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Closing the GAAP: IFRS Accounting Standards
Publication date: 16 Jan 2024 (updated 11 Apr 2024)
ca Closing the GAAP
(including developments to April 11, 2024)
Effective September 30, 2023, this page replaces the quarterly issuance of the Closing the GAAP IFRS newsletters. This page is maintained and updated on a periodic basis as new pronouncements are issued. For ease of identification, publication dates have been added to updates made after this date.
Closing the GAAP: Updates to IFRS Accounting Standards
The following summarizes IFRS pronouncements that must be applied, if applicable, for the first time by a calendar year-end entity that is preparing financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) ("IFRS® Accounting Standards"). This summary sets out new requirements by the calendar year in which they are first effective.
The listing includes the following pronouncements:
The IASB has a number of projects in progress. Information on these projects is available on the IASB website here .
Information on Committee projects is available here.
Information on recent agenda decisions published by the Committee is available here.
While we have attempted to make this newsletter as complete as possible, it may not include all changes or modifications to existing authoritative literature that may affect a particular enterprise.
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Developments related to 2022 calendar years
Reference | Pronouncement and impact | Effective date | Learning more | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
IFRS 16 | COVID-19 rent concession amendment - extension
Amended to extend the date of the practical expedient from June 30, 2021 to June 30, 2022 (original amendment provided lessees with an optional practical expedient from assessing whether a rent concession related to COVID-19 is a lease modification).
| Effective for years beginning on/after April 1, 2021.
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AIP
2018-2020
| Annual improvements to IFRS Standards 2018-2020
| Effective for years beginning on/after January 1, 2022.
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IFRS 3 | Reference to Conceptual Framework
Amended to (i) replace references to the 2001 Conceptual Framework for Financial Reporting to the 2018 Conceptual Framework for Financial Reporting in order to determine what constitutes an asset or liability in a business combination, (ii) add a new exception for certain liabilities and contingent liabilities to refer to IAS 37 or IFRIC 21 rather than the 2018 Conceptual Framework, and (iii) clarify that an acquirer should not recognize contingent assets at the acquisition date.
| Effective for years beginning on/after January 1, 2022.
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IAS 37 | Onerous contracts - Cost of fulfilling a contract
Amended to clarify (i) the meaning of “costs to fulfil a contract”, and (ii) that, before a separate provision for an onerous contract is established, an entity recognizes any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract.
| Effective for years beginning on/after January 1, 2022.
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IAS 16 | Proceeds before intended use
Amended to (i) prohibit an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use (for example, the proceeds from selling samples produced when testing a machine to see if it is functioning properly), (ii) clarify that an entity is “testing whether the asset is functioning properly” when it assesses the technical and physical performance of the asset and (iii) require certain related disclosures.
| Disclosures relating to the known or reasonably estimable exposure to Pillar Two income taxes are required for years beginning on/after January 1, 2023 but are not required to be disclosed in interim financial reports for any interim period ending on/before December 31, 2023.
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Developments related to 2023 calendar years
Reference | Pronouncement and impact | Effective date | Learning more |
|---|---|---|---|
IAS 12 | Global implementation of Pillar Two
Narrow scope amendments to IAS 12 (i) provide a temporary exception from the requirement to recognize and disclose deferred taxes arising from enacted or substantively enacted tax law that implements the Pillar Two Model Rules published by the OECD, and (ii) introduce targeted disclosure requirements for affected entities.
Effective immediately and retrospectively including the requirement to disclose the fact that the exception has been applied if the entity’s income taxes will be affected by enacted or substantively enacted tax law that implements the OECD’s Pillar Two Model Rules.
| Disclosures relating to the known or reasonably estimable exposure to Pillar Two income taxes are required for years beginning on/after January 1, 2023 but are not required to be disclosed in interim financial reports for any interim period ending on/before December 31, 2023.
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IAS 12
IFRS 1
| Deferred taxes related to assets and liabilities arising from a single transaction
Amended to require companies to recognize deferred tax on particular transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. Consequential amendment to IFRS 1 to add an exception to retrospective application.
| Effective for years beginning on/after January 1, 2023.
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IAS 1 | Disclosure of accounting policies
Narrow scope amendments to improve accounting policy disclosures.
| Effective for years beginning on/after January 1, 2023.
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IAS 8 | Changes in estimates vs changes in accounting policies
Narrow scope amendments to help distinguish changes in accounting estimates from changes in accounting policies.
| Effective for years beginning on/after January 1, 2023.
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IFRS 17
IFRS 4
| Insurance contracts
New standard on accounting for insurance contracts, replacing IFRS 4, Insurance Contracts, including the following amendments:
Amended to provide clarification in a number of areas to ease implementation, simplify certain requirements and ease transition, including deferral of the effective date of IFRS 17 to years beginning on/after January 1, 2023. The fixed expiry date of the temporary exemption from applying IFRS 9 in IFRS 4 is also deferred to years beginning on/after January 1, 2023.
Amended to provide a transition option relating to the presentation of comparative information of financial assets on initial application of IFRS 17. Amendments effective at the same time as IFRS 17 are applied.
| See pronouncement and impact description.
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Developments related to 2024 calendar years
Reference | Pronouncement and impact | Effective date | Learning more |
|---|---|---|---|
IAS 7
IFRS 7
| Disclosures on supplier finance arrangements
Amended to require specific disclosures about supplier finance arrangements.
| Effective for years beginning on/after January 1, 2024.
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IAS 1 | Non-current liabilities with covenants
Amended to clarify how to classify debt and other liabilities as either current or non-current.
| Defers effective date of previous amendments to IAS 1 to years beginning on/after January 1, 2024.
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IFRS 16 | Lease liability in a sale and leaseback
Amended to address the accounting for a lease liability in a sale and leaseback transaction after the date of the transaction.
| Effective for years beginning on/after January 1, 2024.
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Developments related to 2025 calendar years
Publication Date | Reference | Pronouncement and impact | Effective date | Learning more |
|---|---|---|---|---|
August 2023 | IAS 21 | Amended to add requirements to help entities in determining whether a currency is exchangeable into another currency and the spot exchange rate to use when it is not.
| Effective for years beginning on or after January 1, 2025 with earlier application permitted.
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Developments related to 2027 calendar years
Publication Date | Reference | Pronouncement and impact | Effective date | Learning more |
|---|---|---|---|---|
April 2024 | *IFRS 18
NEW Issued in April 2024
| IFRS 18 is the new standard on financial statement presentation and disclosure with a focus on updates to the statement of profit or loss. IFRS 18 will replace IAS 1, Presentation of Financial Statements, and retains many of the existing principles in IAS 1.
| Effective for years beginning on or after January 1, 2027 with earlier application permitted. Retrospective application is required.
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*Refer to Appendix A for information related to early adoption in Canada.
Appendix A: CPA Canada Handbook
As at April 11, 2024 the following IFRS pronouncements (described above and denoted by *) have not yet been incorporated into the CPA Canada Handbook, Part I – IFRS (“Part I”) and are therefore not yet available for early adoption by Canadian entities applying Part I:
Reference | Pronouncement |
|---|---|
IFRS 18 | Presentation and Disclosure in Financial Statements
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PricewaterhouseCoopers LLP, an Ontario limited liability partnership
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