MABINI COLLEGES INC.
Daet, Camarines Norte
PROF ELECTIVE 1
UPDATES IN FINANCIAL REPORTING STANDARDS
Instruction. Prepare a summary of updates in Financial Reporting standards using tabular format.
ACCOUNTING OLD
STANDARD
Amendment to IFRS 16,
‘Leases’ – Covid-19
related rent concessions
Amendments to The Board has been
monitoring the
IFRS 17 and IFRS 4,
implementation of IFRS 17
'Insurance contracts' Insurance Contracts since it
deferral of IFRS 9 was published in May 2017
and has learnt about
concerns and
implementation issues. The
Board has previously stated
that it would consider
taking extra measures to
address issues that arose
during implementation. At
the Board's October 2018
meeting, a list of 25
prospective standard
modifications was
developed, as well as the
criteria against which any
potential amendment will
be evaluated. On June 26,
2019, an exposure draft of
proposed revisions was
published, with comments
NEW EFFECTIVE DATE
The IASB issued Covid-19- The practical expedient was
Related Rent Concessions initially confined to rent
in May 2020. (Amendment discounts, with any
to IFRS 16). The statement reduction in lease payments
changed IFRS 16 Leases to only affecting payments
exempt lessees from due on or before June 30,
determining if a COVID- 2021.
19-related rent concession
is a lease modification.
Because lessees continue to
get COVID-19-related rent
discounts from lessors, and
because the COVID-19
pandemic's impacts are still
being felt, the IASB
decided to investigate
whether the practical
expedient should be
extended.
The following are the most The IFRS 17 modifications
significant changes brought apply to year periods
about by Amendments to starting on or after January
IFRS 17 and the Extension 1, 2023. It is possible to
of the Temporary apply earlier. They are used
Exemption from Applying after the fact.
IFRS 9 (Amendments to
IFRS 4):
The Temporary Exemption
•Change the fixed expiry
from Applying IFRS 9
date for the temporary
(Amendments to IFRS 4) is
exemption in IFRS 4
extended to year periods
Insurance Contracts from
beginning on or after
applying IFRS 9 Financial
January 1, 2023, deferring
Instruments, so that entities
the amendment's stated
would be required to apply
expiry date.
IFRS 9 for annual periods
beginning on or after 1
January 2023. Deferral of
the date of initial
application of IFRS 17 by
two years to annual periods
beginning on or after 1
January 2023.
 due by September 25, 2019.
Following the completion
of the consultation period,
the IASB modified its
suggestions and took
additional feedback from
stakeholders into account,
resulting in the final
changes presented today.
Amendments to IAS The Board released its
ideas in the Exposure Draft
1, Presentation of
ED/2015/1 Classification of
financial Liabilities in February
statements’ on 2015. (Proposed
classification of amendments to IAS 1).
liabilities From December 2015 to
September 2019, the Board
considered comments on
the ED, halting the project
between 2016 and 2018 to
finalize amendments to the
Conceptual Framework's
definition of a liability. The
•Optional scope exclusion
for loan contracts that
transfer major insurance
risk, as well as additional
scope exclusion for credit
card and similar contracts
that give insurance
coverage.
•Clarification of the
implementation of IFRS 17
in interim financial
statements, allowing
reporting entities to choose
their own accounting
approach. Changes to the
applicable disclosure
requirements and
clarification of the
application of contractual
service margin (CSM)
attributable to investment-
return service and
investment-related service.
The risk mitigation option
has been expanded to cover
owned reinsurance
contracts as well as non-
financial derivatives.
Amendments to compel an
entity that recognizes losses
on onerous insurance
contracts issued at the time
of initial recognition to
additionally recognize a
gain on reinsurance
contracts held. Entities
would report insurance
contract assets and
liabilities in the statement
of financial position
determined using portfolios
of insurance contracts
rather than groups of
insurance contracts, which
would simplify the
presentation of insurance
contracts in the statement of
financial position.
The revisions to IAS 1: The changes will take effect
Classification of Liabilities for annual reporting periods
as Current or Non-current beginning on or after
alter solely how liabilities January 1, 2022, and will
are presented in the be retroactively applied. It
statement of financial is possible to apply earlier.
position, not the amount or
timing of asset recognition,
liability income or
expenses, or the
information that businesses
declare about those items.
They:
 Board made no
fundamental changes to the
proposed revisions as a
result of these
deliberations, but opted to
clarify some parts of them.
IFRS 17, 'Insurance The International
Accounting Standards
contracts'
Board (Board) published
IFRS 4 Insurance Contracts
in March 2004. IFRS 4 was
intended to serve as a
stopgap measure until the
Board finished its initiative
on insurance contracts.
IFRS 4 allowed companies
to adopt a wide range of
accounting procedures for
insurance contracts,
reflecting national
accounting rules and
variations of those
requirements, with some
limitations and disclosures.
With the publication of
IFRS 17 Insurance
Contracts in May 2017, the
Board finished its project
on insurance contracts.
Within the scope of IFRS
17, IFRS 17 supersedes
IFRS 4 and establishes
criteria for the recognition,
measurement, presentation,
and disclosure of insurance
contracts.
Amendments to PAS 16- The issue was first brought
Property, Plant and up by the IFRS
Equipment Interpretations Committee,
which had planned to
•clarify that the
classification of liabilities
as current or non-current
should be based on rights in
place at the end of the
reporting period, and align
the wording in all affected
paragraphs to refer to the
"right" to defer settlement
by at least twelve months,
and make explicit that only
rights in place "at the end
of the reporting period"
should affect liability
classification;
•clear that predictions about
whether an entity will
exercise its right to defer
settlement of a liability
have no bearing on
categorization; and
•make it clear that
settlement refers to the
transfer of cash, stock
instruments, other assets, or
services to the counterparty.
The Board issued IFRS 17 IFRS 17 is effective for
Amendments in June 2020. annual reporting periods
The modifications' goal is beginning on or after
to make it easier for January 1, 2023, however it
organizations to implement can be used earlier if IFRS
the Standard while without 9 is also used.
causing undue disruption or
reducing the value of the
information supplied by
applying IFRS 17.
Other Standards, such as
Amendments to References
to the Conceptual
Framework in IFRS
Standards (released March
2018) and Definition of
Material (Amendments to
IAS 1 and IAS 8) have
made minor consequential
amendments to IFRS 17.
(issued October 2018).
Property, Plant, and The adjustments announced
Equipment — Proceeds today apply to annual
before Intended Use periods beginning on or
(Amendments to IAS 16) after January 1, 2022. It is
 establish an interpretation
of IAS 16 Property, Plant,
and Equipment to address
it. However, the Committee
decided that a narrow-scope
adjustment to IAS 16
would be a better approach
during their talks. The
IASB created an exposure
draft in June 2017 and has
already completed the
revisions.
Note: Indicate sources/references
https://www.iasplus.com/en/projects/completed/leases/ifrs-16-covid-19-2
https://www.iasplus.com/en/news/2020/06/ifrs-17
https://www.iasplus.com/en/news/2020/01/ias-1
https://www.ifrs.org/issued-standards/list-of-standards/ifrs-17-insurance-contracts/
https://www.iasplus.com/en/news/2020/05/ias-16
modifies the standard to possible to apply early.
prohibit deducting from the
cost of an item of property,
plant, and equipment any
proceeds from the sale of
items produced while
bringing the asset to the
location and condition
required for it to operate in
the manner intended by
management. Instead, an
entity records the profit or
loss from the sale of such
products, as well as the cost
of creating those items.