That is, it does not require either (1) that the concession either be a direct consequence of COVID-19 (merely that it is related to COVID-19) or (2) result in reduced payments only through June 30, 2021; and includes specific guidance on acceptable accounting approaches for certain types of concessions (e.g. Early adoption is permitted unless otherwise stated. To thrive in today's marketplace, one must never stop learning. Early adoption is permitted.Â, Unlike IFRS Standards, the guidance addressing long-duration contracts issued by insurers and reinsurers in US GAAP applies only to insurance entities. In 2018 and the following years once more new or amended IFRS standards and interpretations became or are going to become effective. Unlike IFRS Standards, US GAAP requires, in certain situations, a likelihood assessment at the reporting date as to whether the creditor will accelerate repayment of the debt (e.g. Unlike IFRS, the FASB practical expedient applies to lessors as well as lessees; it is more permissive with respect to eligibility. The effective date for the amendments for the current versus noncurrent classification of liabilities has been proposed to be extended by one year. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. Instead, the company can elect to account for eligible COVID-19 related rent concessions, whatever their form (e.g. With the implementation of IFRS 17, the accounting for insurance contracts will differ significantly between IFRS Standards and US GAAP both for insurers, reinsurers and non-insurers. The practical expedient is not available to lessors. Our semi-annual outlook is a quick aid to help IFRS Standards preparers in the US keep track of imminent IFRS Standards changes and to assess the relevance to their financial statements. Describes the changes to Standards messages effective as of 21 November 2021. This table displays the new standards, ... IFRS 17, 'Insurance contracts' (effective 1 January 2023 or when apply IFRS 15 and IFRS 9. This product is a printed bound volume. The proposed amendment would improve the sale and leaseback requirements already in IFRS 16 by providing greater clarity for the company selling and leasing back an asset both at the date of transaction and subsequently. It aims to increase transparency and to reduce diversity in the accounting for insurance contracts. See the IASB Board work plan for other projects that are currently in progress. From the IFRS Institute – December 4, 2020. Update 2016-04— Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) Similarly, the FASB has extended effective dates for the following standards, causing a wider gap for dual reporters that are private US companies: The FASB plans to continue its project on reporting of gifts-in-kind by not-for-profit entities in the near term, but will defer issuing any other proposed updates until later in 2020. Please find below a brief summary of news and events from the International Accounting Standards Board (Board) and the IFRS® Foundation over the past month: The IFRS Foundation Trustees recently announced the appointment of Andreas Barckow to serve as Chair of the Board, effective July 2021. The IASB Board and the FASB take different approaches to the effective dates of new pronouncements. The effective date for preparers is annual periods beginning on or after January 1, 2020.1 The Conceptual Framework is typically used by preparers when developing accounting policies where no IFRS Standards apply to a particular transaction. there are no other ‘substantive’ changes to the lease. Effective dates of new International Financial Reporting Standards (IFRSs) © 2020 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. In 2016, the IASB issued IFRS 16, the new leases standard, which will be effective in 2019. Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition and Measurement, and IFRS 7, Financial Instruments: Disclosures, provide temporary but mandatory relief from specific hedge accounting requirements to address potential effects of the uncertainly in the lead up to IBOR reform (IBOR reform – Phase 1). Publication: Use of IFRS Standards around the world [PDF], How the IFRS Interpretations Committee helps support consistent application, Supporting materials for the IFRS for SMEs Standard, business combinations under common control, educational material to highlight how existing requirements in IFRS Standards, Consultation Paper on Sustainability Reporting. Improving business performance, turning risk and compliance into opportunities, developing strategies and enhancing value are at the core of what we do for leading organizations. statements will need to consider the newly effective standards IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments , as well as other amendments to IFRSs. Like IFRS Standards, US GAAP applies a ’10 percent’ test for derecognition of financial liabilities, considering fees paid or received between the borrower and the lender. This edition, presented in three volume parts, contains the IFRS® Standards, including IAS® Standards, IFRIC® Interpretations and SIC® Interpretations, as approved for issue up to 31 December 2020 and required to be applied on 1 January 2021. The right needs to be unconditional and must have substance. Pozen is a financial executive and former executive chair of MFS Investment Management, Robinson