Vital Changes Which You Need To Know About 2019 IFRS Update
Her Majesty’s Revenue and Customs (HMRC)
With the start of the new year, a number of changes and amendments of IFRS has been made. In this article, we cover all major changes and amendments which have been made in 2019-
The new standard IFRS 9 Financial Instrument applies in toto
In case you have deferred implementation of IFRS 9 till now, then it’s time you do it now. The standard IAS 139 is no longer applicable. Your financial statements for the year which ended on 31 December 2018 need to be made under IFRS 9. IFRS 9 is highly complicated and even if you don’t have a finance background, you need to become familiar with the new method for bad debt provisioning related to trade receivables.
The new standard IFRS 15 Revenue from Contracts with Clients is fully applicable
Implementation of IFRS 9 wouldn’t be enough. You will have to implement IFRS 15 completely as well.
Amendment of IFRS 2 Share-Based Payment
The standard IFRS 2 was revised by clarifications related to classification and measurement of specific share-based payment transactions.
- At present, IFRS 2 contains accounting needs related to vesting treatment and non-vesting conditions in cash-related share-based payment transactions.
- Guidance on share-based payment dealings with net settlement feature for retaining tax obligations has been included.
- IFRS 2 has introduced new requirements for accounting for modifying share-based payment transactions from cash-settled to equity-settled.
All such amendments will be applied in the future.
Amendment of IFRS 4 Insurance Contracts
Two new standards, IFRS 9 Financial Instruments and new IFRS 17 Insurance Contacts come with different effective dates which can cause hassles in reporting by insurance companies. So, this amendment will remove such problems by allowing two options for people who issue insurance contracts.
- Overlay approach
- Deferral approach (here, the article will be enabled to apply IAS 39 rather than IFRS 9 till IFRS 17 comes into effect).
Amendments to IAS 28 Investments in Associates & Joint Ventures
A new clarification was included in IAS 28. When a firm is a venture capital or an organization of similar category, it can elect for measuring investment in joint venture at fair value or loss in sync with IFRS 9. The amendment has made it clear that the option is available on investment-by-investment basis on initial recognition.
Amendments to IAS 40 Investment Property
The amendment is applicable for the time period starting on or after July 1 2018(you don’t need to apply for annual statements for the year which ended on 31 December 2018). The amendment made it clear about transfers of a property to or from investment property. This type of a transfer can be done only when there is proof of change in use. But the change in intentions of the management for property usage is not a proof about change in use.
To know more about HMRC iXBRL services contact DataTracks.