Hello Valued Subscribers,
I trust you’ve all successfully navigated the intense heat of the 2023 year-end period. Did anyone manage to sneak in a ski trip last month? 😉
As February unfolded, a different kind of excitement has been brewing – the anticipation of two major new IFRS standards on the horizon. The IASB has been quite busy, releasing several webcasts to prepare us for these upcoming changes. Additionally, BDO has shared valuable insights into the classification of loans as current or non-current under the amended IAS 1.
Let’s dive in.
Note: You’re currently reading an older issue from the archive, so all links have been removed.
Technical Publications
Classification of loans: current or non-current?
With the changes to IAS 1 taking effect from 1 January 2024, BDO has released a detailed analysis focused on loans. This publication concentrates on the nuances of covenants and roll-overs.
Work in Progress at the IASB
IFRS 18 Presentation and Disclosure in Financial Statements
The much-anticipated IFRS 18 is set to be released next month. The IASB’s recent 10-minute webcast offers a preview, highlighting the main features of this new standard.
Background: The upcoming IFRS 18, which supersedes IAS 1, aims to enhance the comparability and transparency of financial reporting, focusing on the statement of profit or loss. Key changes include:
- The introduction of two new subtotals in the P/L statement: ‘operating profit’ and ‘profit before financing and income taxes’.
- A requirement for the reconciliation of management-defined performance measures (also known as ‘non-GAAP’ measures) with those specified by IFRS.
- Refined guidelines for the aggregation and disaggregation of information within the primary financial statements.
- Limited changes to the statement of cash flows, establishing operating profit as a starting point for the indirect method and eliminating options for the classification of interest and dividend cash flows.
Learn more:
- BDO’s publication.
- IASB’s project overview.
Next milestone: The release of IFRS 18 is expected in April 2024.
IFRS 19(?): Reduced disclosures for subsidiaries without public accountability
Another major development is expected this quarter: a new IFRS allowing eligible subsidiaries to adopt IFRS Standards with reduced disclosures. This standard will differ from the IFRS for SMEs, forming part of the core IFRS set. Although there’s no direct reference from the IASB yet, this standard is expected to be numbered ’19’. The IASB has released three webcasts discussing various perspectives on this proposal. We all await to see how national regulators respond and whether this leads to broader IFRS adoption by non-public entities.
Next milestone: New IFRS Standard is expected in May 2024.
Financial instruments with characteristics of equity
Recall from our November issue the IASB’s release of the Exposure Draft (accompanied by this snapshot) proposing amendments to IAS 32, IFRS 7, and IAS 1. The IASB has followed this up with a series of explanatory webcasts. EY’s analysis from last year also offers valuable insights.
Next milestone: The comment deadline for the Exposure Draft is set for 29 March 2024.
That’s all for this edition of Reporting Period. Your feedback is invaluable, so please feel free to reply directly to this email with your thoughts and comments.
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Best regards,
Marek