RSM South Africa

IFRS News in Brief Issue 66

Three Standards amended under 'Annual Improvements to IFRSs 2014-2016 Cycle'

On 8 December 2016, the IASB issued the following minor amendments under its Annual Improvements process:

Standard

Subject of amendment

Effective date(1)

IFRS 1 First-time Adoption of International Financial Reporting Standards

Deletion of short-term exemptions for first-time adopters: removal of reliefs that applied to reporting periods that have already passed.

1 January 2018

IFRS 12 Disclosure of Interests in Other Entities

Clarification of the scope of the Standard: the requirements do apply to interests in entities within the scope of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations except for summarised financial information for those interests.

1 January 2017

IAS 28 Investments in Associates and Joint Ventures

Measuring an associate or joint venture at fair value: clarification that exemption from applying the equity method is available separately for each associate or joint venture at initial recognition.

1 January 2018

(1) Annual periods beginning on or after

For more information: http://www.ifrs.org/Alerts/PressRelease/Pages/iasb-issues-minor-changes-to-ifrs-standards.aspx

IFRS 40 amended for transfers of investment property

The amendments published by the IASB on 8 December 2016 (effective for annual periods beginning on or after 1 January 2018 with early application permitted) clarify that transfers to, or from, investment property should be made when, and only when, there is evidence that a change in use of the property has occurred.

For more information: http://www.ifrs.org/Alerts/PressRelease/Pages/iasb-issues-minor-changes-to-ifrs-standards.aspx

Release of IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration

On 8 December 2016, the IASB provided guidance to clarify that the exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency is the one at the date of initial recognition of the non-monetary asset or liability. The Interpretation is effective for annual periods beginning on or after 1 January 2018 (earlier application permitted).

For more information: http://www.ifrs.org/Alerts/PressRelease/Pages/iasb-issues-minor-changes-to-ifrs-standards.aspx

INTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB)

LATEST DECISIONS SUMMARY

The following is a summarised update on the main provisional decisions taken by the IASB at its meeting on 13-14 December 2016. Other topics discussed include financial instruments with characteristics of equity, rate-regulated activities, amendments to IAS 19 and IFRIC 14, and scoping the Primary Financial Statements research project.

For more detailed and comprehensive information on the IASB’s discussions:https://s3.amazonaws.com/ifrswebcontent/2016/IASB/December/IASB-December-Update-2016.html   

Revised Conceptual Framework (final due H2/2017)

  • Without introducing business activities as an overarching concept that affects all areas of financial reporting, the revised Conceptual Framework (‘the CF’) should discuss how the way in which an entity conducts its business activities – with no focus on any particular type of business activity (e.g. long-term investment) - may affect decisions about the unit of account, measurement, presentation and disclosure.
  • The existing chapter on capital and capital maintenance should be carried forward to the CF.
  • The CF should retain the derecognition concepts and discussion of contract modifications as proposed in the exposure draft. However, the notion of ‘distinct’ for new rights and obligations that are added by a contract modification to be accounted for as new assets or liabilities is to be replaced with a reference to the concepts on the unit of account.

Disclosure Initiative

  • The Materiality Practice Statement (final due H2/2017) should:
    • state that the assessment of whether to provide narrative and descriptive prior period information is to be made on the basis of its relevance to understanding the current period financial statements
    • acknowledge that an entity might choose, or be required, to include information in addition to the minimum prior period information required by IFRS Standards, since disclosure of additional information is not prohibited by IFRS as long as certain conditions are met.
  • A forthcoming exposure draft to amend IAS 1 and IAS 8 (due H1/2017) will propose clarifications to the definition of materiality and its key characteristics.
  • IAS 7 will not be amended for the cash restrictions proposed in the September 2014 exposure draft.

Also read: IFRS News in Brief Issue 65

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