KPMG highlights potential IFRS® Standards accounting and disclosures impacts of COVID-19. 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. Instead such proceeds should be recognized in profit or loss, together with the costs of producing those items (to which IAS 27 applies). He will succeed Hans Hoogervorst, who completes his second five-year term in June 2021. of Professional Practice, KPMG US. The test is optional under IFRS Standards. These requirements differ from and are narrower than IFRS Standards.Â. The consultation paper presents the Board's preliminary views with the aim to reduce diversity in practice and to improve transparency and comparability in reporting these transactions. Unlike IFRS Standards, assets and liabilities that arise from contingencies are generally recognized in the acquisition accounting if they are probable and reasonably estimable. IASB ® Board acknowledges the COVID-19 related challenges that stakeholders face in effectively implementing new and amended standards. FASB staff guidance (hereinafter, the practical expedient) permits a company to forgo an evaluation of the enforceable rights and obligations of the original lease contract. 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. under both IFRS Standards and US GAAP – with major new standards on revenue, leases, financial instruments and insurance. The endorsement process of the European Union often leads to significant delays after the publication by the IASB. Summary of the new IFRS standards. IFRS compared to US GAAP 3 About this publication 19 February 2021: Update to Standards MT Release Guide 2021 (public) Update to Message Format Validation Rules 2021 (login required) Updates to documents published on 18 December 2020. Many offer CPE credit. The standard should be applied retrospectively unless impracticable. Access the recordings and slides or find out more about the call for papers for the 2021 edition of this event. The following summaries highlight new authoritative guidance issued by the International Accounting Standards Board (IASB Board), provide a high-level comparison to US GAAP, and identify resources for further reading. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. Trustees announce appointments to … However, the FASB Concept Statements, SEC guidance used by management, as well as guidance for auditors all refer to ‘materiality’ and define it as “…if there is a substantial likelihood that the fact would have been viewed by a reasonable investor as having significantly altered the total mix of information made available...” In addition, this evaluation involves both quantitative and qualitative aspects. 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. The effective date of IFRS 17 is pending a two-year deferral to 2023, to be confirmed by the IASB Board mid-2020. Standards (IFRS) and 2021 Updates +971 4 556 7171 Contents are subject to change. ASU 2018-12 is not fully aligned with the requirements of IFRS 17. 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. Find out what KPMG can do for your business. Update 2016-04— Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) Effective dates of new International Financial Reporting Standards (IFRSs) Join us for upcoming webcast events. Early adoption is permitted. 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. Responding quickly to the challenges of COVID-19, the International Accounting Standards Board (the IASB ® Board) deferred the effective dates for certain standards and amendments, and granted relief to lessees in accounting for rent concessions. Amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (fees in the ‘10 per cent’ test for derecognition of financial liabilities) May 2020: Annual periods beginning on or after 1 January 2022: Amendments regarding replacement issues in the context of the IBOR reform; August 2020: Annual periods beginning on or after 1 January 2021 in the case of subjective acceleration clauses). The amendments to IAS 16 therefore better align the accounting for incidental income to that under US GAAP, except for PPE to be rented or sold. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. 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. In March 2018, the IASB Board revised its Conceptual Framework. Revenue Recognition. In accordance with specific requirements in IAS 37. IASB® Board acknowledges the COVID-19 related challenges that stakeholders face in effectively implementing new and amended standards. The Board will support the implementation of IFRS 17 over the next three and half years. 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. This website uses cookies. 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. They can be early adopted. The effective date for preparers is annual periods beginning on or after January 1, 2020.1 The Conceptual Framework is typically used by preparers when developing accounting policies where no IFRS Standards apply to a particular transaction. Eligible rent concessions are those arising as a ‘direct consequence’ of COVID-19 and for which: For lessees, this is an optional practical expedient to be applied consistently to all lease contracts with similar characteristics and in similar circumstances. there are no other ‘substantive’ changes to the lease. of Professional Practice, KPMG US, Managing Director, Dept. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance. The IFRS Taxonomy 2020—Proposed Update 5 General Improvements and Common Practice—IAS 19 Employee Benefits proposes changes that aim to support the high-quality tagging of information disclosed about employee benefits. 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. Skip to the content. 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. The IFRS foundation has appointed three new trustees —Robert Pozen, Kenneth Robinson and Erhard Schipporeit, effective 1 January 2021. US GAAP requires companies to perform an initial screen test as part of their assessment. The current and noncurrent classification of liabilities is not currently converged between IFRS Standards and US GAAP. 