ifrs year end update dec 2010[1]

8/4/2019 IFRS Year End Update Dec 2010[1]

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IFRS update for

fnancial years ending

31 December 2010

(including all standards and interpretations

issued at 30 September 2010)



2 IFRS update for nancial years ending 31 December 20102008 International Financial Reporting Standards update2

Contents

Introduction 3

Section 1: New and amended standards and interpretations applicable

to the December 2010 year-end 5

IFRS 1 First-time Adoption of International Financial Reporting

Standards — Additional Exemptions for First-time Adopters (Amendments) 5

IFRS 2 Group Cash-settled Share-based Payment Arrangements 5

IFRS 3 Business Combinations (Revised) 6

IAS 27 Consolidated and Separate Financial Statements (Amendment) 7

IAS 39 Financial Instruments: Recognition and Measurement — Eligible

hedged items (Amendments) 7

IFRIC 17 Distributions of Non-cash Assets to Owners 8

Improvements to International Financial Reporting Standards

(issued 2008) 9


(issued 2009) 10

Section 2: New and amended standards and interpretations

applicable to December 2011 year-ends 12

IFRS 1 First-time Adoption of International Financial Reporting Standards

— Limited Exemption from Comparative IFRS 7 Disclosures

for First-time Adopters 12

IAS 24 Related Party Disclosures (Revised) 12

IAS 32 Financial Instruments: Presentation — Classification of

Rights Issues (Amendment) 13

IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendment) 13

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 14


(issued 2009) 15



3IFRS update for nancial years ending 31 December 20102008 International Financial Reporting Standards update 3

Section 3: New and amended standards and interpretations issued

that are effective subsequent to December 2011 year-ends 18

IFRS 9 Financial Instruments 18

Section 4: Items not taken onto the Interpretations Committee

agenda where the Interpretations Committee has provided

guidance on the interpretation of IFRS 19

Section 5: Exposure drafts of new and amended standards

and interpretations that are still to be issued as standards

and interpretations 23



IFRS update for nancial years ending 31 December 20103

Introduction

Companies reporting under International Financial Reporting

Standards (IFRS) continue to face a steady ow of new standards

and interpretations. The volume of changes to IFRS is signicant

and is likely to continue in the foreseeable future.

The nature of the changes ranges from signicant amendments

to fundamental principles to some minor changes included in the

annual improvements process. They will affect many differentareas of accounting such as the presentation of nancial

statements, accounting for employee benets and business

combinations.

Some of the changes have implications that go beyond matters

of accounting, potentially also impacting the IT systems of many

companies. Furthermore, these changes may impact business

decisions, such as the design of share-based payment plans or

the structuring of transactions.

The challenge for preparers will be to gain an understanding of

what lies ahead.

Purpose of this publicationThis publication provides an overview of the upcoming changes

in standards and interpretations for entities that have a

December year-end. The publication does not attempt to provide

an in-depth analysis or discussion of the topics. Rather, the

objective is to highlight key aspects of these changes. Reference

should be made to the text of the standards and interpretations

before taking any decisions or actions.

As many of the changes which come into effect in the future,

this publication focuses, in particular, on December 2010

reporting, but also considers the effect on December 2011

reporting and beyond.

This publication includes all changes nalised by 30 September

2010. The Table of Contents contains the list of all such

changes, which are presented in the following order:

Section 1: New and amended standards and new interpretations

that must be applied to nancial years ending December 2010.


that must be applied to nancial years ending December 2011,

although entities may elect to apply some of these in an earlier

period.


issued that are effective subsequent to December 2011

year-ends, although entities may elect to apply some of these in

an earlier period.

Section 4: Items not taken onto the International Financial

Reporting Standards Interpretations Committee (Interpretations

Committee) agenda, when the reason for the rejection providessome accounting guidance that assists with the interpretation

and application of IFRS.

Section 5: Exposure drafts of new and amended standards and

interpretations that are still to be nalised.

Sections 1 and 2 provide a high-level overview of the key

requirements of each new and amended standard issued by

the International Accounting Standards Board (IASB) and

interpretations issued by the Interpretations Committee. This

overview provides a summary of the transitional requirements

and a brief discussion of the impacts that the changes may have

on an entity’s nancial statements. These sections are presentedin a numerical order affecting 31 December 2010 and 2011

year-ends, based on the effective dates contained within the

standards (albeit that there are provisions that allow entities to

adopt in earlier periods).

Where a standard or interpretation has been issued, but an

entity has yet to apply it, IAS 8 Accounting Policies, Changes in

Accounting Estimates and Errors requires the entity to disclose

any known or reasonably estimable information relevant to

understanding the possible impact that the new standard or

interpretation will have on the nancial statements when it is

initially applied. Therefore, management must disclose, in

the December 2010 report, the impact of the standards andinterpretations noted in Sections 2 and 3, or indicate the reason

for not doing so.

Section 3 provides an overview of the new or amended

standards and interpretations issued that affect years

subsequent to the December 2011 year-end.

Section 4 provides a summary of the reasons published in

the IFRIC Update of the issues on which the Interpretations

Committee was requested to provide an interpretation, but felt

that the existing IFRS or IFRIC interpretations included adequate

guidance. While these decisions are not authoritative, they

provide a view about the application of the standards.



IFRS update for nancial years ending 31 December 2010 4

IFRS core tools

Frequent changes to IFRS add to the changes you face when

approaching your nancial reporting cycle. Our IFRS Core Tools

provide the starting point for assessing the impact of changes

to IFRS.

These tools include a number of practical building blocks thatcan help you to navigate the changing landscape of IFRS. They

include this publication, IFRS Update, and the following:

International GAAP Disclosure Checklist

Our 2010 International GAAP Disclosure Checklist assists with

the preparation of nancial statements in accordance with IFRS.

Good Group (International) Limited

Our publication Good Group (International) Limited, is an

illustrative set of nancial statements (both interim and annual)

incorporating all of the new disclosures that arise from the

changes required by standards effective for the December 2010

year-end. It can also assist in understanding the impact on the

nancial statements. This publication is supplemented by

illustrative nancial statements that are aimed at specic sectors

and industries. These now include:

• Good Bank (International) Limited

• Good Insurance (International) Limited

• Good Real Estate Group (International) Limited

• Good Investment Fund Limited

• Good Petroleum (International) Limited

• Good Mining (International) Limited

Also available from Ernst & Young:

International GAAP 2010

Our publication International GAAP 2010 is a comprehensive

analysis of all standards and interpretations, including those

mentioned in this publication, and it provides examples that

illustrate how the requirements are applied. This publication is

currently being updated and International GAAP 2011 will be

published within the next few months.

