July-August 2025

Hey Everyone,

I hope you had a great summer, managed to recharge, and didn’t return to an overflowing inbox. Since you’re reading this, you’re probably thinking it’s a good moment to catch up on IFRS developments 😉

You may remember that we skipped the August edition, so this time we’ve got two months’ worth of updates. Don’t worry though, it’s not as heavy as it sounds!

Technical Publications

EY’s updated impact analysis of IFRS 18

IFRS 18 becomes effective in 2027 and that may sound far off, but don’t forget this new standard requires restating comparatives. So, by 2026, we should at least have a pretty good idea of what our P&L layout will look like under IFRS 18. It’s likely that some changes to how expenses are tracked in ERP/accounting systems will be needed. The more ambitious companies may even start shadow reporting under IFRS 18 to get comfortable with the new format.

On that note, EY has released an updated ​technical analysis of IFRS 18​, now with fresh illustrations and FAQs.

KPMG’s updated IFRS 15 handbook

No, the IASB didn’t sneakily change IFRS 15 while you were away on holiday 😉 But KPMG has published the 2025 edition of their ​IFRS 15 handbook​. At 335 pages, it’s not exactly a cover-to-cover read, but it’s an invaluable reference whenever a revenue recognition issue comes up.

Cash transfers and IFRS 9 — a treasury perspective

I’m sure you remember the recent IFRS 9 amendments regarding the optional exception for derecognising financial liabilities settled via electronic payment systems 😉 In that context, PwC published an analysis of these amendments ​from a corporate treasury perspective​. Even if you’re not a treasurer, it’s a worthwhile read. (Note: free registration on PwC Viewpoint may be required.)

Recent IFRS 9 amendments — EY’s video explainers

Still on IFRS 9 amendments, EY has gone a bit “YouTuber” and released two short (~15 minute) videos covering:

Convergence of supervisory expectations and IFRS in banking

Accountancy Europe has published a paper outlining the ​current state of convergence​ between supervisory expectations and financial reporting of banks under IFRS. The paper highlights similarities and differences in areas where regulatory pronouncements overlap with IFRS requirements, such as Stage 1–3 transfers, the low credit risk exemption, and fair value measurements.

IFRS Interpretations Committee Meeting

The Committee met in late June, but the IFRIC Update wasn’t yet out when I wrote the June edition. So let’s catch up now.

Meaning of ‘incremental’ transaction costs in IFRS 9

You may recall from that June edition that I mentioned a topic originally raised by one of the ​IFRS Community​ members: do legal advisory fees incurred during loan negotiations qualify as incremental transaction costs under IFRS 9, even if incurred before the loan is signed?

This led to a discussion on our forums:

  • One view was that costs are “incremental” only if they’re directly triggered by executing the contract (that is, they wouldn’t have been incurred otherwise). This follows IFRS 9 definition of an incremental cost as one that “would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument.”
  • The alternative view was that preparatory costs should also qualify, provided the contract is likely to be executed.

Both sides had strong points! That’s why I submitted the question to the IFRS Interpretations Committee (you can read my ​three-page submission here​).

The Committee’s observation is that most companies and audit firms adopt the broader view: they treat such pre-signing costs as incremental under IFRS 9. However, the draft agenda decision is light on explanation and it doesn’t clarify whether the narrower interpretation is also acceptable.

I’ve therefore followed up with ​a comment letter​ suggesting the Committee include some explanatory material. If you’d like to support this, please send your own letter to commentletters@ifrs.org.

Learn more:

Next steps: The Committee’s tentative agenda decision is open for comment until 6 October 2025.

Embedded prepayment option

Another submission to the Committee asked whether the term “the entity” in paragraph B4.3.5(e)(ii) of IFRS 9 (i.e. assessing whether to separate an embedded prepayment option in a financial liability) refers to the lender or the borrower. I bet this question has been nagging at you too 😉

One view looks at it from the lender’s side (i.e. foregone interest). The other reads it from the borrower’s perspective, consistent with how “entity” is usually used in IFRS. Feedback gathered by the Committee suggests that, in practice, most take it as referring to the lender.

Learn more:

Next steps: The Committee’s tentative agenda decision is open for comment until 6 October 2025.

Updates to agenda decisions for IFRS 18

The IASB has asked the Committee to review existing agenda decisions that refer to general requirements on financial statements and replace references to IAS 1 with IFRS 18. The Committee obviously agreed 🙂

The proposed edits are shown as tracked changes in ​the tentative agenda decision​.

Learn more in these staff papers:

Next steps: Comments are open until 6 October 2025. Note: the Committee is only seeking feedback on the proposed updates (not on the substance of the underlying agenda decisions).

Work in Progress at the IASB

Here are the key updates from the IASB’s agenda.

Catch-up amendments to IFRS 19

You’ll recall that IFRS 19, once adopted, allows non-public subsidiaries to apply IFRS with reduced disclosures. But because IFRS 19 was issued in May 2024, it didn’t yet address disclosure requirements added by later amendments. So, the IASB has issued “catch-up” amendments to IFRS 19, reducing disclosure requirements introduced by:

  • IFRS 18,
  • Amendments to IAS 7 and IFRS 7 on supplier finance arrangements,
  • Amendments to IAS 12 on the OECD’s Pillar Two tax reform,
  • Lack of Exchangeability – amendments to IAS 21, and
  • Amendments to the classification and measurement of financial instruments (IFRS 9 and IFRS 7).

For details, see ​Deloitte’s technical publication​. The ​full text of the amendments​ is available to paid subscribers at IFRS.org only.

“Near-final” examples on reporting uncertainties

The IFRS Foundation has published ​”near-final” examples​ on reporting uncertainties in financial statements. You may recall that this project started as “Climate-related and Other Uncertainties”, but the IASB has since broadened it to cover all types of uncertainties, with climate change used only as an illustration.

By the way, “near-final” isn’t a term I’ve seen before in IFRS publications. I’m just hoping we’re not heading into the territory of “final”, “final 2”, and “final final” versions 😉

Next milestone: The IASB plans to issue the final examples in October 2025.

Miscellany

Differences between audits and reviews

The team at RSM Australia has prepared a neat ​summary of the key differences​ between audit and review engagements, including the level of assurance provided in each.

That’s all for this edition of Reporting Period. Thanks for reading!

Best regards,
Marek