Initial application of standards, interpretations, and amendments in the financial year

IFRSs endorsed by the EU

Insurance Contracts

Jan. 1, 2023

IFRS 17 governs the accounting for insurance contracts and replaces IFRS 4.

Insurance Contracts

Jan. 1, 2023

The initial application of IFRS 17 was postponed until January 1, 2023. The fundamental principles under IFRS 17 remain unaffected. The amendments to IFRS 17 are aimed at helping entities implement the standard and, at the same time, avoiding a significant loss of useful information. The option for companies to delay application of IFRS 9 until the initial application of IFRS 17 has also been extended until January 1, 2023.

Initial Application of IFRS 17 and IFRS 9 – Comparative information

Jan. 1, 2023

The supplementary transition option relating to comparatives in the first reporting year allows for the option of a different classification pursuant to IFRS 9 (classification overlay) for the comparative periods in the year of first-time application of both standards. In addition, for financial assets that relate to insurance contracts, existing classification options under IFRS 9 can be exercised again if IFRS 9 was applied prior to the first-time application of IFRS 17.

Presentation of Financial Statements

Jan. 1, 2023

The amendments to IAS 1 require entities to disclose their material accounting policies rather than their significant accounting policies. The amendments to IFRS Practice Statement 2 “Making Materiality Judgements” contain guidance on applying materiality judgments to accounting policy disclosures.

Definition of Accounting Estimates

Jan. 1, 2023

The amendments relate to the definition of accounting estimates. It is clarified how entities can distinguish between changes to accounting policies and to accounting estimates.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction

Jan. 1, 2023

IAS 12 provides for exemptions to the recognition of deferred taxes in specific cases. It was previously unclear as to whether the initial recognition exemptions also apply for transactions in which the initial recognition of an asset and a liability gives rise to equal taxable and deductible temporary differences. The exemptions apply specifically to leases and restoration obligations. The IASB now clarifies that the exemption relating to the recognition of deferred taxes is not applicable in the aforementioned cases.

Income taxes: International Tax Reform – Pillar Two Model Rules

Jan. 1, 2023

The amendments introduce a temporary exception to the accounting for deferred taxes arising from the jurisdictions implementing the global tax rules. The amendments require an entity to disclose that it has applied the temporary exception. The amendments also introduce targeted disclosure requirements for affected entities to help users of the financial statements better understand an entity’s exposure to income taxes arising from legal regulations to ensure minimum taxation levels globally (under the OECD Pillar Two Model Rules), particularly before legislation implementing these rules takes effect.