A5. In IAS 20 Accounting
for Government Grants and Disclosure of Government
Assistance, paragraphs 20-22 are amended to read as
follows:
21. In some
circumstances, a government grant may be awarded for the
purpose of giving immediate financial support to an entity
rather than as an incentive to undertake specific expenditures.
Such grants may be confined to an individual entity and may
not be available to a whole class of beneficiaries. These
circumstances may warrant recognising a grant as income in the
period in which the entity qualifies to receive it, with
disclosure to ensure that its effect is clearly understood.
22. A government
grant may become receivable by an entity as compensation for
expenses or losses incurred in a previous period. Such a grant
is recognised as income of the period in which it becomes
receivable, with disclosure to ensure that its effect is
clearly understood.
A6. In IAS 22 Business
Combinations, paragraph 100 is deleted.
A7. In IAS 23 Borrowing
Costs, paragraph 30 is amended to read as follows:
A8. IAS 34 Interim
Financial Reporting is amended as described below.
Paragraph 17 is amended to read as follows:
17. Examples of the
kinds of disclosures that are required by paragraph 16 are set
out below. Individual Standards and Interpretations provide
guidance regarding disclosures for many of these items:
(a) the write-down
of inventories to net realisable value and the reversal of
such a write-down;
(b) recognition of a
loss from the impairment of property, plant and equipment,
intangible assets, or other assets, and the reversal of such
an impairment loss;
(c) the reversal of
any provisions for the costs of restructuring;
(d) acquisitions and
disposals of items of property, plant and equipment;
(e) commitments for
the purchase of property, plant and equipment;
(f) litigation
settlements;
(g) corrections of
prior period errors;
(h) [deleted];
(i) any loan default
or breach of a loan agreement that has not been remedied on or
before the balance sheet date; and
(j) related party
transactions.
Paragraphs 24, 25
and 27 are amended to read as follows:
24. IAS 1 Presentation
of Financial Statements and IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors define
an item as material if its omission or misstatement could
influence the economic decisions of users of the financial
statements. IAS 1 requires separate disclosure of material
items, including (for example) discontinuing operations, and
IAS 8 requires disclosure of changes in accounting estimates,
errors and changes in accounting policies. The two Standards
do not contain quantified guidance as to materiality.
25. While judgement
is always required in assessing materiality, this Standard
bases the recognition and disclosure decision on data for the
interim period by itself for reasons of understandability of
the interim figures. Thus, for example, unusual items, changes
in accounting policies or estimates, and errors are recognised
and disclosed on the basis of materiality in relation to
interim period data to avoid misleading inferences that might
result from non-disclosure. The overriding goal is to ensure
that an interim financial report includes all information that
is relevant to understanding an entity’s financial position
and performance during the interim period.
27. IAS 8 requires
disclosure of the nature and (if practicable) the amount of a
change in estimate that either has a material effect in the
current period or is expected to have a material effect in
subsequent periods. Paragraph 16(d) of this Standard requires
similar disclosure in an interim financial report. Examples
include changes in estimate in the final interim period
relating to inventory write-downs, restructurings, or
impairment losses that were reported in an earlier interim
period of the financial year. The disclosure required by the
preceding paragraph is consistent with the IAS 8 requirement
and is intended to be narrow in scope—relating only to the
change in estimate. An entity is not required to include
additional interim period financial information in its annual
financial statements.
Paragraphs 43 and 44
are amended to read as follows:
43. A change in
accounting policy, other than one for which the transition
is specified by a new Standard or Interpretation,
shall
be reflected by:
(a) restating the
financial statements of prior interim periods of
the current financial year and the comparable
interim periods of any prior financial years
that will be restated in the annual financial statements
in accordance with IAS 8; or
(b) when it is
impracticable to determine the cumulative effect
at the beginning of the financial year of applying
a new accounting policy to all prior periods, adjusting
the financial statements of prior interim periods
of the current financial year, and comparable interim
periods of prior financial years to apply the new
accounting policy prospectively from the earliest
date
practicable.
44. One objective of
the preceding principle is to ensure that a single
accounting policy is applied to a particular class of transactions
throughout an entire financial year. Under IAS 8, a
change in accounting policy is reflected by retrospective
application,
with restatement of prior period financial data as far
back as is practicable. However, if the cumulative amount
of
the adjustment relating to prior financial years is impracticable
to determine, then under IAS 8 the new policy is applied
prospectively from the earliest date practicable. The effect
of the principle in paragraph 43 is to require that within
the current financial year any change in accounting policy
is applied either retrospectively or, if that is not
practicable, prospectively, from no later than the
beginning of the financial year.
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