |
Ethiopia should now be considered a hyperinflationary economy [ 155 kb ] [ 155 kb ] Economic conditions that currently exist in Ethiopia will require reporting entities in that country to follow the requirements set out in IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. This means that any entities that have interim or annual reporting requirements at 31 December 2022 or thereafter in Ethiopia should reflect this Standard when preparing their IFRS-based financial statements.Therefore at 31 December 2022 there are eleven countries around the world where IAS 29 should be applied, when entities want to state they are in full compliance with IFRS. These countries are: Argentina, Ethiopia, Iran, Lebanon, South Sudan, Sudan, Suriname, Turkey, Venezuela, Yemen and Zimbabwe.Currently there are four countries that are potentially hyperinflationary and therefore should be closely monitored. They are: Angola, Haiti, Sri Lanka and Syria.As further information becomes available, we will continue to update this alert. Our thoughts IAS 29 is not a Standard that can be quickly implemented, particularly in group situations. Careful consideration needs to be given to recent IFRIC guidance dealing with situations where there is a hyperinflationary parent that has subsidiaries who also report in a hyperinflationary currency versus situations where a non-hyperinflationary parent has subsidiaries that report in a hyperinflationary currency. Also be mindful of how a hyperinflationary parent with subsidiaries that do not report in a hyperinflationary currency should be accounted for given the requirements set out in IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’.Any reporting entity considering IAS 29 for the first time will have to adapt their existing accounting systems to be able to process the hyperinflationary adjustments. It is important they understand the mechanics of adjusting for hyperinflation so they can restate in their financial statements both current and comparative period amounts.Download the full alert for a recap of the requirements of IAS 29. |
| Issue 2022 - 04 |
IASB amends IAS 1 to provide better disclosure on long-term debt with covenants IAS 1 requires entities to classify debt as current if the entity is unable to avoid settling the debt within 12 months after the reporting date. However, the entity may need to comply with covenants during that same period, which may question whether the debt should be classified as non-current. For example, a long-term debt may become current if the entity fails to comply with the covenants during the 12-month period after the reporting date.The amendments set out in ‘Non-current Liabilities with Covenants (Amendments to IAS 1)’ state that at the reporting date, the entity does not consider covenants that will need to be complied with in the future, when considering the classification of the debt as current or non-current. Instead, the entity should disclose information about these covenants in the notes to the financial statements.The IASB aims for these amendments to enable investors to understand the risk that such debt could become repayable early and therefore improving the information being provided on the long-term debt.The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, with early application permitted. If the amendments are applied in an earlier period, this should be disclosed. The effective date coincides with that of the amendments to IAS 1 previously issued in 2020 ‘Classification of Liabilities as Current or Non-current’. Our thoughts We welcome the IASB addressing this area, as we believe it addresses the feedback received on the classification of debt as current or non-current when preparers started to apply the previous amendments to IAS 1 ‘Classification of Liabilities as Current or Non-current’. |
| Issue 2022 - 03 |
IASB amends the requirements for sale and leaseback transactions [ 166 kb ] [ 166 kb ]
The IASB has issued additional guidance in IFRS 16 on accounting for sale and leaseback transactions. Previously IFRS 16 only included guidance on how to account for sale and leaseback transactions at the date of the transaction itself. However, the Standard did not specify any subsequent accounting when reporting on the sale and lease back transaction after that date. As a result, without further requirements, when the payments include variable lease payments there is a risk that a modification or change in the leaseback term could result in the seller-lessee recognising a gain on the right of use retained even though no transaction or event would have occurred to give rise to that gain. Consequently, the IASB decided to add subsequent measurement requirements for sale and leaseback transactions to IFRS 16. The amendments are applicable for annual reporting periods beginning on or after 1 January 2024, with early application permitted. If the amendments are applied in an earlier period, this should be disclosed. |
| Issue 2022 - 02 |
Turkey should now be considered a hyperinflationary economy [ 235 kb ] [ 235 kb ] The inclusion of Turkey means that at the date of issuing this publication there are now eleven countries around the world where IAS 29 should be applied, when entities are stating they are in full compliance with IFRS. These countries are: Argentina, Iran, Lebanon, South Sudan, Sudan, Suriname, Syria, Turkey, Venezuela, Yemen and Zimbabwe. |
| Issue 2022 - 01 | Accounting implications of the conflict in Ukraine [ 194 kb ] [ 194 kb ] In light of the latest conflict in Ukraine, including the introduction of wide ranging sanctions against certain Russian companies and individuals, entities need to carefully consider the accounting implications of this situation. This IFRS Alert considers the financial reporting impact of the conflict on 31 December 2021 and subsequent year ends as well as assessing the importance of assessing going concern. |
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| Issue 2021 - 07 | IASB provides transition option to insurers applying IFRS 17 [ 163 kb ] [ 163 kb ] The International Accounting Standards Board (IASB) has released a narrow-scope amendment to the transition requirements in IFRS 17 ‘Insurance Contracts’, providing insurers with an option aimed at improving the usefulness of information to investors on initial application of the new Standard. |
| Issue 2021 - 06 |
The IFRS Foundation (Foundation) has announced three significant developments to provide the global financial markets with high-quality disclosures on climate and other sustainability issues:
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| Issue 2021 - 05 |
The International Accounting Standards Board (IASB) has issued ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’ (Amendments to IAS 12).