Ernst & Young IFRS Change Reporter 2010

Ernst & Young has developed a computer-based tool called IFRS

Change Reporter 2010. This tool is designed to be used by

Ernst & Young engagement teams to support companies,

reporting under IFRS, in making an assessment of the relevance

to them of the upcoming changes described in this publication.

This publication is also intended to facilitate the impact

assessment carried out with the help of that tool.

Other Ernst & Young publications

References to other Ernst & Young publications that containfurther details and discussion on these topics have also been

included, all of which can be downloaded from our website

www.ey.com/ifrs.




Section 1: New and amended standards

and interpretations applicable to the

December 2010 year-end

IFRS 1 First-time Adoption of International Financial

Reporting Standards — Additional Exemptions for

First-time Adopters (Amendments)

Effective for annual periods beginning on or after 1 January 2010.

Key requirements

IFRS 1 has been amended to provide additional exemptions fromfull retrospective application of IFRS for the measurement of oil &

gas assets and leases as follows:

• Entities that have measured exploration and evaluation

assets, and assets in the development or production phases

using ‘full cost accounting’, can measure these assets at the

amounts determined under previous GAAP at the date of

transition. Where an entity uses this exemption it must test all

such assets for impairment at the date of transition to IFRS.

• Where an entity uses the above deemed cost exemption for

oil and gas assets, the related decommissioning and

restoration liabilities are measured at the date of transition in

accordance with IAS 37 Provisions, Contingent Liabilities andContingent Assets. Any adjustment of the carrying amount

under previous GAAP is recognised in retained earnings.

• Where an entity has, under previous GAAP, made the same

determination of whether an arrangement contains a lease as

required by IFRIC 4 Determining whether an Arrangement

contains a Lease, but that assessment was made at a date

other than that required by IFRIC 4, the entity does not need

to reassess that determination.

Transition

The amendments may be applied earlier than the effective date

and this fact must be disclosed.

Impact

The amendments will provide relief to entities with oil and gas

assets and leases that are rst-time adopters, by reducing the

cost of transition to IFRS.


Further information about this amendment can be found in

Ernst & Young’s publication Supplement to IFRS outlook Issue 52

(July 2009).

IFRS 2 Group Cash-settled Share-based Payment

Arrangements


Key requirements

IFRS 2 has been amended to clarify the accounting for group

cash-settled share-based payment transactions, where asubsidiary receives goods or services from employees or

suppliers but the parent or another entity in the group pays for

those goods or services. The amendments clarify that the scope

of IFRS 2 includes such transactions. The amendment

incorporates the guidance from IFRIC 8 Scope of IFRS 2 and

IFRIC 11 Group and Treasury Share Transactions and hence both

IFRIC 8 and IFRIC 11 have been withdrawn.

Transition

This amendment is applied retrospectively, in accordance with

IAS 8 Accounting Policies, Changes in Accounting Estimates and

Errors in respect of changes in accounting policy. Earlier

application is permitted and must be disclosed.

Impact

For group reporting and consolidated nancial statements, the

amendment claries that if an entity receives goods or services

that are cash settled by shareholders not within the group, they

are outside the scope of IFRS 2. Management will need to

consider any such past transactions.

The amendment may have a signicant affect on the cost

recognised in separate nancial statements of an entity that has

material share-based payment awards that have not previously

been accounted for in accordance with IFRS 2.

Other Ernst & Young publicationsFurther information about this amendment can be found in


(June 2009).




IFRS 3 Business Combinations (Revised)

Effective for periods beginning on or after 1 July 2009.

Key requirements

A change to the scope of IFRS 3 increases the number of

transactions to which it must be applied, by including

combinations of mutual entities and combinations without

consideration (e.g., dual listed shares).

The more signicant changes in accounting for business

combinations are as follows:

• Entities have a choice, for each business combination entered

into, to measure non-controlling interests (previously minority

interests) in the acquiree either at their fair value or at their

proportionate interest in the acquiree’s net assets.

• In step acquisitions, previously held interests are remeasured

to fair value at the date of the subsequent acquisition and this

value is included in calculating goodwill. Any gain or loss

arising from the re-measurement is recognised in prot or loss.

• Contingent consideration is formally dened as additionalconsideration by the acquirer to the former owners (or return

of consideration from the former owners). All contingent

consideration is measured at fair value at the date of

acquisition, and subsequent changes are recognised in prot

and loss rather than adjusting goodwill recognised on the

acquisition.

• Acquisition-related costs are expensed through prot or loss

at the time that such services are received.

• Contingent liabilities of the acquiree are recognised at their

fair value if there is a present obligation that arises from a

past event and its fair value can be measured reliably,

regardless of the probability of a cash ow arising.

• The acquirer will reassess all assets and liabilities acquired to

determine their classication or designation as required by

other standards. There are two exceptions, namely for leases

and insurance contracts, which are classied and designated

based on the contractual terms and conditions at the date of

inception of the contract.

• If the acquirer reacquires a right that it had previously

granted to an acquiree, the right will be recognised as an

identiable intangible asset, separately from goodwill.

• All consideration transferred needs to be analysed to

determine whether it is part of the exchange transaction

or for another transaction, such as remuneration for the

provision of future services or settlement of existing

relationships.

• Indemnication assets are recognised and measured based

on the same measurement principles and assumptions asthe related liability.

• The standard requires that deferred taxation assets

or liabilities arising from the net assets acquired in a

business combination be measured in accordance with

IAS 12 Income Taxes.

Transition

IFRS 3 applies prospectively to business combinations occurring

after 1 July 2009. If the standard is applied before this date, the

amendments to IAS 27 Consolidated and Separate Financial

Statements must also be applied at the same date. This standard

includes consequential amendments to 14 other standards and

interpretations.

Impact

The revised standard (including the revised IAS 27) will have a

signicant impact on prot and loss reported in the period of an

acquisition, the amount of goodwill recognised in a business

combination and prot and loss reported in future periods.

The negotiation of contracts now needs to take into account the

accounting consequences summarised above, especially as they

apply to any contingent considerations and amounts transferred

to employees. The greater time and effort that will be required

to identify and measure the elements in the transaction may well

increase the costs associated with such transactions. In addition,

the future intentions with respect to the acquiree should be

considered, as these may inuence the choice of method to

measure non-controlling interests.


More information about this revised standard can be found in

Ernst & Young’s publications IFRS Alert Issue 23 (January 2008)

and Business Combinations and Consolidated Financial

Statements — How the changes will impact your business.




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IAS 27 Consolidated and Separate Financial

Statements (Amendment)


Key requirements

The most signicant changes to IAS 27 are as follows:

• Changes in ownership interests of a subsidiary (that do notresult in loss of control) will be accounted for as an equity

transaction and will have no impact on goodwill nor will it give

rise to a gain or loss.

• Losses incurred by the subsidiary will be allocated between

the controlling and non-controlling interests (previously

referred to as ‘minority interests’); even if the losses exceed

the non-controlling equity investment in the subsidiary.

