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Current Issues in Accounting Standards

The document outlines amendments to various IFRS standards, including IAS 21, IFRS 9, IFRS 7, IFRS 18, and IFRS 19, with effective dates ranging from January 1, 2025, to January 1, 2027. Key issues addressed include currency exchangeability, derecognition of financial liabilities, defined profit or loss subtotals, and reduced disclosure requirements for subsidiaries without public accountability. These amendments aim to enhance clarity and guidance in financial reporting practices.

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11 views2 pages

Current Issues in Accounting Standards

The document outlines amendments to various IFRS standards, including IAS 21, IFRS 9, IFRS 7, IFRS 18, and IFRS 19, with effective dates ranging from January 1, 2025, to January 1, 2027. Key issues addressed include currency exchangeability, derecognition of financial liabilities, defined profit or loss subtotals, and reduced disclosure requirements for subsidiaries without public accountability. These amendments aim to enhance clarity and guidance in financial reporting practices.

Uploaded by

shailendshaqialend
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Amendments to IAS 21: The Effects of Changes in Foreign Currency Exchange Rates

Effective Date: January 1, 2025.


Key Issue:
●​ Determining currency exchangeability and the appropriate accounting treatment when it is not.
These amendments provide guidance on when a currency is exchangeable into another currency. A
currency is considered exchangeable if it can be converted in the foreign exchange market at a spot rate
for immediate settlement. If exchangeability is lacking, an estimated exchange rate must be used,
reflecting the rate that would apply if the currency were exchangeable.

Amendments to IFRS 9 and IFRS 7: The Classification and Measurement of Financial Instruments

Effective Date: January 1, 2026.


Key Issues:
●​ Derecognition of financial liabilities
●​ Classification of financial assets
●​ Disclosures
These amendments address issues raised during the post-implementation review of IFRS 9. They clarify
that financial liabilities settled via electronic payment systems are derecognized when the payment
system irrevocably settles the obligation, typically when the entity no longer controls the cash used for
settlement. The amendments also offer guidance on environmental, social, and governance (ESG)-linked
financial assets, requiring assessment under the "solely payments of principal and interest" test. Assets
failing this test are measured at fair value through profit or loss, while those passing may qualify for
amortized cost or fair value through other comprehensive income.

IFRS 18: Presentation and Disclosure in Financial Statements

Effective Date: January 1, 2027.


Key Issues:
●​ Introduces defined profit or loss subtotals
●​ Requires disclosure of management-defined performance measures
●​ Establishes principles for information aggregation

IFRS 19: Subsidiaries without Public Accountability

Effective Date: January 1, 2027.


Key Issue:
●​ Reduced disclosure requirements for eligible subsidiaries.
This standard allows eligible subsidiaries to use IFRS with reduced disclosure requirements if they lack
public accountability. These entities apply the recognition, measurement, and presentation requirements
in other IFRS Accounting Standards but use the disclosure requirements in IFRS 19.
Work Cited

BDO. 31 December 2024 Year-End IFRS Accounting Standards Update. International Financial Reporting

Bulletin 2025/01 January 2025 ed., BDO.

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