The amendments require an entity to recognise deferred tax on certain transactions (eg leases and decommissioning liabilities) that give rise to equal amounts of taxable and deductible temporary differences on initial recognition.
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| Issue 2021 - 04 |
The International Accounting Standards Board (IASB) has issued ‘Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)’, an extension to the practical expedient period in the amendments to IFRS 16 ‘Leases’ made last year. This extension is for one year, so the application period now extends until 30 June 2022.
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| Issue 2021 - 03 |
The IFRS Foundation has confirmed there is an urgent need for global sustainability reporting standards. Given this, its Trustees are continuing their work on the establishment of an international sustainability reporting standards board within the existing governance structure of the Foundation.
The intention is for the Trustees to produce a definitive proposal (including a road map with timeline) by the end of September 2021, possibly leading to an announcement on the establishment of a sustainability standards board at the meeting of the United Nations Climate Change Conference COP26 in November 2021.
This alert [ 180 kb ] outlines the Foundation’s views about the strategic direction of its new board and their intended next steps. |
| Issue 2021 - 02 |
For entities with operations in the United Kingdom (UK) and the EU, the determination of the income tax impact on Brexit will require some significant judgements to be made.
These judgements should be based on the facts and circumstances of the reporting entity after considering the tax laws and regulations substantively enacted at 31 December 2020 because any future changes to tax laws requiring legislative activity cannot be taken into account.
The change in the UK’s tax status (because it is not longer a member of the EU) could also trigger the application of a different set of existing tax laws, which means changes to existing current and deferred tax balances may result.
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| Issue 2021 - 01 |
The International Accounting Standards Board (IASB) has now published an Exposure Draft ‘Regulatory Assets and Regulatory Liabilities’ (the ED). The ED proposes to replace IFRS 14 ‘Regulatory Deferral Accounts’ and require entities subject to rate regulation to give investors better information about their financial performance.
The proposed Standard would introduce a requirement for entities to give investors such information by reporting regulatory assets and regulatory liabilities in their statement of financial position, and related regulatory income and regulatory expense in their statement of profit or loss. |
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| Issue 2020 - 11 |
The International Accounting Standards Board (IASB) has issued a discussion paper DP/2020/2 ‘Business Combinations under Common Control’ for public consultation on possible accounting requirements of acquisitions involving the same group. These acquisitions are commonly known as business combinations under common control (BCUCC).
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| Issue 2020 - 10 |
IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ requires the financial statements of any entity whose functional currency is the currency of a hyperinflationary economy to be restated for changes in the general purchasing power of that currency so that the financial information provided is more meaningful.
Below is a reminder of the accounting implications of applying IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Our view is that until further notice, IAS 29 should be applied by entities whose functional currency is the currency of the following countries:
Iran and Lebanon should be applying IAS 29 for the first time in 2020.