• On loss of control of a subsidiary, any retained interest will be

remeasured to fair value and this will impact the gain or loss

recognised on disposal.

Transition

IAS 27 is applied retrospectively, with the following exceptions:

• The allocation of comprehensive income to non-controlling

interests in periods before the standard is applied is not

restated.

• Changes in ownership interests (without loss of control)

occurring before the standard is applied are not restated.

• The carrying amount of an investment in a former subsidiary,

where control was lost in periods before the standard is

applied, is not restated. Accordingly, the gains or losses

arising from such transactions are not recalculated.

If the standard is applied before 1 July 2009, IFRS 3 Business

Combinations (Revised), together with all the consequentialamendments in these two standards, must also be applied at the

same date.

Impact

Subsequent to application of the standard, the impact of

transactions where control is lost/not lost and the allocation of

losses of a subsidiary will impact the reported prot and loss of

an entity, both in terms of timing and on an aggregate basis.


More information about these amendments can be found in

Ernst & Young’s publications IFRS Alert Issue 23 (January 2008)

and Business Combinations and Consolidated FinancialStatements — How the changes will impact your business.

IAS 39 Financial Instruments: Recognition and

Measurement — Eligible hedged items (Amendment)


Key requirements

The nal amendment addresses only the designation of a

one-sided risk in a hedged item, and the designation of inationas a hedged risk or portion in particular situations. The

amendment claries that an entity is permitted to designate a

portion of the fair value changes or cash ow variability of a

nancial instrument as a hedged item.

An entity can designate the changes in fair value or cash ows

related to a one-sided risk as the hedged item in an effective

hedge relationship. In most cases, the intrinsic value of a

purchased option hedging instrument, but not its time value,

reects a one-sided risk in a hedged item.

The designated risks and portions of cash ows or fair values in

an effective hedge relationship must be separately identiable

components of the nancial instrument. Additionally, the

changes in cash ows or fair value of the entire nancial

instrument arising from changes in the designated risks and

portions must be reliably measurable.

The amendment indicates that ination is not a separately

identiable risk and cannot be designated as the hedged risk

unless it represents a contractually specied cash ow.

Transitional provisions

If changes in accounting policies are required, they are applied

retrospectively in accordance with IAS 8 Accounting Policies,

Changes in Accounting Estimates and Errors. Retrospective

re-designation of hedge relationships is not permitted.

Impact

Entities that have designated options as hedging instruments of

one-sided risks, including the imputed time value, and/or have

designated the effects of ination on xed rate nancial assets as

the hedged risks, will be signicantly impacted by this amendment.

Such arrangements may no longer be accounted for as effective

hedge relationships and management will need to re-consider its

hedging strategy for the future.


More information about this amendment can be found in

Ernst & Young publication Supplement to IFRS outlook Issue 11(August 2008).




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IFRIC 17 Distributions of Non-cash Assets to Owners

Effective for annual periods beginning on or after 1 July 2009.

Key requirements

This interpretation provides guidance on accounting for

arrangements whereby an entity distributes non-cash assets to

shareholders either as a distribution of reserves or as dividends.

The interpretation applies to all non-reciprocal distributions of

non-cash assets, including those giving the shareholders a choice

of cash or other assets, provided that:

• All owners of the same class of equity instruments are treated

equally

And

• The non-cash assets distributed are not ultimately controlled

by the same party before and after the distribution (i.e.,

excluding transactions under common control)

An entity must recognise a liability for the distribution when it is

no longer at the discretion of the entity (i.e., when shareholderapproval is obtained, if required). The liability is initially

recognised at the fair value of the assets to be distributed and is

remeasured at the end of each reporting period and immediately

before settlement.

At settlement date, the difference between the carrying amount

of the assets to be distributed and the liability is recognised in

prot or loss as a separate line item.

IFRS 5 has also been amended to require that assets are

classied as held for distribution only when they are available

for distribution in their present condition and the distribution is

highly probable.

Transition

This interpretation is to be applied prospectively. Earlier

application is permitted, however, IFRS 3 (revised 2008), IAS 27

(amended May 2008) and IFRS 5 (amended by this interpretation)

must also be applied from the same date.

Impact

The changes are likely to require a change in accounting policy

for many entities, which may result in a signicant prot being

recognised at the date of settlement that may not have been

previously recognised. As any gain will only be recognised after

the declaration of a dividend, management will need to consider

if there are any implications on the entity’s ability, such as

statutory requirements, to declare dividends.


More information about this interpretation can be found in

Ernst & Young’s Supplement to IFRS outlook Issue 21

(November 2008).




Improvements to International Financial Reporting

Standards (issued 2008)

Generally, these amendments are effective for periods

beginning on or after 1 January 2009.

Key requirements

The Improvements to IFRS project is an annual process that theIASB has adopted to deal with non-urgent but necessary

amendments to IFRS (the ‘annual improvements process’).

In the rst omnibus edition, 34 amendments are dealt with by

the Board. The Board has separated the amendments into two

parts: Part I deals with changes the Board identied resulting in

accounting changes; and Part II deals with either terminology or

editorial amendments that the Board believes will have minimal

impact. The following summarises the amendments included in

Parts I that will only be effective for December 2010 year ends.


More information about amendments can be found in


(June 2008).

Part I

IFRS 5 Non-current AssetsHeld for Sale and

Discontinued Operations

Plan to sell the controlling interest in a subsidiary• When a subsidiary is held for sale, all of its assets and liabilities will be classied as held for sale under IFRS 5, even

when the entity retains a non-controlling interest in the subsidiary after the sale. This amendment is effective forperiods commencing 1 July 2009.




IFRS 2 Share-based

Payment

Scope of IFRS 2 and revised IFRS 3

• Claries that the contribution of a business on formation of a joint venture and combinations under commoncontrol are not within the scope of IFRS 2. Effective for periods beginning on or after 1 July 2009.

IFRS 5 Non-current

Assets Held for Sale and

Discontinued Operations

Disclosures

• Claries that the disclosures required in respect of non-current assets (or disposal groups) classied as held for saleor discontinued operations are only those set out in IFRS 5. Effective prospectively for annual periods beginning onor after 1 January 2010.

IFRS 8 Operating

Segments

Disclosure of information about segment assets

• Segment assets and liabilities need only be reported when those assets and liabilities are included in measures usedby the chief operating decision maker. Effective for annual periods beginning on or after 1 January 2010.

IAS 1 Presentation of

Financial Statements

Current/non-current classication of convertible instruments

• The terms of a liability that could at anytime result in its settlement by the issuance of equity instruments at theoption of the counterparty do not affect its classication. Effective for annual periods beginning on or after 1January 2010.

