The FASB has provided optional relief for a limited time to ease the accounting burden associated with transitioning away from reference rates in the area of contract modifications, hedge accounting and held-to-maturity debt securities. A company can choose to apply IFRS 17 before that date, but only if it also applies IFRS 9 Financial Instrumentsand IFRS 15 Revenue from Contracts with Customers. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance. Like IFRS Standards, US GAAP applies a ’10 percent’ test for derecognition of financial liabilities, considering fees paid or received between the borrower and the lender. The new insurance standard IFRS 17 Insurance Contracts was issued in 2017 with the effective date of 1 January 2021, but IASB already makes steps to postpone its application till 2022. Amendments to IFRS 16, Leases, COVID-19-Related Rent Concessions4, permit lessees not to assess whether eligible COVID-19 related rent concessions are lease modifications, and account for them as if they were not lease modifications. Under both IFRS Standards and US GAAP, a lessor payment for lessee-owned leasehold improvements is a lease incentive that should reduce the lease payments. The proposed amendment would improve the sale and leaseback requirements already in IFRS 16 by providing greater clarity for the company selling and leasing back an asset both at the date of transaction and subsequently. For effective dates under IFRS Standards, see our Newly effective standards web tool. IASB® Board acknowledges the COVID-19 related challenges that stakeholders face in effectively implementing new and amended standards. samples) before the related PPE is available for its intended use can no longer be deducted from the cost of PPE. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. KPMG does not provide legal advice. Find out what KPMG can do for your business. Our multi-disciplinary approach and deep, practical industry knowledge, skills and capabilities help our clients meet challenges and respond to opportunities. Below are effective dates for major financial accounting and reporting standards on revenue recognition, leases, credit losses, and not-for-profit financial reporting. Instead such proceeds should be recognized in profit or loss, together with the costs of producing those items (to which IAS 27 applies). US GAAP requires companies to perform an initial screen test as part of their assessment. Many offer CPE credit. Amendments to the Conceptual framework Annual periods 1 Jan 2020 Early adoption is permitted Endorsed 7 1 January 2021 IFRS 17, ‘Insurance contracts’ Annual periods on or after 1 Jan 2021 Early adoption is permitted once IFRS 15 and IFRS 9 are applied. The IASB’s joint project with the Financial Accounting Standards Board (FASB) to develop a new accounting ... IFRS in Practice 2020-2021 - IFRS 15 Revenue from Contracts with Customers 6. Proceeds from selling items before the related PPE is available for intended use are recognized in profit or loss unless the property is being developed for rental or sale, in which case income (but not a loss) from incidental operations is recognized as a reduction to the cost of the property. IFRS ® Standards Required 1 January 2020.. For accounting periods beginning on 1 January 2020, excluding changes not yet required. Derecognition and modifications of financial liabilities, however, remains a complex area where other differences between IFRS Standards and US GAAP arise. The 'International Financial Reporting Standards (IFRS) and 2020 Updates' course will help build the knowledge you need in IFRS for success in today's global business world. These requirements differ from and are narrower than IFRS Standards.Â. New proposals2 have been issued to provide additional relief post-IBOR reform (IBOR reform – Phase 2), including relief related to debt and lease modifications, hedge accounting documentation, and disclosure requirements. Head office: Columbus Building, 7 Westferry Circus, Canary Wharf, London E14 4HD, UK. Effective dates of new International Financial Reporting Standards (IFRSs) To ensure that this update in referencing does not change which assets and liabilities qualify for recognition in a business combination, or create new Day 2 gains or losses, the amendments introduce new exceptions to the recognition and measurement principles in IFRS 3. Effective for annual periods beginning on or after January 1, 2021: IFRS 17 Insurance Contracts (New in 2017; replaces IFRS 4) In accordance with specific requirements in IFRS 17. The IASB Board still intends to advance time-sensitive projects – including IBOR Phase 2 and amendments to IFRS 17 under the original project plans. No results have been found ... International GAAP® 2021. This was to ease the transition to the new interest rates for companies and to ensure that investors have the information they need about the progress a company has made in transitioning to the new … Effective date. costs of producing and selling items before the PPE is available for its