currently serves as a trustee of the Financial Accounting Foundation, and Schipporeit is an independent management consultant and is a … The current and noncurrent classification of liabilities is not currently converged between IFRS Standards and US GAAP. All rights reserved. From the IFRS Institute – May 29, 2020. Trustees announce appointments to … The comment period ended on May 25, 2020 and the final amendments are expected in Q3 2020. KPMG highlights potential IFRS® Standards accounting and disclosures impacts of COVID-19. The standard will replace IFRS 4 Insurance Contracts. Certain accommodations have been made, such as deferring effective dates, extending project timelines and comment periods and providing relief on accounting for rent … Archived recordings can be accessed anytime. Skip to the content. This product is a printed bound volume. Derecognition and modifications of financial liabilities, however, remains a complex area where other differences between IFRS Standards and US GAAP arise. This may, for example, apply to an amortizable license acquired through a business combination in a jurisdiction in which no tax deduction may be available for the purposes of the corporate tax while the asset is used, but the full amount may be deductible for the purposes of the capital gains tax when the asset reaches the end of its life, and corporate and capital gains and losses cannot be offset. Ensure that you communicate their impact to your stakeholders! The deferral of the effective date of the new accounting standard IFRS 17 to 1 January 2023 has given insurers some breathing room to prepare for the transition, but for all there is still an enormous amount of work to do and the year ahead will be a very big year for the entire industry. Many offer CPE credit. Early adoption is permitted. In March 2018, the IASB Board revised its Conceptual Framework. For first time adopters of IFRS, IFRS 1 mirrors the transition guidance set out in Appendix C of IFRS 17. samples) before the related PPE is available for its intended use can no longer be deducted from the cost of PPE. We encourage you to closely monitor the FASB’s technical agenda for potential further delays in future standard-setting activities. Search Close search See all results in Search Page. Standards/Interpretations Issued Not Yet Effective as at September 2020 IAS 8 requires that, when an entity has not applied a new Standard or Interpretation that has been issued but is not yet effective, the entity shall disclose: (a) this fact; and (b) known or reasonably estimable information relevant to assessing the possible Effective for annual periods beginning on or after January 1, 2021: IFRS 17 Insurance Contracts (New in 2017; replaces IFRS 4) In accordance with specific requirements in IFRS 17. However, the FASB Concept Statements, SEC guidance used by management, as well as guidance for auditors all refer to ‘materiality’ and define it as “…if there is a substantial likelihood that the fact would have been viewed by a reasonable investor as having significantly altered the total mix of information made available...” In addition, this evaluation involves both quantitative and qualitative aspects. Revenue Recognition. In 2016 and the following years once more new or amended IFRS standards and interpretations became or are going to become effective. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. The FASB has made similar responses to COVID-19 to support stakeholders through the current situation. Please complete the CAPTCHA field to verify you are human. The Board has also proposed to amend IFRS 16 Leases by specifying how a company measures the lease liability in a sale and leaseback transaction. The Board has started its Post-implementation Review (PiR) of the classification and measurement requirements in IFRS 9 Financial Instruments and has added the PIR as a project to its work plan. The new insurance standard IFRS 17 Insurance Contracts was issued in 2017 with the effective date of 1 January 2021, but IASB already makes steps to postpone its application till 2022. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance. Use this tool to generate your customised list of newly effective and forthcoming IFRS Standards IASB ® Board acknowledges the COVID-19 related challenges that stakeholders face in effectively implementing new and amended standards. The IFRS Foundation Trustees are responsible for the governance, oversight and strategy of the Foundation and the International Accounting Standards Board, which sets IFRS Standards. Amendments. Find out what KPMG can do for your business. Further amendments to IFRS 3, Business Combinations, update references in IFRS 3 to the revised 2018 Conceptual Framework. Amendments to IFRS 16, Leases, COVID-19-Related Rent Concessions4, permit lessees not to assess whether eligible COVID-19 related rent concessions are lease modifications, and account for them as if they were not lease modifications. IFRS 17 provides the first comprehensive guidance to accounting for insurance contracts under IFRS Standards. Amendments to the Conceptual framework Annual periods 1 Jan 2020 Early adoption is permitted Endorsed 7 1 January 2021 IFRS 17, ‘Insurance contracts’ Annual periods on or after 1 Jan 2021 Early adoption is permitted once IFRS 15 and IFRS 9 are applied. Head office: Columbus Building, 7 Westferry