IAS 7 Statement of Cash Flows

Classication of expenditures on unrecognised assets• Only expenditure that results in a recognised asset can be classied as a cash ow from investing activities.


IAS 17 Leases Classication of land and buildings

• The specic guidance on classifying land as a lease has been removed so that only the general guidance remains.Effective for annual periods beginning on or after 1 January 2010.

IAS 18 Revenue Effective in December 2009 year-ends.

IAS 36 Impairment of

Assets

Unit of accounting for goodwill impairment testing

• The largest unit permitted for allocating goodwill acquired in a business combination is the operating segmentdened in IFRS 8 before aggregation for reporting purposes. See Section 2. Effective prospectively for annualperiods beginning on or after 1 January 2010.

IAS 38 Intangible Assets Consequential amendments arising from IFRS 3

• If an intangible acquired in a business combination is identiable only with another intangible asset, the acquirer

may recognise the group of intangibles as a single asset provided the individual assets have similar useful lives.

Measuring fair value

• The valuation techniques presented for determining the fair value of intangible assets acquired in a businesscombination are only examples and are not restrictive on the methods that can be used.

• The amendments are effective for annual periods beginning on or after 1 July 2009.



Generally, these amendments are effective for periods beginning

on or after 1 January 2010.

Key requirements

In the second omnibus edition, 15 amendments to 12 standards

are dealt with by the IASB. These amendments are summarised

in the table below.




IAS 39 Financial

Instruments: Recognition

and Measurement

Assessment of loan prepayment penalties as embedded derivatives

• A prepayment option is considered closely related to the host contract when the exercise price reimburses thelender up to the approximate present value of lost interest for the remaining term of the host contract. Effective forannual periods beginning on or after 1 January 2010.

Scope exemption for business combination contract

• The scope exemption for contracts between an acquirer and a vendor in a business combination to buy or sell anacquiree at a future date applies only to binding forward contracts, not derivative contracts where further actions are

still to be taken. Effective prospectively to all unexpired contracts for annual periods beginning on or after 1 January2010.

Cash ow hedge accounting

• Gains or losses on cash ow hedges of a forecast transaction that subsequently results in the recognition of anancial instrument or on cash ow hedges or recognised nancial instruments should be reclassied in the periodthat the hedged forecast cash ows affect prot or loss. Effective prospectively to all unexpired contracts forannual periods beginning on or after 1 January 2010.

IFRIC 9 Reassessment of

Embedded Derivatives

Scope of IFRIC 9 and IFRS 3

• IFRIC 9 does not apply to possible reassessment at the date of acquisition to embedded derivatives in contractsacquired in a combination between entities or businesses under common control or the formation or a jointventure. The amendment is effective prospectively for annual periods beginning on or after 1 July 2009.

IFRIC 16 Hedges of a Net

Investment in a Foreign

Operation

Amendment of the restriction on the entity that can hold hedging instruments

• Qualifying hedging instruments may be held by any entity within the group, provided the designation,documentation and effectiveness requirements of IAS 39 are met. See Section 1 for further details. The

amendment is effective for annual periods beginning on or after 1 July 2009.


More information about the annual improvements can be

found in Ernst & Young’s Supplement to IFRS outlook Issue 40

(April 2009).




IFRS 1 First-time Adoption of International Financial

Reporting Standards — Limited Exemption from

Comparative IFRS 7 Disclosures for First-time

Adopters


Key requirementsIFRS 1 has been amended to allow rst-time adopters to utilise

the transitional provisions in IFRS 7 Financial Instruments:

Disclosures as they relate to the March 2009 amendments to

the standard. These provisions give relief from providing

comparative information in the disclosures required by the

amendments in the rst year of application.

To achieve this, the transitional provisions in IFRS 7 were

amended to clarify that the disclosures need not be provided for:

• Annual or interim periods, including any statement of

nancial position, presented with an annual comparative

period ending before 31 December 2009, and

• Any statement of nancial position as at the beginning of the

earliest comparative period as at a date before 31 December

2009.

Transition

The amendments may be applied earlier than the effective date

and this fact must be disclosed.

Impact

The amendments can provide relief to rst-time adopters, by

reducing the cost and resources required to provide certain

comparative disclosures.




(February 2010).

IAS 24 Related Party Disclosures (Revised)


Key requirements

The denition of a related party has been claried to simplify the

identication of related party relationships, particularly in

relation to signicant inuence and joint control.

A partial exemption from the disclosures has been included for

government-related entities. For these entities, the general

disclosure requirements of IAS 24 will not apply. Instead,

alternative disclosures have been included, requiring:

• The name of the government and the nature of its

relationship with the reporting entity

• The nature and amount of individually signicant transactions

• A qualitative or quantitative indication of the extent of other

transactions that are collectively signicant.

Transition

This amendment is applied retrospectively, in accordance withIAS 8 Accounting Policies, Changes in Accounting Estimates and

Errors. Earlier application is permitted for either the partial

exemption for government-related entities or the entire revised

standard, with disclosure of such fact.

Impact

Entities will need to consider the revised denition of related

parties to ensure all the relevant information is still being

captured. The reduced disclosures for government-related

entities may provide some relief. However, a substantial amount

of work may be required to identify these relationships and

ensure information is captured for those disclosures that are

now required.




(November 2009).


and interpretations applicable to

December 2011 year-ends




IAS 32 Financial Instruments: Presentation —

Classication of Rights Issues (Amendment)

Effective for annual periods beginning on or after 1 February 2010.

Key requirements

The denition of a nancial liability has been amended to

classify rights issues (and certain options or warrants) as equityinstruments if:

• The rights are given pro rata to all of the existing owners of the

same class of an entity’s non-derivative equity instruments

• In order to acquire a xed number of the entity’s own equity

instruments for a xed amount in any currency.

Transition

This amendment is applied retrospectively, in accordance with

IAS 8 Accounting Policies, Changes in Accounting Estimates

and Errors in respect of changes in accounting policy. Earlier


ImpactThe amendment will provide relief to entities that issue rights

(xed in a currency other than their functional currency), from

treating the rights as derivatives with fair value changes

recorded in prot or loss.

Rights issued in foreign currencies that were previously

accounted for as derivatives will now be classied as equity

instruments. Application of the change will result in the reversal

of prots or losses previously recognised, as application of the

change will be retrospective. In addition, the impact on

previously reported results would be a reclassication in equity.


Further information about this amendment can be found inErnst & Young’s publication Supplement to IFRS outlook Issue 58

(October 2009).

IFRIC 14 Prepayments of a Minimum Funding

Requirement (Amendment)


Key requirements

IFRIC 14 provides guidance on assessing the recoverable

amount of a net pension asset. The amendment permits anentity to treat the prepayment of a minimum funding

requirement as an asset.

Transition

The amendment is applied retrospectively to the beginning of

the earliest period presented in the rst nancial statements in

which the entity applied the original interpretation.

