The International Accounting Standards Board (IASB) issues various new pronouncements that must be considered annually when entities prepare financial statements and auditors consider compliance requirements with IFRS.

Accounting requirements

Steps to consider for implementation:

  1. If an accounting policy becomes effective for the first time in a financial year, and it is not applied, no disclosures are included. ONLY include disclosures when the pronouncement is applied and has an effect on the financial statements1.
  2. Consider the impact of all new pronouncements on the current transactions and determine whether any changes are required as well as its impact on the entity – if the actual impact cannot be measured, provide narrative disclosures as to what will change2.
  3. Provide the required disclosures for all new pronouncements, even when such a change will have no impact, as this is considered part of management's judgements in determining which accounting policies are applicable per IAS 1, Presentation of Financial Statements.

New Pronouncements

The following pronouncements are applicable for financial statements commencing 1 January 2021 and beyond:

Standards/Amendments effective 1 January 2021

STANDARD

Nature of change

Issued date

IFRS 9 – IAS 39 -IFRS 7 – IFRS 4 -IFRS 16

Amendments regarding replacement issues in the context of the IBOR reform

August 2020



In August 2020, IASB issued Interest Rate Benchmark Reform—Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and IFRS 16 Leases. Interbank offered rates (IBORs) are interest reference rates, such as LIBOR, JIBIR, EURIBOR and TIBOR, that represent the cost of obtaining unsecured funding, in a particular combination of currency and maturity and in a particular interbank term lending market.

The following pronouncements are applicable for financial statements commencing 1 January 2022 and beyond:

Standards/Amendments effective 1 January 2022

STANDARD

Nature of change

Issued date

IFRS 1

Amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (subsidiary as a first-time adopter)

May 2020

IAS 37

Amendments regarding the costs to include when assessing whether a contract is onerous

May 2020

IAS 16

Amendments prohibiting a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use

May 2020



The following pronouncements are applicable for financial statements commencing 1 January 2022 and beyond:

Standards/Amendments effective 1 January 2023

STANDARD

Nature of change

Issued date

IAS 1

Amendments regarding the disclosure of accounting policies

February 2021

IAS 1

Amendments regarding the classification of liabilities

January 2020

IAS 1

Amendment to defer the effective date of the January 2020 amendments

July 2020

IAS 8

Amendments regarding the definition of accounting estimates

February 2021

IAS 12

Amendments regarding deferred tax on leases and decommissioning obligations

May 2021

IFRS 17

Insurance contracts

May 2017



Footnotes

1. IAS 8, Accounting Policies, Estimates and Errors, par. 28, IASB, December 2003.

2. IAS 8.30 and .31

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.