8. Annex NSA IAS 1

File information

Publication date
02 December 2022
Format
PDF, 104.9 KB
Download original PDF

UK-adopted international accounting standards contain copyright material of the IFRS® Foundation (Foundation) in respect of which all rights are reserved.

Reproduced and distributed by the UK Endorsement Board (“UKEB”), pursuant to the delegation by the Secretary of State in the International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021 No. 609, with the permission of the Foundation within the United Kingdom only. No rights granted to third parties other than as permitted by the Terms of Use (see below) without the prior written permission of the UKEB, and the Foundation.

'UK-adopted international accounting standards' are issued by the UKEB in respect of their application in the United Kingdom and have not been prepared or endorsed by the International Accounting Standards Board.

Terms of Use for Users

1The IFRS Foundation and the UK Endorsement Board (“UKEB”) (pursuant to the delegation by the Secretary of State in the International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021 No. 609), grant users of the UK-adopted international accounting standards' (Users) the permission to reproduce the 'UK-adopted international accounting standards' for

  1. the User's Professional Use, or
  2. private study and education

Professional Use: means use of ‘UK-adopted international accounting standards' in the User's professional capacity in connection with the business of providing accounting services for the purpose of application of IFRS as adopted by the UK for preparation of financial statements and/or financial statement analysis to the User's clients or to the business in which the User is engaged as an accountant.

For the avoidance of doubt, the abovementioned usage does not include any kind of activities that make (commercial) use of the ‘UK-adopted international accounting standards' other than direct or indirect application of the 'UK-adopted international accounting standards' such as but not limited to commercial seminars, conferences, commercial training or similar events.

2For any application that falls outside Professional Use, Users shall be obliged to contact the UKEB and the IFRS Foundation for a separate individual licence under terms and conditions to be mutually agreed.

3Except as otherwise expressly permitted in this notice, Users shall not, without prior written permission of the UKEB and the Foundation, have the right to license, sublicense, transmit, transfer, sell, rent, or otherwise distribute any portion of the 'UK-adopted international accounting standards' to third parties in any form or by any means, whether electronic, mechanical or otherwise either currently known or yet to be invented.

4Users are not permitted to modify or make alterations, additions or amendments to or create any derivative works from the ‘UK-adopted international accounting standards' save as otherwise expressly permitted in this notice.

5For further details about licensing the IFRS Foundation's intellectual property please contact [email protected]

Amendments to IAS 1 Presentation of Financial Statements

Paragraphs 7, 10, 114, 117 and 122 are amended. Paragraphs 117A–117E and 139V are added. Paragraphs 118, 119 and 121 are deleted. New text is underlined and deleted text is struck through.

Definitions

7The following terms are used in this Standard with the meanings specified:

Accounting policies are defined in paragraph 5 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and the term is used in this Standard with the same meaning.

Financial statements

Complete set of financial statements

10A complete set of financial statements comprises:

  1. notes, comprising material significant accounting policy information policies and other explanatory information;

Structure and content

Notes

Structure

114Examples of systematic ordering or grouping of the notes include:

  1. following the order of the line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position, such as:
    1. material significant—accounting policy information policies applied (see paragraph 117);

Disclosure of accounting policy information policies

117An entity shall disclose material its significant accounting policy information (see paragraph 7). Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. policies comprising:

  1. the measurement basis (or bases) used in preparing the financial statements; and
  2. the other accounting policies used that are relevant to an understanding of the financial statements.

117AAccounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may nevertheless be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material. 117BAccounting policy information is expected to be material if users of an entity's financial statements would need it to understand other material information in the financial statements. For example, an entity is likely to consider accounting policy information material to its financial statements if that information relates to material transactions, other events or conditions and:

  1. the entity changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
  2. the entity chose the accounting policy from one or more options permitted by IFRSs—such a situation could arise if the entity chose to measure investment property at historical cost rather than fair value;
  3. the accounting policy was developed in accordance with IAS 8 in the absence of an IFRS that specifically applies;
  1. the accounting policy relates to an area for which an entity is required to make significant judgements or assumptions in applying an accounting policy, and the entity discloses those judgements or assumptions in accordance with paragraphs 122 and 125; or
  2. the accounting required for them is complex and users of the entity's financial statements would otherwise not understand those material transactions, other events or conditions—such a situation could arise if an entity applies more than one IFRS to a class of material transactions.