Impact

Entities will need to assess whether prepayments made will now

need to be re-assessed for their impact on the recoverability of

pension assets. Entities applying the corridor approach to

recognise actuarial gains and losses will also need to take

account of the interaction between the corridor and the

recoverability of the plan assets.




(November 2009).




IFRIC 19 Extinguishing Financial Liabilities with

Equity Instruments


Key requirements

IFRIC 19 claries that equity instruments issued to a creditor to

extinguish a nancial liability are consideration paid inaccordance with paragraph 41 of IAS 39 Financial Instruments;

Recognition and Measurement. The equity instruments issued at

measured at their fair value, unless this cannot be reliably

measured, in which case they are measured at the fair value of

the liability extinguished. Any gain or loss is recognised

immediately in prot or loss.

If only part of a nancial liability is extinguished, the entity

needs to determine whether part of the consideration paid

relates to a modication of the liability outstanding. If so, the

consideration paid is allocated between the two parts.

The interpretation does not apply where the creditor is acting in

the capacity of a shareholder, common control transactions, and

where the issue of equity shares was part of the original terms

of the liability.

Transition

If the amendment results in a change in accounting policy, this is

applied retrospectively, in accordance with IAS 8 Accounting

Policies, Changes in Accounting Estimates and Errors from the

beginning of the earliest comparative period presented. Earlier


Impact

In many cases, the modications will result in a gain recognised

in prot or loss as the fair value of the equity issued will often be

less than the carrying value of the liability. Determining the fair

value of the equity may be difcult if the shares are not actively

traded. As the interpretation is applied retrospectively,

determining past fair values may be particularly difcult.

Where these transactions occur within the same group, entities

will need to develop an appropriate accounting policy as they are

scoped out of the interpretation.


Further information about this Interpretation can be found in


(November 2009).






Generally, these amendments are effective for periods beginning

on or after 1 January 2011 unless otherwise stated. Earlier

application is permitted in all cases.

Key requirements

In this omnibus edition, the IASB issued eleven amendments to

six standards and one interpretation. The following summarises

these amendments.

IFRS 1 First-time Adoption of International

Financial Reporting

Standards

Accounting policy changes in the year of Adoption• The amendment claries that, if a rst-time adopter changes its accounting policies or its use of the exemptions in

IFRS 1 after it has published an interim nancial report in accordance with IAS 34 Interim Financial Reporting, itneeds to explain those changes and update the reconciliations between previous GAAP and IFRS. The amendmentis applied prospectively.

IFRS 1 First-time

Adoption of International

Financial Reporting

Standards

Revaluation basis as deemed cost

• The amendment allows rst-time adopters to use an event-driven fair value as deemed cost, even if the eventoccurs after the date of transition, but before the rst IFRS nancial statements are issued. When suchremeasurement occurs after the date of transition to IFRS, but during the period covered by its rst IFRS nancialstatements the adjustment is recognised directly in retained earnings (or if appropriate, another category ofequity). Entities that adopted IFRS in previous periods are permitted to apply the amendment retrospectively in therst annual period after the amendment is effective.

IFRS 1 First-time

Adoption of International

Financial ReportingStandards

Use of deemed cost for operations subject to rate regulation

• The amendment expands the scope of ‘deemed cost’ for property, plant and equipment or intangible assets to

include items used subject to rate regulated activities. The exemption will be applied on an item-by-item basis. Allsuch assets will also need to be tested for impairment at the date of transition. The amendment allows entities withrate-regulated activities to use the carrying amount of their property, plant and equipment and intangible balancesfrom their previous GAAP as its deemed cost upon transition to IFRS. These balances may include amounts thatwould not be permitted for capitalisation under IAS 16 Property, Plant and Equipment, IAS 23 Borrowing Costs andIAS 38 Intangible Assets. The amendment is applied prospectively.

IFRS 3 Business

Combinations

Transition requirements for contingent consideration from a business combination that occurred before theeffective date of the revised IFRS

• The amendment claries that the amendments to IFRS 7 Financial Instruments: Disclosures, IAS 32 Financial

Instruments: Presentation and IAS 39 Financial Instruments: Recognition and Measurement, that eliminate theexemption for contingent consideration, do not apply to contingent consideration that arose from businesscombinations whose acquisition dates precede the application of IFRS 3 (as revised in 2008).

• The amendment is applicable to annual periods beginning on or after 1 July 2010. The amendment is appliedretrospectively.

IFRS 3 BusinessCombinations

Measurement of non-controlling interests (NCI)• The amendment limits the scope of the measurement choices that only the components of NCI that are present

ownership interests that entitle their holders to a proportionate share of the entity’s net assets, in the event ofliquidation, shall be measured either:

• At fair valueor

• At the present ownership instruments’ proportionate share of the acquiree’s identiable net assets. Othercomponents of NCI are measured at their acquisition date fair value, unless another measurement basis isrequired by another IFRS, e.g., IFRS 2

• Applicable to annual periods beginning on or after 1 July 2010. The amendment is applied prospectively from thedate the entity applies IFRS 3 (revised)




IFRS 3 Business

Combinations

Un-replaced and voluntarily replaced share-based payment awards

• The amendment requires an entity (in a business combination) to account for the replacement of the acquiree’sshare-based payment transactions (whether obliged or voluntarily), i.e., split between consideration and postcombination expenses. However, if the entity replaces the acquiree’s awards that expire as a consequence of thebusiness combination, these are recognised as post-combination expenses. The amendment also species theaccounting for share-based payment transactions that the acquirer does not exchange for its own awards: if vested— they are part of NCI and measured at their market-based measure; if unvested — they are measured at marketbased value as if granted at acquisition date, and allocated between NCI and post-combination expense.

• The amendment is applicable to annual periods beginning on or after 1 July 2010. The amendment is appliedprospectively.

IFRS 7 Financial

Instruments Disclosures

Clarication of disclosures

• The amendment emphasises the interaction between quantitative and qualitative disclosures and the nature andextent of risks associated with nancial instruments

• Amendments to quantitative and credit risk disclosures are, as follows:

• Clarify that only nancial assets whose carrying amount does not reect the maximum exposure to credit riskneed to provide further disclosure of the amount that represents the maximum exposure to such risk

• Require, for all nancial assets, disclosure of the nancial effect of collateral held as security and other creditenhancements regarding the amount that best represents the maximum exposure to credit risk (e.g., adescription of the extent to which collateral mitigates credit risk)

• Remove the disclosure requirement of the collateral held as security, other credit enhancements and anestimate of their fair value for nancial assets that are past due but not impaired, and nancial assets that are

individually determined to be impaired• Remove the requirement to specically disclose nancial assets renegotiated to avoid becoming past due or

impaired

• Clarify that the additional disclosure required for nancial assets obtained by taking possession of collateralor other credit enhancements are only applicable to assets still held at the reporting date

• The amendment is applied retrospectively.