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 By using this site you agree to our use of cookies. IFRS ® Standards Required 1 January 2020.. For accounting periods beginning on 1 January 2020, excluding changes not yet required. Therefore the effective dates for new IFRS Standards of the European Union and the IASB may differ. Proceeds from selling items (e.g. Accounting Standards Update No. And last, but certainly not the least, came IFRS 17, the much-anticipated new standard on insurance, which takes effect in 2021. Also, catch up on the October episode, featuring Sue Lloyd and Technical Director Nili Shah talking about the Board's upcoming Agenda Consultation. He will succeed Hans Hoogervorst, who completes his second five-year term in June 2021. You can view which cookies are used by viewing the details in our privacy policy. IFRS 17 provides the first comprehensive guidance to accounting for insurance contracts under IFRS Standards. All rights reserved. That is, it does not require either (1) that the concession either be a. For all other entities, including ‘smaller reporting companies’, the effective date is January 1, 2024. An error has occurred, please try again later. Public organizations should apply the new revenue standard to annual reporting periods beginning after December 15, 2017. The practical expedient is not available to lessors. 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 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. Effective date. The effective date for the amendments for the current versus noncurrent classification of liabilities has been proposed to be extended by one year. Effective dates are for annual periods beginning on or after the stated date. 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. 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. Unlike IFRS, the FASB practical expedient applies to lessors as well as lessees; it is more permissive with respect to eligibility. Find out more detail in the full IASB Update for November. 3. For first time adopters of IFRS, IFRS 1 mirrors the transition guidance set out in Appendix C of IFRS 17. For effective dates under IFRS Standards, see our Newly effective standards web tool. 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. Accessibility   |   Privacy   |   Terms and Conditions   |   Trade mark guidelines   |   All legal information   |   Using our website. It aims to increase transparency and to reduce diversity in the accounting for insurance contracts. Session expired, please refresh your browser. In 2018 and the following years once more new or amended IFRS standards and interpretations became or are going to become effective. samples) before the related PPE is available for its intended use can no longer be deducted from the cost of PPE. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. Not yet endorsed 12 The IFRS Standards in this edition have been annotated with extensive cross-references, explanatory notes and IFRS Interpretations Committee (Committee) agenda decisions to help users apply the Standards. 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 US GAAP, however, only the revenue standard is fully effective in annual periods. The IASB Board still intends to advance time-sensitive projects – including IBOR Phase 2 and amendments to IFRS 17 under the original project plans. 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. IFRS 17 applies to annual periods beginning on or after 1 January 2021, with earlier application permitted if IFRS 15 and IFRS 9 are also applied. The new IFRS standards 2020 will bring about a massive change in the way businesses maintain their records.The International Financial Reporting Standards (IFRS) are accounting measures that are given by the International Accounting Standards Board (IASB). This edition does not contain Standards or changes to Standards with an effective date after 1 January 2020. Describes the changes to Standards messages effective as of 21 November 2021. 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. © IFRS Foundation 2017. 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 … 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 … Partner, Dept. New definition of a business: IFRS compared to US GAAP, Accounting standards boards respond to IBOR reform, Rent concessions – Practical relief for lessees, FASB staff guidance on accounting for COVID-19 rent concessions, Accounting for insurance contracts under IFRS 17, Amendments to classification of liabilities (IAS 1), Accounting for proceeds before an asset’s intended use, Interest Rate Benchmark Reform – Phase 2: Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16, FASB provides relief to companies for reference rate reform, Simplifying the Classification of Debt in a Classified Balance Sheet. 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. IFRS in your pocket is our popular guide to International Financial Reporting Standards (IFRS). 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. 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. IFRS 17 is effective from 1 January 2021. The standard will replace IFRS 4 Insurance Contracts. We encourage you to closely monitor the FASB’s technical agenda for potential further delays in future standard-setting activities. 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. Use this tool to generate your customised list of newly effective and forthcoming IFRS Standards © 2020 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The FASB has made significant changes to the accounting for long-duration contracts.5. In 2016 and the following years once more new or amended IFRS standards and interpretations became or are going to become effective. 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. – New standards and interpretations issued by the IASB Board have a single effective date. In 2016, the IASB issued IFRS 16, the new leases standard, which will be effective in 2019. The IFRS Foundation Trustees recently announced the appointment of Andreas Barckow to serve as Chair of the Board, effective July 2021. Archived recordings can be accessed anytime. ... Impairment of financial assets under the new standard Revenue from contracts with customers (IFRS 15) ... 