In 2009, the International Accounting Standards Board (IASB) published quite few new or revised standards but two of them account for major changes.
First, in July 2009, after a six-year development process, the IASB released the IFRS for SMEs, a stand-alone standard for small and medium-sized entities. This standard will be the subject of IFRS: What's New for 2010? (Part 2).
The second major standard is IFRS 9 "Financial instruments". Issued in November 2009, this is the first stage of the IASB's wider project to replace IAS 39 "Financial instruments: recognition and measurement".
In addition to these two major enhancements, the IASB also issued the following amendments or revisions in 2009:
Last but not least, it should be remembered that most companies will apply revised IFRS 3 and IAS 27 for the first time in their 2010 accounts. Indeed, these standards - also referred to as Business Combinations II - are effective for annual periods beginning on or after 1 July 2009 (which means 2010 annual accounts for companies whose accounting year is identical to calendar year). We will not elaborate further here as the major changes these revisions have brought have already been largely explained (see How starter kits meet IFRS - IFRS 3).
Let's turn back now to IFRS 9, the standard that will gradually replace IAS 39 for financial instruments accounting.
During the financial crisis, IAS 39 has been widely criticized. In April 2009, the G-20 leaders asked the accounting standard setters to improve standards for the valuation of financial instruments and in particular to reduce the complexity of accounting standards for financial instruments. Furthermore, the Council of the European Union urged the IASB to amend IAS 39 quickly and in time for the preparation of the 2009 year-end financial statements.
In order to speed up the replacement of IAS 39, the IASB has divided the project in 3 phases:
"
As each phase is completed (see chart above), chapters with the new requirements will be added to IFRS 9 and the relevant portions deleted from IAS 39.
The table below summarizes the main differences between IAS 39 and IFRS 9 regarding the classification and measurement of financial assets:
IFRS 9 is effective for annual periods beginning on or after 1 January 2013; earlier application is permitted.
Retrospective application is required in accordance with IAS 8 but several exceptions may apply. In particular, if an entity adopts the standard for reporting periods beginning before 1 January 2012, it is not required to restate prior periods.
In the next blog, we will focus on the IFRS for SMEs.
Your comments about the contents are very welcome. Let us know what you wish to write about.
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
User | Count |
---|---|
8 | |
6 | |
5 | |
4 | |
4 | |
3 | |
3 | |
2 | |
2 | |
2 |