IAS 1 Presentation of

Financial Statements

Clarication of statement of changes in equity

• The amendment claries that an entity will present an analysis of other comprehensive income for each componentof equity, either in the statement of changes in equity or in the notes to the nancial statements.

• The amendment is applied retrospectively.

IAS 27 Consolidated and

Separate Financial

Statements

Transition requirements for amendments made as a result of IAS 27 Consolidated and Separate Financial

Statements

• The amendment claries that the consequential amendments from IAS 27 made to IAS 21 The Effect of Changes in

Foreign Exchange Rates, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures applyprospectively for annual periods beginning on or after 1 July 2009 or earlier when IAS 27 is applied earlier.

• The amendment is applicable to annual periods beginning on or after 1 July 2010. The amendment is appliedretrospectively.





More information about the annual improvements can be

found in Ernst & Young’s Supplement to IFRS outlook Issue 71

(May 2010).

IAS 34 Interim Financial

Reporting

Signicant events and transactions

• The amendment provides guidance to illustrate how to apply disclosure principles in IAS 34 and add disclosurerequirements around:

• The circumstances likely to affect fair values of nancial instruments and their classication

• Transfers of nancial instruments between different levels of the fair value hierarchy

• Changes in classication of nancial assets

• Changes in contingent liabilities and assets• The amendment is applied retrospectively

IFRIC 13 Customer

Loyalty Programmes

Fair value of award credit

• The amendment claries that when the fair value of award credits is measured based on the value of the awards forwhich they could be redeemed, the amount of discounts or incentives otherwise granted to customers notparticipating in the award credit scheme, is to be taken into account

• The amendment is applied retrospectively




IFRS 9 Financial Instruments


Key requirements

The rst phase of IFRS 9 Financial Instruments addresses the

classication and measurement of nancial assets. The Board’s

work on the other phases is ongoing and includes classication

and measurement of nancial liabilities, impairment of nancial

instruments, hedge accounting and derecognition of nancial

instruments, with a view to replacing IAS 39 Financial

Instruments: Recognition and Measurement in its entirety by

early 2011.

Phase 1 of IFRS 9 applies to all nancial assets within the scope

of IAS 39. The key requirements of IFRS 9 are as follows.

At initial recognition, all nancial assets are measured at fair

value.

Debt instruments

Debt instruments may (if the Fair Value Option is not invoked) besubsequently measured at amortised cost if:

• The asset is held within a business model whose objective is

to hold the assets to collect the contractual cash ows

And

• The contractual terms of the nancial asset give rise, on

specied dates, to cash ows that are solely payments of

principal and interest on the principal outstanding.

All other debt instruments are subsequently measured at fair

value.

Equity investments

All equity investment nancial assets are measured at fair valueeither through other comprehensive income (OCI) or prot or

loss. Entities must make an irrevocable choice for each

instrument, unless they are held for trading, in which case they

must be measured at fair value through prot or loss.

Transition

Phase 1 of IFRS 9 can be early adopted for reporting periods

ending on or after 31 December 2009. For entities adopting the

standard in 2009 and 2010, the initial application date may be

any date within the reporting period from 12 November 2009.

The standard is applied retrospectively. However, early adopters

get some transitional relief from restating comparative gures.

Impact

Phase 1 of IFRS 9 will have a signicant impact on the

classication and measurement of nancial assets. For those

entities considering early adoption there are a number of

benets and challenges that should be considered.


Further information about the new standard can be found inErnst & Young’s publication Supplement to IFRS outlook Issue 60

(November 2009).



All amendments in the 2010 omibus edition are listed in the

previous section of this publication. However, ammendments to

IFRS 3 and IAS 27 need only be applied to December 2011 year

ends (as noted in the table).


and interpretations issued that are effective subsequent

to December 2011 year-ends




Since the publication of the 2009 IFRS Update for December

year-ends, the IFRS Interpretations Committee has deliberated

on a number of items. Certain items were published in the IASB’s

IFRIC Update as not having been added to the Interpretations

Committee agenda, together with the reason for not doing so.

When issuing their reasons, the Interpretations Committee

added some further reasons about how the standards should be

applied. This guidance does not constitute an interpretation, but

rather, provides additional information on the issues raised and

possibly how the standards and current interpretations are to be

applied.

The table below summarises only those items where it is felt that

additional information is helpful to preparers of nancial

statements. The full list of items considered and the reasons for

not being taken onto the agenda can be found in the IFRIC

Update on the IASB’s website.

Section 4: Items not taken onto the Interpretations

Committee agenda where the Interpretations Committee

has provided guidance on the interpretation of IFRS




Final date

considered

Issue Summary of reasons for not adding to the Interpretations

Committee agenda

November 2009 IFRS 3 Business Combinations — Measurementof NCI

IFRS 3 states that an acquirer measures any non-controlling interest in anacquiree, either at fair value or at the NCI’s proportionate share of theacquiree’s identiable net assets. NCI may include options or warrants,classied as equity. The Interpretations Committee noted that themeasurement choice should apply only to instruments currently entitled to

proportionate share of the acquiree’s net assets.

November 2009 IFRS 3 Business Combinations — Unreplacedand voluntarily replaced share-basedpayment awards

IFRS does not contain requirements for acquiree share-based paymentawards that are not replaced or are voluntarily replaced. TheInterpretations Committee noted that in this case, at least some portion ofthe amount recognised for those awards should be regarded as part of theconsideration transferred in the business combination. The InterpretationsCommittee recommended that the IASB amend IFRS 3 to address this.

January 2010 IFRS 4 Insurance Contracts and IAS 32

Financial Instruments: Presentation — Scopeissue for Real Estate Investment Trusts (REIT)

A REIT is an entity with a special tax designation, which is usually requiredto distribute 90% of its total distributable income (TDI) to investors with theremaining 10% distributed at the discretion of management. TheInterpretations Committee were asked whether the discretion to distributethe 10% met the denition of a Discretionary Participation Feature (DPF).

The IFRIC noted that the denition of DPF requires the instrument toprovide the holder with guaranteed benets and that the DPF benets are

in addition to this. Further, there must be guaranteed benets to theholder and such benets are typically those present in insurance activities.

January 2010 IAS 18 Revenue — Receipt of a dividend ofequity instruments

Current IFRS provides guidance on when revenue arising from dividends isrecognised. The Interpretations Committee noted that when all ordinaryshareholders receive a dividend of an investee’s own equity instruments ona pro-rata basis, there is no change in nancial position of any of theinvestors.

Therefore, the divided is not recognised as revenue as it is not probablethat there is an economic benet that will ow to the investor.




