- IFRS 17 Insurance Contracts , amendments to IFRS 17, was published on 18 May 2017 with amendments issued on 25 June 2020 and planned effective date on 1 January 2023. IFRS 17 Insurance Contracts will replace IFRS 4 Insurance contracts, which allows insurance contracts to continue to be accounted for in accordance with the accounting principles in national standards and which, as a result, implies multiple different solutions. IFRS 17 requires consistent recognition of all insurance contracts. Liabilities arising from contracts will be recognised at present values instead of historical cost. The standard adoption is set to be conducted based on a full retrospective approach (if the entity would be unable to comply with full retrospective approach, an entity should use the modified retrospective approach or the fair value approach).
The amendments are intended to:
- reduce costs by simplifying requirements of the standard;
- simplify the financial results explanation; and
- ease the transition to the new standard by deferring the effective date of the standard to 2023 and introducing additional relief to ease the first-time adoption of IFRS 17.
- Amendments to IAS 1 Presentation of Financial Statements – classification of liabilities, was published on 23 January 2020 and on 15 July 2020 the effective date was postponed to 1 January 2023. The amendments relate to the presentation of liabilities in the statement of financial position. In particular, they provide clarification that the classification of liabilities as current or non-current should be based on the rights existing at the end of the reporting period. A prospective approach will apply to the amendments.
- Amendments to IFRS 3 Business combinations published on 14 May 2020 and are effective for annual periods beginning on or after 1 January 2022. The amendments update the reference in IFRS 3 to the Conceptual framework for financial reporting without changing the accounting requirements for business combinations.
- Amendments to IAS 16 Property, plant and equipment, published on 14 May 2020 and are effective for annual periods beginning on or after 1 January 2022. The amendments prohibit a company from deducting from the cost of acquisition or development of property, plant and equipment amounts received from the sale of items produced in preparation for the asset’s intended use. Instead, the company should recognise income from the sales and the corresponding expenses in the income statement.
- Amendments to IAS 37 Provisions, contingent liabilities and contingent assets, published on 14 May 2020 and are effective for annual periods beginning on or after 1 January 2022. They specify which costs an entity should take into account in assessment whether a contract will result in a loss.