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| Comment letter |
ED/2019/7 General Presentation and Disclosures [ 358 kb ] Our submitted comment letter on the International Accounting Standards Board's (IASB) Exposure Draft (ED) supports the reasons for the Board developing this ED, in order to improve the way information is communicated in the financial statements, particularly in the statement of profit or loss. We believe the proposals will add further consistency and clarity to the financial statements which will enhance comparability for users of financial statements. |
| Issue 2020 - 09 |
IASB issues Interest Rate Benchmark Reform Phase 2 [ 180 kb ] The International Accounting Standards Board (IASB) has published Interest Rate Benchmark Reform Phase 2 |
| Issue 2020 - 08 |
IASB defers the effective date of the IAS 1 Amendments [ 165 kb ] The International Accounting Standards Board (IASB) has issued an amendment to defer the effective date of the |
| Issue 2020 - 07 |
Amendments to IFRS 17 and IFRS 4 [ 491 kb ] The International Accounting Standards Board (IASB) has issued ‘Amendments to IFRS 17 ‘Insurance Contracts’’ (the Amendments). The aim of the amendments is to address the concerns raised by stakeholders and help entities to more easily transition and implement the Standard. The IASB also issued an amendment to the previous insurance Standard IFRS 4, ‘Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4)’ so that entities can still apply IFRS 9 ‘Financial Instruments’ alongside IFRS 17. |
| Issue 2020 - 06 |
Relief for lessees accounting for rent concessions during the COVID-19 pandemic [ 214 kb ] The International Accounting Standards Board (IASB) has published an amendment ‘COVID-19-Related Rent Concessions (amendment to IFRS 16)’ (the amendment). The amendment adds a practical expedient to the Standard which provides relief for lessees in assessing whether specific COVID-19 rent concessions are considered to be lease modifications. Instead, if this practical expedient is applied, these rent concessions are treated as if they are not lease modifications. There are no changes for lessors. |
| Issue 2020 - 05 |
IASB issues four narrow-scope amendments to IFRS Standards [ 231 kb ] The International Accounting Standards Board (IASB) has issued a collection of narrow-scope amendments to IFRS Standards. The collection includes amendments to three Standards as well as Annual Improvements to IFRS Standards, which addresses non-urgent (but necessary) minor amendments to four standards. |
| Issue 2020 - 04 |
IASB proposes relief for rent concessions during the COVID-19 pandemic [ 223 kb ] The International Accounting Standards Board (IASB) published an Exposure Draft ‘COVID-19-Related Rent Concessions - Proposed amendment to IFRS 16’ (the ED). The ED proposes to add a practical expedient to the Standard which provides relief for lessees in assessing whether specific COVID-19 rent concessions are considered to be lease modifications. Instead, if this practical expedient is applied, these rent concessions are treated as if they are not lease modifications. There are no proposed changes for lessors. |
| Issue 2020 - 03 |
Accounting implications of the Coronavirus (COVID-19) outbreak [ 173 kb ] The spread of the Coronavirus is impacting businesses around the world. Entities need to carefully consider the accounting implications of this situation. This IFRS Alert considers the impact of the Coronavirus on 31 December 2019 year ends. |
| Issue 2020 - 02 |
IASB Issues Classification of Liabilities as Current or Non-Current [ 189 kb ] On 23 January 2020 the IASB published ‘Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)’ which clarify the Standard’s guidance on whether a liability should be classified as either current or non-current. |
| Issue 2020 - 01 |
IASB proposes major changes to the primary statements and notes [ 291 kb ] In December 2019 the International Accounting Standards Board (IASB) published an Exposure Draft ‘General Presentation and Disclosures’ (General Presentation ED). The General Presentation ED proposes to replace IAS 1 ‘Presentation of Financial Statements’ with a new IFRS and amend several other IFRS Standards. |
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| Issue 2019 - 01 |
IASB issues Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) [ 254 kb ] In response to the ongoing reform of interest rate benchmarks around the world the IASB have released these latest amendments. The amendments aim to provide relief for hedging relationships. |
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| Issue 2018 - 05 |
Argentina confirmed as hyperinflationary [ 216 kb ] This alert confirms that IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ will need to be applied from 1 July 2018. The Alert sets out some of the implications of applying IAS 29. |
| Issue 2018 - 04 |
IASB issues Definition of Material (Amendments to IAS 1 and 8) [ 217 kb ] This alert looks at the IASB’s publication ‘Definition of Material (Amendments to IAS 1 and IAS 8). The amendments made by this publication are designed to make it easier for companies to define materiality judgements. |
| Issue 2018 - 03 |
Argentina expected to be declared hyper-inflationary in 2018 [ 225 kb ] This alert looks at the potential implications of Argentina being declared hyperinflationary in the second half of 2018. IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ requires the financial statements of any entity whose functional currency is hyperinflationary to be restated for changes in its general purchasing power. |
| Issue 2018 - 02 |
Conceptual Framework for Financial Reporting (Conceptual Framework) [ 189 kb ] The Conceptual Framework describes the objective of, and the concepts for, general purpose financial reporting. Although it is not a Standard and will not immediately change or override any existing Standards, it might affect entities that develop or select accounting policies in accordance with the previous version of the Conceptual Framework that was issued in 2010. |
| Issue 2018 - 01 |
Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) [ 264 kb ] The amendments require companies to use updated actuarial assumptions to determine pension expenses following changes to a defined benefit pension plan, as described in this alert. |
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| Issue 2017 - 07 | |
| Issue 2017 - 06 |
Long-term Interests in Associates and Joint Ventures [ 264 kb ] (Amendments to IAS 28) |
| Issue 2017 - 05 |
Prepayment Features with Negative Compensation (Amendments to IFRS 9) [ 269 kb ] |
| Issue 2017 - 04 |
IFRS Practice Statement 2: Making Materiality Judgements [ 268 kb ] |
| Issue 2017 - 03 |
IFRIC 23 ‘Uncertainty over Income Tax Treatments' [ 270 kb ] |
| Issue 2017 - 02 | |
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Issue 2017 - 01 |
Uncertainty over tax issues [ 309 kb ] resulting from the UK's decision to leave the European Union |