Final date

considered


Committee agenda

January 2010 IAS 27 Consolidated and Separate Financial

Statements — Combined nancial statementsand redening the reporting entity

The Interpretations Committee received a request for guidance on whethera reporting entity can present nancial statements, in accordance withIFRS, that include a selection of entities under common control, not justparent/ subsidiary relationships. The Interpretations Committee noted thatthe ability to include entities within a set of IFRS nancial statements

depends on the interpretation of ‘reporting entity’ in the context ofcommon control.

January 2010 IAS 38 Intangible Assets — Amortisationmethod

The Interpretations Committee received a request for guidance on themeaning of “consumption of economic benets” in determining theamortisation method for a nite intangible asset. The methods consideredwere the straight line method and the unit of production method (includinga revenue-based unit of production method). The InterpretationsCommittee noted that the determination of the amortisation method is amatter of judgment.

March 2010 IAS 21 The Effects of Changes in Foreign

Exchange Rates — Determination of functionalcurrency of an investment holding company

The Interpretations Committee received a request for guidance on whetherthe underlying economic environment of subsidiaries should be consideredin determining, in its separate nancial statements, the functionalcurrency of an investment holding company. The InterpretationsCommittee noted that the determination is a matter of judgment, guidance

is already provided in IAS 21, and IAS 1 Presentation of FinancialStatements requires the disclosure of signicant judgments.

May 2010 IFRS 1 First-time Adoption of International

Financial Reporting Standards — Accountingfor costs included in self-constructed assetson transition

The Interpretations Committee received two requests concerning an entitythat, on transition to IFRSs, changes its accounting policy for actuarialgains and losses and determines that they should no longer be capitalised(under previous GAAP the entity capitalises certain costs, includingactuarial gains and losses, as part of self-constructed assets, inaccordance).

The Interpretations Committee noted that IFRS 1 requires an entity to use‘the same accounting policies in its opening IFRS statement of nancialposition and throughout all periods presented in its rst IFRS nancialstatements’.

May 2010 IAS 26 Accounting and Reporting by

Retirement Beneft Plans — Valuation of plan

assets

The Interpretations Committee received a request for guidance on theinteraction between IAS 26 and IAS 39 relating to the accounting for

retirement benet plan investments (plan assets), in the nancial statementsof retirement benet plans prepared in accordance with IAS 26. TheInterpretations Committee concluded that IFRSs are clear because:

• The guidance in IAS 26 is clear that plan assets shall be carried at fairvalue.

• IAS 26 is clear that changes in the fair value of plan assets should bepresented and disclosed in the statement of changes in net assetsavailable for benets.




Final date

considered


Committee agenda

July 2010 IAS 1 Financial Statement Presentation —Going concern disclosure

The Interpretations Committee received a request for guidance on thedisclosure requirements in IAS 1 on uncertainties related to an entity’sability to continue as a going concern. How an entity applies the disclosurerequirements in IAS 1 about such uncertainties requires the exercise ofprofessional judgment. The Interpretations Committee noted that:

• IAS 1 requires that an entity shall disclose ‘material uncertaintiesrelated to events or conditions that may cast signicant doubt upon theentity’s ability to continue as a going concern’.

• For this disclosure to be useful it must identify that the discloseduncertainties may cast signicant doubt upon the entity’s ability tocontinue as a going concern.

July 2010 IAS 39 Financial Instruments: Recognition

and Measurement — Impairment of nancialassets reclassied from available-for-sale toloans and receivables

The Interpretations Committee received a request for guidance on how anentity should account for the impairment of nancial assets with a xedmaturity after they have been reclassied from the available-for-salecategory to loans and receivables. The Interpretations Committee notedthat:

• IAS 39 requires that the fair value of a nancial asset on the date ofreclassication becomes its new cost or amortised cost.

• A new effective rate of interest is then calculated and applied to the

nancial asset. This is the rate that discounts the estimated future cashows to the new carrying amount of the nancial asset.

• When an impairment loss is recognised, applying the requirements of IAS39 would result in all gains or losses that have been recognised in othercomprehensive income being reclassied from equity to prot or loss.

September 2010 IAS 21 The Effects of Changes in Foreign

Exchange Rates — Repayments of investmentsand foreign currency translation reserve

The Interpretations Committee received a request for guidance on thereclassication of the foreign currency translation reserve (FCTR) when arepayment of a foreign investment occurs. Specically on whether FCTRshould be recycled for transactions in which there is a reduction in:

• The investor’s percentage equity ownership in the investee (a relativereduction)

Or

• The absolute investment in the investee, even if there is no reduction inthe proportionate equity ownership interest. A reduction in ownership

may be relative, absolute or both

The Interpretations Committee noted that IAS 21 requires that an entitymust treat ‘any reduction in an entity’s ownership interest in a foreignoperation’ as a partial disposal, apart from those certain reductions thatare accounted for as disposals. How an entity applies the requirements islargely dependent on whether it interprets ‘any reduction in an entity’sownership interest in a foreign operation’ to mean an absolute reduction, aproportionate reduction, or both. The Interpretations Committee considersthat different interpretations could lead to diversity in practice in theapplication of IAS 21 on the reclassication of the FCTR when repaymentof investment in a foreign operation occurs.

However, the Interpretations Committee decided neither to add this issueto its agenda nor to recommend the Board to address this issue through Annual Improvements because it did not think that it would be able toreach a consensus on the issue on a timely basis. The Committeerecommends that the IASB should consider this issue within a broadreview of IAS 21 as a potential item for its post-2011 agenda.




Section 5: Exposure drafts of new and amended

standards and interpretations that are still to

be issued as standards and interpretations

The IASB is currently working on a number of other exposure

drafts of new and amended standards and interpretations, some

of which are expected to be issued before 31 December 2010.

The effective date of these new standards and amendments is

only expected to be in 2012 or 2013. However, they are likely to

permit early application and in some cases this may be benecial

to entities.

The table below indicates the scope of these exposure drafts and

the date that a standard or interpretation is expected to the

issued, together with a reference to relevant Ernst & Young

publications. The timing of the nal standard or interpretation is

based on the IASB’s project timetable on its website.

