International Financial Reporting Standards (IFRS) are continually changing. This technical update is designed to help ensure that finance teams are aware of those changes, allowing them to consider the impact that they may have on their company.
The summary section provides an overview of the key action points to be aware of and the following sections provide an overview of the coming changes.
Changes to accounting standards in the next couple of years are relatively minor, however this is very much the 'calm before the storm' with the introduction of IFRS 9, IFRS 15 for the years commencing on or after 1 January 2018 and IFRS 16 for years commencing on or after 1 January 2019.
Confirms that when an entity acquires an interest in a joint operation which constitutes a business (as defined by IFRS 3) the entity shall apply the principles on business combinations accounting in IFRS 3.
Enhanced guidance on the application of materiality, stating that materiality considerations apply to all parts of the financial statements and that even when a standard requires a disclosure materiality considerations apply. The amendment also states that material information should not be obscured by aggregating or by providing immaterial information.An entity's share of Other Comprehensive Income of equity accounted associates and joint ventures should be presented in aggregate as a single line item based on whether or not it will subsequently be reclassified to profit or loss.
The amendment also stresses that understandability and comparability should be considered when determining the order of the notes and that these need not be presented in the order listed in the standard.
Separates the accounting of bearer plants (measured at cost or revaluation in accordance with IAS 16) from the accounting for the agricultural produce (measured at fair value in accordance with IAS 41).
Allows the use of the equity method in separate financial statements to account for investments in subsidiaries, associates and joint ventures.