Circus, Canary Wharf, London E14 4HD, UK. Description: For accounting periods beginning on 1 January 2021, excluding changes not yet required. Both standards were issued in 2014 and are effective for annual periods beginning Jan. 1, 2018. Accessibility   |   Privacy   |   Terms and Conditions   |   Trade mark guidelines   |   All legal information   |   Using our website. the revised consideration for the lease remains ‘substantially the same’ or is less than the consideration for the lease before the concession; any reduced payments were originally due on or before June 30, 2021; and. © IFRS Foundation 2017. Responding quickly to the challenges of COVID-19, the International Accounting Standards Board (the IASB ® Board) deferred the effective dates for certain standards and amendments, and granted relief to lessees in accounting for rent concessions. – New standards and interpretations issued by the IASB Board have a single effective date. Find advance information for Standards MT Release 2021 in MyStandards. The IFRS Foundation has published educational material to highlight how existing requirements in IFRS Standards require companies to consider climate-related matters when their effect is material to the financial statements. To ensure that this update in referencing does not change which assets and liabilities qualify for recognition in a business combination, or create new Day 2 gains or losses, the amendments introduce new exceptions to the recognition and measurement principles in IFRS 3. Chair of the IFRS Foundation Trustees Erkki Liikanen delivered the keynote speech at the UNCTAD Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting, introducing the Trustees' Consultation Paper on Sustainability Reporting. Amendments to IAS 16, Property, Plant and Equipment (PPE) – Proceeds before Intended Use, introduce new guidance. They can be early adopted. in the case of subjective acceleration clauses). The IASB Board has relaxed IFRS 16 requirements for lessees accounting for rent concessions in lease agreements. This edition, presented in three volume parts, contains the IFRS ® Standards, including IAS ® Standards, IFRIC® Interpretations and SIC® Interpretations, as required at 1 January 2020. Therefore the effective dates for new IFRS Standards of the European Union and the IASB may differ. applies to lessors as well as lessees; it is more permissive with respect to eligibility. The Board will support the implementation of IFRS 17 over the next three and half years. Effective dates are for annual periods beginning on or after the stated date. US GAAP requires companies to perform an initial screen test as part of their assessment. The 'International Financial Reporting Standards (IFRS) and 2020 Updates' course will help build the knowledge you need in IFRS for success in today's global business world. Public organizations should apply the new revenue standard to annual reporting periods beginning after December 15, 2017. ... Impairment of financial assets under the new standard Revenue from contracts with customers (IFRS 15) ... 2021 Effective Budgeting and Cost Control English Dubai US$ 4900 8 - 12 Aug, 2021 Fast Closing Monthly and Year-End Accounts A company can therefore apply the amendments in annual periods beginning January 1, 2020 by adopting them early. The International Financial Reporting Standards Foundation is a not-for-profit corporation incorporated in the State of Delaware, United States of America, with the Delaware Division of Companies (file no: 3353113), and is registered as an overseas company in England and Wales (reg no: FC023235). Proceeds from selling items (e.g. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. You can view which cookies are used by viewing the details in our privacy policy. Session expired, please refresh your browser. The comment periods for the following projects have been extended by three months: Exposure Draft, General Presentation and Disclosures, extended to September 30, 2020, Discussion Paper, Business Combinations – Disclosures, Goodwill and Impairment, extended to December 31, 2020. The amendments to IFRS 16 are effective for annual periods beginning on or after June 1, 2020, with early adoption permitted. The amendments to IAS 16 therefore better align the accounting for incidental income to that under US GAAP, except for PPE to be rented or sold. costs of producing and selling items before the PPE is available for its intended use; and. Corporate strategy insights for your industry, Explore Corporate strategy insights for your industry, Financial Services Regulatory Insights Center, Explore Financial Services Regulatory Insights Center, Explore Risk, Regulatory and Compliance Insights, Explore Corporate Strategy and Mergers & Acquisitions, Customer service transformation & technology. Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. Eligible rent concessions are those arising as a ‘direct consequence’ of COVID-19 and for which: For lessees, this is an optional practical expedient to be applied consistently to all lease contracts with similar characteristics and in similar circumstances. Detail in the accounting for insurance contracts | Terms and Conditions | Trade mark guidelines | all legal |... Three other trustees hosted live webinars and moderated Q & a sessions the... 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