2021 Effective Budgeting and Cost Control English Dubai US$ 4900 8 - 12 Aug, 2021 Fast Closing Monthly and Year-End Accounts In addition to useful summaries of all current Standards and Interpretations, it includes a vast array of information about global accounting standard setting. US GAAP does not contain an example of lessor payments for lessee-owned leasehold improvements. Tune in to KPMG Advisory podcasts to hear perspectives on today's business issues. Below are effective dates for major financial accounting and reporting standards on revenue recognition, leases, credit losses, and not-for-profit financial reporting. The Trustees also confirmed the appointment and re-appointment of several organisations and individuals to the IFRS Advisory Council, effective 1 January 2021. Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition and Measurement, and IFRS 7, Financial Instruments: Disclosures, provide temporary but mandatory relief from specific hedge accounting requirements to address potential effects of the uncertainly in the lead up to IBOR reform (IBOR reform – Phase 1). In a recent Agenda Decision, the IFRS Interpretations Committee addressed the accounting for deferred tax in a scenario in which the recovery of the carrying amount of an asset results in multiple tax consequences which cannot be offset. Early adoption is permitted unless otherwise stated. EY Homepage. The IFRS Foundation's logo and the IFRS for SMEs® logo, the IASB® logo, the ‘Hexagon Device’, eIFRS®, IAS®, IASB®, IFRIC®, IFRS®, IFRS for SMEs®, IFRS Foundation®, International Accounting Standards®, International Financial Reporting Standards®, NIIF® and SIC® are registered trade marks of the IFRS Foundation, further details of which are available from the IFRS Foundation on request. See the IASB Board work plan for other projects that are currently in progress. This table displays the new standards, ... IFRS 17, 'Insurance contracts' (effective 1 January 2023 or when apply IFRS 15 and IFRS 9. 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. The amendments to IFRS 16 are effective for annual periods beginning on or after June 1, 2020, with early adoption permitted. 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. 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. 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. That is, it does not require either (1) that the concession either be a direct consequence of COVID-19 (merely that it is related to COVID-19) or (2) result in reduced payments only through June 30, 2021; and includes specific guidance on acceptable accounting approaches for certain types of concessions (e.g. Explore challenges and top-of-mind concerns of business leaders today. 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. Corporate strategy insights for your industry, Explore Corporate strategy insights for your industry, Financial Services Regulatory Insights Center, Explore Financial Services Regulatory Insights Center, Explore Risk, Regulatory and Compliance Insights, Explore Corporate Strategy and Mergers & Acquisitions, Customer service transformation & technology. 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. Further information on these standards and amendments are provided in the section ‘New standards and amendments effective in 2018’. Unlike IFRS Standards, materiality is not specifically defined under authoritative US GAAP. Ensure that you communicate their impact to your stakeholders! Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. Search Close search See all results in Search Page. 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 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. 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. 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. In the November 2020 episode of our monthly IASB podcast, Hans Hoogervorst and Sue Lloyd, Chair and Vice-Chair of the Board, talk about the IASB's annual joint education session with the US standard-setter FASB, current Post-implementation Review projects, Management Commentary and Subsidiaries that are SMEs. Seventy academics and practitioners, including standard-setters and regulators, came together for the virtual IASB Research Forum 2020 to discuss the latest research into financial reporting matters. Although the headline of this quarter is COVID-19, some amendments are effective in 2020 and beyond. Like you, we believe those who understand and apply IFRS will enjoy expanded career opportunities as its use is spreading around the world. From the IFRS Institute – December 4, 2020. statements will need to consider the newly effective standards IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments , as well as other amendments to IFRSs. Invalid characters in 'Your Query' field. Instead, onerous contracts are accounted for under specific Codification topics/subtopics depending on the type of contract involved. rent deferrals). Description: For accounting periods beginning on 1 January 2021, excluding changes not yet required. Both standards were issued in 2014 and are effective for annual periods beginning Jan. 1, 2018. The right needs to be unconditional and must have substance. 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. Instead, the company can elect to account for eligible COVID-19 related rent concessions, whatever their form (e.g. Dynamics in IFRS: You find the most important information concerning new IFRS Standards and the latest interpretations here. Top 10 differences between interim financial reporting requirements under IAS® 34 and ASC 270. 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. Our multi-disciplinary approach and deep, practical industry knowledge, skills and capabilities help our clients meet challenges and respond to opportunities. Are you ready for the new IFRS® accounting standards? Please complete the CAPTCHA field to verify you are human. In addition, other projects that were slated for completion in Q2 2020 will not be completed until later in 2020. The effective date of ASC 606, Revenue from Contracts with Customers, has been extended by one year for all private companies that have not yet adopted the guidance, The effective date of ASC 842, Leases, for private companies and public not-for-profit entities has been extended by one year. Elect to account for eligible COVID-19 related rent concessions in lease agreements amendments to IFRS 3, business Combinations Update! The section ‘New Standards and US GAAP completion in Q2 2020 will not be permissible for audit... Not currently converged between IFRS Standards in annual periods and ASC 270 filers. 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