Exposure draft Expected IFRS/Interpretation1 Ernst & Young publications

Derecognition (ED/2009/3)

Proposes to improve and simplify the requirements as to whennancial assets and liabilities are derecognised. The ED’s proposeddisclosure requirements are to be issued as an IFRS to improvederecognition disclosures

IFRS 4th quarter of 2010

(Per the IASB the IFRS is to be issuedin the 3rd quarter of 2010. However,as of 1 October 2010, the IFRS hasnot been issued)

Supplement to IFRS outlook Issue 37(April 2009)

ED 10 Consolidated Financial Statements

Proposes a new denition of control of an entity, which will widenthe scope of the standard. It also proposes signicant newdisclosure requirements

IFRS 4th quarter of 2010 Supplement to IFRS outlook Issue 26(December 2008)

ED 9 Joint Arrangements

Proposes to require an entity to recognise its contractual rightsand obligations arising from its joint arrangements. The proposalsalso require a joint venture (previously called a jointly controlledentity) to be accounted for using the equity method

IFRS 4th quarter of 2010 IFRS Alert Issue 19 (September

2007)

Presentation of Items of Other Comprehensive Income

(amendments to IAS 1 Presentation of Financial Statements) (ED/2010/5)

Proposes two key changes to IAS 1:

• Present a single statement of comprehensive income containingtwo distinct sections for prot or loss and other comprehensiveincome (OCI)

• Group items presented in OCI based on whether those items aresubsequently reclassied to prot or loss

IFRS 4th quarter of 2010 Supplement to IFRS outlook Issue 74(May 2010)

Removal of Fixed Dates for First-time Adopters (ED/2010/10)Proposes to remove the xed dates relating to the derecognitionand day one gain or loss provisions in IFRS 1 First-time Adoption of

International Financial Reporting Standards and replace them witha relative date, the date of transition to IFRS

IFRS 4th quarter of 2010(Estimated, the IASB would like toissue the amendment on a timelybasis for those jurisdictions that arecurrently affected by the issue)

Supplement to IFRS outlook Issue 82(August 2010)

Severe Hyperination (ED/2010/12)

Proposes to clarify how an entity should resume presentingnancial statements in accordance with IFRS after a period whenthe entity was unable to comply with IFRS because it had afunctional currency that was subject to severe hyperination

IFRS 4th quarter of 2010

(Estimated, the IASB would like toissue the amendment on a timelybasis for those jurisdictions that arecurrently affected by the issue)

1

Per the IASB’s project timetable dated 2 July 2010 unless otherwise noted(www.ifrs.org/Current+Projects/IASB+Projects/IASB+Work+Plan.htm).This is updated on a regular basis by the IASB.





Stripping Costs in the Production Phase of a Mine (DI/2010/1)

Proposes that costs associated with a ‘stripping campaign’ shouldbe accounted for as an additional component of an existing asset,and that this component should be written down over the reservesthat directly benet from the campaign

Interpretation 4th quarter of 2010

(Estimated based on the commentdeadline of the draft interpretation)

Supplement to IFRS outlook Issue 81(August 2010)

Conceptual Framework for Financial Reporting — The ReportingEntity (ED/2010/2)

Proposes a denition of a reporting entity for the purposes ofnancial reporting

IFRS 4th quarter of 2010 Supplement to IFRS outlook Issue 68(March 2010)

Management Commentary (ED/2009/6)

Proposes a basis for the development of good managementcommentary. It offers a non-binding framework and limitedapplication guidance, which could be adapted to the legal andeconomic circumstances of individual jurisdictions

IFRS 4th quarter of 2010 Supplement to IFRS outlook Issue 48(July 2009)

Defned Beneft Plans (ED/2010/3)

Proposes changes in accounting for long-term employee benetssuch as pensions. The most signicant proposal is the removal ofthe ‘corridor mechanism’

IFRS 1st quarter of 2011 Supplement to IFRS outlook Issue 70(May 2010)

Fair value measurement (ED/2009/5)

Proposes to clarify the denition of fair value and enhance fairvalue disclosures

IFRS 1st quarter of 2011 Supplement to IFRS outlook Issue 43(June 2009)

Measurement Uncertainty Analysis Disclosure for Fair Value

Measurements (ED/2010/7)

Proposes disclosures related to measurement uncertainty onLevel 3 fair value measurements

IFRS 1st quarter of 2011 Supplement to IFRS outlook Issue 77(June 2010)

Fair Value Option for Financial Liabilities (ED/2010/4)

Proposes to retain the existing classication and measurementrequirements for nancial liabilities, with two exceptions:

• The effects of changes in the own credit risk will not affectprot or loss for nancial liabilities designated at fair value

through prot or loss using the fair value option

• Liabilities arising from derivatives on investments in unquotedequity instruments will no longer be measured at cost

IFRS 2nd quarter of 2011 Supplement to IFRS outlook Issue 72(May 2010)

Revenue from Contracts with Customers (ED/2010/6)

Proposes a revenue recognition model to determine the amount,timing and uncertainty of revenue recognition arising fromcontracts to provide goods and services to customers

IFRS 2nd quarter of 2011 Supplement to IFRS outlook Issue 75(June 2010)

Insurance contracts (ED/2010/8)

Proposes that an insurer should measure insurance liabilities usinga model based on the ’present value of the fullment cash ows’plus a residual margin when required

IFRS 2nd quarter of 2011 July 2010 Insurance AccountingAlert — Special edition





Leases (ED/2010/9)

Proposes a single model that would be applied to most leases thatwould effectively end off-balance sheet reporting for leases. Theproposed model would also require entities to make a number ofestimates and periodically reassess those estimates in accountingfor leases

IFRS 2nd quarter of 2011 Supplement to IFRS outlook Issue 79(August 2010)

Financial Instruments: Amortised Cost and Impairment (ED/2009/12)

Proposes improvements to amortised cost measurement, inparticular the transparency of provisions for losses on loans andfor the credit quality of nancial assets

IFRS 2nd quarter of 2011 Supplement to IFRS outlook Issue 61(November 2009)

Deferred Tax: Recovery of Underlying Assets (ED/2010/11)

Proposes to require that deferred tax assets or liabilities for certainspecied assets be measured based on the presumption that thecarrying amount of the underlying asset will be recovered entirelythrough sale

IFRS 1st half of 2011

(Estimated based on the commentdeadline of the ED)

Supplement to IFRS outlook Issue 83(September 2010)

Rate-regulated Activities (ED/2009/8)

Proposes to require certain regulated entities to recognise assets

or liabilities arising from the effects of price regulation and/ or torequire specic disclosures

IFRS 1st half of 2011 Supplement to IFRS outlook Issue 53(July 2009)

IAS 37 Provisions, Contingent Liabilities and Contingent Assets and

IAS 19 Employee Benefts (Amendments)

The 2005 ED proposes that entities should recognise allobligations that satisfy the denition of a liability in the IASB’sFramework, unless they cannot be measured reliably. The notionof probability is also removed from the determination of whethera liability should be recognised.

In September 2010 the IASB notedthat a new exposure draft will beissued in 2011

Summary of the IASB’s Proposals to

Amend IAS 37 and IAS 19

Measurement of Liabilities in IAS 37 (ED/2010/1)

Proposes to clarify how a non-nancial liability is measured —which will depend largely on whether or not the obligation canbe transferred or cancelled

In September 2010 the IASB notedthat a new exposure draft will beissued in 2011

Supplement to IFRS outlook Issues 65(January 2010) and 67 (February2010)



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