- Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters (Amendment to FRS 1)
- Improving Disclosures about Financial Instruments (Amendments to FRS 7)
- Amendments to FRS 132 Financial Instruments: Presentation
The Amendments to FRS 1 and FRS 7 comprise word for word of IASB’s Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (Amendment to IFRS 1) and Improving Disclosures about Financial Instruments (Amendments to IFRS 7), respectively.
The Improving Disclosures about Financial Instruments reinforces existing principles for disclosures about liquidity risk. Also, the amendments require enhanced disclosures about fair value measurements in which a three-level fair value hierarchy is introduced. An entity is required to classify fair value measurements using this hierarchy which aims to reflect the inputs used in making the measurement.
At the same time, the Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters relieves first-time adopters of Financial Reporting Standards (FRSs) from providing the additional disclosures required from the amendments to FRS 7 as noted in the previous paragraph.
The Amendments to FRS 132 relate to the Classification of Rights Issues and the transitional provision in relation to compound instruments.
The amendments addressing the Classification of Rights Issues is virtually identical to that Classification of Rights Issues (Amendments to IAS 32) issued by IASB in October 2009. The amendments deals with accounting for rights issues (rights, options or warrants) which are denominated in a currency other than the functional currency of the issuer. Previously such rights issues were accounted for as derivative liabilities. However, the amendments issued today require that, provided certain conditions are met, such rights issues are classified as equity regardless of the currency in which the exercise price is denominated.
As for the amendments relating to compound instruments, the transitional provision that exempted entities from applying the split accounting for compound instruments issued before reporting periods of 1 January 2003 is removed.
MASB says the amendment complies with the FRS 139 Financial Instruments: Recognition and Measurement, which came into effect on 1 January 2010, which requires any derivatives features embedded in the compound financial instrument to be separated from the host contract.
The Amendments to FRS 1 and FRS 7 shall apply to financial statements of annual periods beginning on or after 1 January 2011.
The Amendments to FRS 132 as identified in paragraphs 95A, 97AA and 97AB of the Standard shall apply to financial statements of annual periods beginning on or after 1 January 2010. The amendments in paragraphs 11, 16 and 97E of the Standard, relating to Classification of Rights Issues shall apply to financial statements of annual periods beginning on or after 1 March 2010.