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IFRS 4 (amendmen) ‘Insurance contracts’ |
The main amendments include:
- deferral of the date of initial application of IFRS 17 by two years to annual reporting periods beginning on or after 1 January 2023,
- extension of the temporary exemption from applying IFRS 9 by two years. As a result, the qualifying entities will be required to apply IFRS 9 for annual period beginning on or after 1 January 2023.
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The standard’s amendments did not have a material impact on the financial statements in the period of their first application. |
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IFRS 9 (amendment) ‘Financial instruments’ and IFRS 7 (amendment) ‘Financial instruments: disclosures’ and IFRS 4 (amendment) ‘Insurance contracts’ and IFRS 16 (amendment) ‘Leasing’
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The main amendments include:
- accounting for modifications to financial assets, financial liabilities and lease liabilities required as a direct consequence of the interest rate benchmark reform and performed on an economically equivalent basis, by updating the effective interest rate,
- hedge accounting is not discontinued solely because of the interest rate benchmark reform. Hedging relationships (and related documentation) must be amended to reflect modifications to the hedged item, hedging instrument and hedged risk. Amended hedging relationships should meet all qualifying criteria to apply hedge accounting, including effectiveness requirements.,
- in order to allow users to understand the nature and extent of risks arising from the interest rate benchmark reform to which the entity is exposed to and how
the entity manages those risks as well as the entity’s progress in transitioning from interest rate benchmarks to alternative benchmark rates, and how the entity is managing this transition, the amendments require that an entity discloses information about:
- how the transition from interest rate benchmarks to alternative benchmark rates is managed, the progress made at the reporting date, and the risks arising from the transition,
- quantitative information about non- derivative financial assets, non-derivative financial liabilities and derivatives that continue to reference
interest rate benchmarks subject to the reform, disaggregated by significant interest rate benchmark,
- to the extent that the interest rate benchmark reform has resulted in changes to an entity’s risk management strategy, a description of these changes and how is the entity managing those risks.
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The impact of the analysis of the standard’s amendments on the financial statements in the period of their first application is described in Note 47.5 and Note 23. |
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IFRS 16 (amendment) ‘Leasing’
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The amendments introduce an optional practical expedient that simplifies how a lessee accounts for rent concessions that are a direct consequence of Covid-19. A lessee that applies the practical expedient is not required to assess whether eligible rent concessions are lease modifications, and accounts for them in accordance with other applicable guidance. The resulting accounting will depend on the details of the rent concession. For example, if the concession is in the form of a one-off reduction in rent, it will be accounted for as a variable lease payment and be recognized in profit or loss.
The practical expedient will only apply if:
- the revised consideration is substantially the same or less than the original consideration,
- the reduction in lease payments relates to payments due on or before 30 June 2022, and
- no other substantive changes have been made to the terms of the lease.
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The standard’s amendments did not have a material impact on the financial statements in the period of their first application. |