intended use; and. IFRS Foundation appoints Robert Pozen, Kenneth Robinson and Erhard Schipporeit as new Trustees The IFRS Foundation has appointed three Trustees and re-appointed seven, effective 1 January 2021. The IFRS Foundation has published educational material to highlight how existing requirements in IFRS Standards require companies to consider climate-related matters when their effect is material to the financial statements. Partner, Dept. Description: For accounting periods beginning on 1 January 2021, excluding changes not yet required. The FASB issued a revised exposure draft, Unlike IFRS Standards, US GAAP does not have a general requirement to recognize onerous contracts. rent deferrals). The content is organized by effective dates: And in On the radar, we explain how the IASB Board and FASB are responding to COVID-19. of Professional Practice, KPMG US, Managing Director, Dept. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. As the COVID-19 situation continues, the IASB Board could make additional changes to its work plan, and we encourage you to check our Global IFRS Institute frequently for updates. Effective dates are for annual periods beginning on or after the stated date. For a levy in the scope of IFRIC 21, the acquirer should apply the criteria in IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. Standards/Interpretations Issued Not Yet Effective as at September 2020 IAS 8 requires that, when an entity has not applied a new Standard or Interpretation that has been issued but is not yet effective, the entity shall disclose: (a) this fact; and (b) known or reasonably estimable information relevant to assessing the possible With the implementation of IFRS 17, the accounting for insurance contracts will differ significantly between IFRS Standards and US GAAP both for insurers, reinsurers and non-insurers. Like you, we believe those who understand and apply IFRS will enjoy expanded career opportunities as its use is spreading around the world. KPMG highlights potential IFRS® Standards accounting and disclosures impacts of COVID-19. Pozen is a financial executive and former executive chair of MFS Investment Management, Robinson currently serves as a trustee of the Financial Accounting Foundation, and Schipporeit is an independent management consultant and is a … In 2016, the IASB issued IFRS 16, the new leases standard, which will be effective in 2019. Find out more detail in the full IASB Update for November. The current and noncurrent classification of liabilities is not currently converged between IFRS Standards and US GAAP. This edition, presented in three volume parts, contains the IFRS ® Standards, including IAS ® Standards, IFRIC® Interpretations and SIC® Interpretations, as required at 1 January 2020. Amendments to IAS 1, Presentation of Financial Statements, clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. Certain accommodations have been made, such as deferring effective dates, extending project timelines and comment periods and providing relief on accounting for rent concessions by lessees. The amended definitions of a business under IFRS Standards and US GAAP are otherwise substantially converged and the Boards expect them to yield more consistency in practice than previously. applies to lessors as well as lessees; it is more permissive with respect to eligibility. Improving business performance, turning risk and compliance into opportunities, developing strategies and enhancing value are at the core of what we do for leading organizations. The endorsement process of the European Union often leads to significant delays after the publication by the IASB. Ensure that you communicate their impact to your stakeholders! The deferral of the effective date of the new accounting standard IFRS 17 to 1 January 2023 has given insurers some breathing room to prepare for the transition, but for all there is still an enormous amount of work to do and the year ahead will be a very big year for the entire industry. In addition, other projects that were slated for completion in Q2 2020 will not be completed until later in 2020. Instead, the company can elect to account for eligible COVID-19 related rent concessions, whatever their form (e.g. Unlike IFRS Standards, US GAAP requires, in certain situations, a likelihood assessment at the reporting date as to whether the creditor will accelerate repayment of the debt (e.g. The effective date of IFRS 17 is pending a two-year deferral to 2023, to be confirmed by the IASB Board mid-2020. Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. Instead, onerous contracts are accounted for under specific Codification topics/subtopics depending on the type of contract involved. Chair of the IFRS Foundation Trustees Erkki Liikanen delivered the keynote speech at the UNCTAD Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting, introducing the Trustees' Consultation Paper on Sustainability Reporting. The Trustees also confirmed the appointment and re-appointment of several organisations and individuals to the IFRS Advisory Council, effective 1 January 2021. This product is a printed bound volume. Accessibility   |   Privacy   |   Terms and Conditions   |   Trade mark guidelines   |   All legal information   |   Using our website. We encourage you to closely monitor the FASB’s technical agenda for potential further delays in future standard-setting activities. Unlike IFRS Standards, materiality is not specifically defined under authoritative US GAAP. The comment periods for the following projects have been extended by three months: Exposure Draft, General Presentation and Disclosures, extended to September 30, 2020, Discussion Paper, Business Combinations – Disclosures, Goodwill and Impairment, extended to December 31, 2020. The IFRS Foundation Trustees are responsible for the governance, oversight and strategy of the Foundation and the International Accounting Standards Board, which sets IFRS Standards. Describes the changes to Standards messages effective as of 21 November 2021. costs of making the PPE available for its intended use. IFRS in your pocket is our popular guide to International Financial Reporting Standards (IFRS). – New standards and interpretations issued by the IASB Board have a single effective date. The Board has started its Post-implementation Review (PiR) of the classification and measurement requirements in IFRS 9 Financial Instruments and has added the PIR as a project to its work plan. IFRS compared to US GAAP 3 About this publication This edition, presented in three volume parts, contains the IFRS® Standards, including IAS® Standards, IFRIC® Interpretations and SIC® Interpretations, as approved for issue up to 31 December 2020 and required to be applied on 1 January 2021. An error has occurred, please try again later. The practical expedient is not available to lessors. Summary of the new IFRS standards. See the IASB Board work plan for other projects that are currently in progress. The International Financial Reporting Standards Foundation is a not-for-profit corporation incorporated in the State of Delaware, United States of America, with the Delaware Division of Companies (file no: 3353113), and is registered as an overseas company in England and Wales (reg no: FC023235). Please complete the CAPTCHA field to verify you are human. Dynamics in IFRS: You find the most important information concerning new IFRS Standards and the latest interpretations here. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. 3. By using this site you agree to our use of cookies. Publication: Use of IFRS Standards around the world [PDF], How the IFRS Interpretations Committee helps support consistent application, Supporting materials for the IFRS for SMEs Standard, business combinations under common control, educational material to highlight how existing requirements in IFRS Standards, Consultation Paper on Sustainability Reporting. 1 January 2021 IFRS 17, ‘Insurance contracts’ Annual periods on or after 1 January 2021 Early adoption is permitted once IFRS 15 and IFRS 9 are applied. © IFRS Foundation 2017. the revised consideration for the lease remains ‘substantially the same’ or is less than the consideration for the lease before the concession; any reduced payments were originally due on or before June 30, 2021; and. Accounting Standards Update No. In addition to useful summaries of all current Standards and Interpretations, it includes a vast array of information about global accounting standard setting. Early adoption is permitted unless otherwise stated. That is, it does not require either (1) that the concession either be a. In response to COVID-19, the IASB Board has made significant changes to its work plan, proposing to extend effective date comment deadlines and project timelines, and taking on new priority projects. Are you ready for the new IFRS® accounting standards? Both standards were issued in 2014 and are effective for annual periods beginning Jan. 1, 2018. The Board has also proposed to amend IFRS 16 Leases by specifying how a company measures the lease liability in a sale and leaseback transaction. In response to COVID-19, the effective date is pending a one-year deferral to 2023, to be confirmed by the IASB Board mid-2020. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. This may, for example, apply to an amortizable license acquired through a business combination in a jurisdiction in which no tax deduction may be available for the purposes of the corporate tax while the asset is used, but the full amount may be deductible for the purposes of the capital gains tax when the asset reaches the end of its life, and corporate and capital gains and losses cannot be offset. In March 2018, the IASB Board revised its Conceptual Framework. The Board has launched a public consultation on possible new accounting requirements for mergers and acquisitions involving companies within the same group—business combinations under common control. December 4, 2020 and the IASB Board has relaxed IFRS 16 effective... 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