Here's the article which helps you know the IFRS update of Interpretations and Standards.
International Financial Reporting Standards (IFRS) are growing pretty fast. In this article, we are going to give you the International Accounting Standards Board updates.
New Amendment in the instruments standards:
IFRS 9 allows the companies to apply old standard hedge accounting requirements (IAS 39). Many pre-papers elected this choice among financial institutions. That's why the amendments apply to both IFRS 9 and IAS 39.
The amendments arose from the interest rate benchmarks. The board of financial stability also encouraged the replacement of current benchmarks with local jurisdictions like IBOR with risk-free rates. Maybe some of the hedge accounting requirements affected by the uncertainties from the reform impact on the future cash flows and the timing. The amendments' objective is to give temporary exceptions from applying hedge accounting in the period of arising reform. Once the uncertainty is resolved, the exceptions will come to an end.
And then the next.
New Standard for Primary Financial Statements:
General "Disclosure and Presentation" is the primary step of the "Good communication in the project of Financial Reporting". The proposals are very innovative and have a significant effect on the companies' practices like performance measures.
The distinction between joint ventures and integral & non-integral associates:
The joint ventures and integral associates do not generate a return individually and are independent of the company's other assets. The activities are related to the central business activity of the groups. The financial statements of the groups' impact on both joint ventures and non-integral associates of profit or loss. It also impacts the comprehensive income and financial position of the cash flow.
New Subtotals in the profit or loss statements:
The new standard is always needed for any company to classify the expenses and income into four categories, such as investing, operating, joint ventures, and financing. All the subtotals should be present in these categories.
New requirements in information disaggregation in a better way:
Companies classifying the functions in the P & L needs to be disclosed in a note for the analysis of operating expenses. In the "P & L" category, the unusual expenses and income presented in the "usual" items would be disclosed in a single note. The unusual costs and income are limited to the predicted value. The company doesn't expect annual reporting periods.
Fewer Options in Cash flow statements:
IAS 7 allows the companies in choosing the paid or received, interest and dividends, are classified. The proposal behind the amendments is to represent both the dividend paid and interests as the cash flows in the investing. The board also proposes in operating the profit as the critical point in the indirect method of cash flows.
More Regulation for the measures in Management Performance:
Most of the companies communicate the measures in Management performance but rarely provide reconciliation with the figures of IFRS. The purpose of the board is to include financial statement measures through a note. The mandatory disclosures include reconciliation between the subtotals of each measure.
These are the IFRS updates.
The above article gives you the IFRS Update of standards and interpretations. Hope this is useful for you. Still, you have any queries feel free to comment in the below section. Happy Learning!
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