Changes to Thai Financial Reporting Standards in 2021 – by Khun Amornrat Sae-Liw – Senior Accounting Manager – RSM Thailand Limited

By Amornrat Sae-Liw, Senior Accounting Manager

The Board of Accounting Standards is in the process of formulating Thai financial reporting standards to be in accordance with the criteria established by International Financial Reporting Standards. This is a revised version in accordance with International Accounting Standards ending 31 December 2020 (Bound Volume 2021 Consolidated without early application), which is effective for accounting periods beginning on or after 1 January 2022. This article has been adapted and put together by Amornrat Sae-Liw - Senior Accounting Manager – RSM Accounting Firm in Thailand.

For the year 2021, there are five financial reporting standards revised from 2020. These revisions are due to the following revisions of the principles:

Correction /Enhancement

Affected Finance Reporting Standards

Covid-19-Related Rent Concessions

TFRS 16

Interest Rate Benchmark Reform—Phase 2

TFRS 4, TFRS 7, TFRS 9, TFRS 16 and accounting practices on financial instruments and disclosure of information for the insurance business.

Extension of the Temporary Exemption from Applying IFRS 9

TFRS 4

  • Noted:  With the exception of the Covid 19 Related Rent Concessions, these will be effective for accounting periods beginning on or after June 1, 2020  

Standard Updated

Covid-19-Related Rent Concessions
            Covid-19-Related Rent Concessions, which amends IFRS 16, is effective from 1 June 2020 with earlier application permitted. The amendment permits lessees, as a practical expedient, to not assess whether rent concessions that occur as a direct consequence of the covid-19 pandemic and meet specified conditions are lease modifications and, instead, to account for those rent concessions as if they were not lease modifications.

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Extension of the Temporary Exemption from Applying IFRS 9

            Extension of the Temporary Exemption from Applying IFRS 9, which amends IFRS 4, extends the temporary exemption from applying IFRS 9 by two years. It will expire for annual reporting periods beginning on or after 1 January 2023.

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Interest Rate Benchmark Reform—Phase 2

            Interest Rate Benchmark Reform—Phase 2 (Phase 2 amendments) was issued in August 2020 and amends IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. The Phase 2 amendments address issues that might affect financial reporting during the reform of an interest rate benchmark, including the effects of changes to contractual cash flows or hedging relationships arising from the replacement of an interest rate benchmark with an alternative benchmark rate. The objectives of the Phase 2 amendments are to:

  • Support companies in applying IFRS Standards when changes are made to contractual cash flows or hedging relationships because of the reform; and
  • Assist companies in providing useful information to users of financial statements.
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Resources: https://www.TFAC.or.th

If you would like further clarification on the contents of this article or if you need any advice on accounting in Thailand or other consulting services provided by RSM Thailand Limited, please contact Amornrat Sae-Liw - Senior Accounting Manager on [email protected]