IFRS Update on Current Developments

Developments in International Financial Reporting Standards [IFRS], July 2018

The following IFRSs will have significant impacts for affected entities in the current year and in 2019.

  • IFRS 9 FINANCIAL INSTRUMENTS
    [Effective for annual periods beginning on or after 1 January 2018] IFRS 9 which contains accounting requirements for financial instruments replaces IAS 39 Financial Instruments:Recognition and Measurement. The standard contains requirements in the following areas:
    Classification and measurement, Impairment, Hedge accounting and Derecognition.
    Note: Depending on the chosen approach to applying IFRS 9, the transition can involve one or more than one date of initial application for different requirements.
  • IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS

    [Effective for annual periods beginning on or after 1 January 2018]

    IFRS 15 provides a single, principles based five-step model to be applied to all contracts with customers.

    The five steps in the model are as follows:

    • Identify the contract with the customer
    • Identify the performance obligations in the contract
    • Determine the transaction price
    • Allocate the transaction price to the performance obligations in the contracts
    • Recognise revenue when (or as) the entity satisfies a performance obligation.

    Guidance is provided on topics such as the point in which revenue is recognised, accounting for variable consideration, costs of fulfilling and obtaining a contract and various related matters. New disclosures about revenue are also introduced.

  • IFRS 16 LEASES

    [Effective for annual periods beginning on or after 1 January 2019]
    IFRS 16 specifies how an IFRS reporter will recognise, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17.



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