The International Accounting Standards Board has issued amendments to IFRS 9: Financial Instruments and to IAS 28: Investments in Associates and Joint Ventures to aid implementation.
The amendments to the financial instruments standard, IFRS 9, allow companies to measure particular prepayable financial assets with so-called negative compensation at amortized cost or at fair value through other comprehensive income if a specified condition is met — instead of at fair value through profit or loss.
The amendments to IAS 28 clarify that companies should use IFRS 9 to account for long-term interests in an associate or joint venture, to which the equity method is not applied.
The amendments are effective from 1 January 2019, with early application permitted.
The Board has also published an example that illustrates how companies apply the requirements in IFRS 9 and IAS 28 to long-term interests in an associate or joint venture.
Proposed taxonomy update
The IFRS Taxonomy will be updated to reflect the new presentation and disclosure requirements introduced by the amendments to IFRS 9. Consequently, the Board has also published the Proposed IFRS Taxonomy Update—Prepayment Features with Negative Compensation for public consultation. The comment deadline is 11 December 2017.
Access the documents by clicking the links below: