Proposed narrow-scope amendments to IAS 8 open for comment until 15 January 2018

On 12 September 2017, the IASB published an exposure draft aimed at helping entities distinguish accounting estimates from accounting policies, as changes in the former often affect an entity’s profit or loss while changes in the latter generally do not.

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Proposed amendments to the definition of 'material' open for comment until 15 January 2018

On 14 September 2017, the IASB published an exposure draft aimed at clarifying the definition of ‘material’ and improving understanding of the current requirements in IAS 1 and IAS 8.

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Release of IFRS Practice Statement 2 Making Materiality Judgements

On 14 September 2017, the IASB issued non-mandatory guidance on how to make materiality judgements (in particular following a four-step process), aimed at encouraging entities to apply judgement instead of using IFRS requirements as a checklist, so that financial statements focus on the information that is useful to investors.

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The following is a summarised update on some of the main discussions or tentative decisions taken by the IC at its meeting on 12 September 2017.

For more detailed and comprehensive information on the IC’s discussions:


The following is a summarised update on the main tentative decisions taken by the IASB at its meeting on 20-21 September 2017. In addition, the Board discussed Rate-regulated Activities and attended educational sessions on its Dynamic Risk Management and Business Combinations under Common Control projects. 

For more detailed and comprehensive information on the IASB’s discussions:

Accounting policy changes resulting from agenda decisions (proposed amendments to IAS 8 due H1/2018)

An entity should apply retrospectively a voluntary change in an accounting policy resulting from an agenda decision published by the IFRS Interpretations Committee, unless (i) determining the period-specific effects or the cumulative effect of the change would be impracticable, or (ii) the cost of determining those effects would outweigh the expected benefits to users of financial statements of applying retrospectively the new accounting policy (application guidance is to be provided to help with such assessment).

Availability of a refund (amendments to IFRIC 14 due H1/2018) and Plan amendment, curtailment or settlement (amendments to IAS 19 due December 2017)

The amendments to IAS 19 are to be finalised separately from the amendments to IFRIC 14, and become effective for annual reporting periods beginning on or after 1 January 2019 (earlier application permitted). Concerning IFRIC 14, further work should be performed to assess whether a more principles-based approach can be established for an entity to assess the availability of a refund of a surplus.

Annual Improvements to IFRS Standards 2015–2017 Cycle (amendments due December 2017)

The following three proposed amendments are to be finalised with an effective date of annual reporting periods beginning on or after 1 January 2019 (earlier application permitted): Accounting for previously held interests (IFRS 3 and IFRS 11), Income tax consequences of payments on financial instruments classified as equity (IAS 12), and Borrowing costs eligible for capitalisation (IAS 23).

Primary Financial Statements (consultation due H1/2018)

  • The introduction into the statement(s) of financial performance of subtotals that facilitate comparisons between entities (e.g. EBIT) is to be prioritised over introducing a management-performance measure subtotal.
  • If both an EBIT subtotal and an investing category are introduced, finance income or expenses should consist of the following separate line items in the statement(s) of financial performance: (i) income related to capital structure, (ii) expenses related to capital structure, (iii) interest income on a net defined benefit asset or a net asset that arises when a liability not part of an entity’s capital structure qualifies for offset with an asset, and (iv) interest expenses on liabilities not part of an entity’s capital structure.
  • An entity should continue to provide an analysis of expenses using the methodology, either by-function or by-nature, that provides the most useful information to users. Such determination should be based on a description of the methods to be developed by the Board together with criteria for entities to follow.
  • When the ‘nature of expense’ method is used, no additional information using the ‘function of expense’ method should be required.
  • The primary analysis of expenses should be presented in the statement(s) of financial performance, with any additional information required about expenses (i.e. an analysis by nature when a 'function of expense' method is used) to be disclosed in a single note.

Conceptual Framework (final due Q1/2018)

In relation to the qualitative characteristics of useful financial information, it is to be clarified that a trade-off may need to be made between relevance and faithful representation and specifically between relevance and measurement uncertainty, but with no discussion of how such a trade-off is made.


19 October 2017

ED/2017/4 - Property, Plant and Equipment— Proceeds before Intended Use

(Proposed amendments to IAS 16)

15 January 2018ED/2017/5 - Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)
15 January 2018ED/2017/6 - Definition of Material (Proposed amendments to IAS 1 and IAS 8)