Five amendments to IFRSs endorsed for use in the EU
We bring you an overview of new amendments to IFRSs recently endorsed by the European Commission. These are Amendments to IFRS 3, IFRS 16, IAS 16, IAS 37 and Annual Improvements 2018-2020. What are the amendments about?
On 28 June 2021, the EU endorsed the following documents:
- Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework
These amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework.
- Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use
According to the amendments an entity recognises the proceeds from selling items produced while bringing the asset to the location and condition necessary for it to be capable of operating in profit or loss.
- Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts — Cost of Fulfilling a Contract
The amendments clarify what costs an entity considers when assessing whether a contract is onerous.
- Annual Improvements 2018-2020 that make amendments to the four standards (IFRS 1 First-time Adoption of IFRSs, IFRS 9 Financial Instruments, IFRS 16 Leases, IAS 41 Agriculture).
All these amendments were issued in May 2020 and are effective for annual periods beginning on or after 1 January 2022, early application is permitted.
On 30 September 2021, the EU endorsed Amendments to IFRS 16 Covid-19-Related Rent Concessions beyond 30 June 2021. IASB issued these amendments in March 2021. The amendments provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification up to 30 June 2022.
Each company shall apply the amendments as from 1 April 2021 for financial years starting, at the latest, on or after 1 January 2021. You can find more information about these amendments in our article IASB extends practical expedient regarding COVID-19-related rent concessions.