117CAccounting policy information that focuses on how an entity has applied the requirements of the IFRSs to its own circumstances provides entity-specific information that is more useful to users of financial statements than standardised information, or information that only duplicates or summarises the requirements of the IFRSs. 117DIf an entity discloses immaterial accounting policy information, such information shall not obscure material accounting policy information. 117EAn entity's conclusion that accounting policy information is immaterial does not affect the related disclosure requirements set out in other IFRSs. 118[Deleted]It is important for an entity to inform users of the measurement basis or bases used in the financial statements (for example, historical cost, current cost, net realisable value, fair value or recoverable amount) because the basis on which an entity prepares the financial statements significantly affects users' analysis. When an entity uses more than one measurement basis in the financial statements, for example when particular classes of assets are revalued, it is sufficient to provide an indication of the categories of assets and liabilities to which each measurement basis is applied.

119[Deleted]In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure would assist users in understanding how transactions, other events and conditions are reflected in reported financial performance and financial position. Each entity consider the nature of its operations and the policies that the users of its financial statements would expect to be disclosed for that type of entity. Disclosure of particular accounting policies is especially useful to users when those policies are selected from alternatives allowed in IFRSs. An example is disclosure of whether an entity applies the fair value or cost model to its investment property (see IAS 40 Investment Property). Some IFRSs specifically require disclosure of particular accounting policies, including choices made by management between different policies they allow. For example, IAS 16 requires disclosure of the measurement bases used for classes of property, plant and equipment.

120[Deleted]

121[Deleted]An accounting policy may be significant because of the nature of the entity's operations even if amounts for current and prior periods are not naterial. It is also appropriate to disclose each significant accounting policy that is not specifically required by IFRSs but the entity selects and applies in accordance with IAS 8.

122An entity shall disclose, along with material its significant accounting policy information policies or other notes, the judgements, apart from those involving estimations (see paragraph 125), that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Transition and effective date

139VDisclosure of Accounting Policies, which amends IAS 1, issued in February 2021, amended paragraphs 7, 10, 114, 117 and 122, added paragraphs 117A–117E and deleted paragraphs 118, 119 and 121. It also amended IFRS Practice Statement 2 Making Materiality Judgements. An entity shall apply the amendments to IAS 1 for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted. If an entity applies those amendments for an earlier period, it shall disclose that fact.

Amendments to IFRS Practice Statement 2 Making Materiality Judgements

[Amendments not applicable to requirements]

Amendments to other IFRS Standards and publications

Amendments to IFRS 7 Financial Instruments: Disclosures

Paragraphs 21 and B5 are amended. Paragraph 4411 is added. New text is underlined and deleted text is struck through.

Significance of financial instruments for financial position and performance

Other disclosures
Accounting policies

21In accordance with paragraph 117 of IAS 1 Presentation of Financial Statements (as revised in 2007), an entity discloses material its significant accounting policy information policies comprising the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements. Information about the measurement basis (or bases) for financial instruments used in preparing the financial statements is expected to be material accounting policy information.

Effective date and transition

4411Disclosure of Accounting Policies, which amends IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, and was issued in February 2021, amended paragraphs 21 and B5. An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted. If an entity applies the amendment for an earlier period, it shall disclose that fact.

Appendix B

Application guidance

Classes of financial instruments and level of disclosure (paragraph 6)

B5 Other disclosure—accounting policies (paragraph 21)

Paragraph 21 requires disclosure of material accounting policy information, which is expected to include information about the measurement basis (or bases) for financial instruments used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements. For financial instruments, such disclosure may include:

Paragraph 122 of IAS 1 (as revised in 2007) also requires entities to disclose, along with material its significant- accounting policy information policies– or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Amendments to IAS 26 Accounting and Reporting by Retirement Benefit Plans

Paragraph 34 is amended and paragraph 38 is added. New text is underlined and deleted text is struck through.

All plans

34Disclosure

The financial statements of a retirement benefit plan, whether defined benefit or defined contribution, shall also contain the following information:

  1. material a summary of significant accounting policy information policies; and

Effective date

38Disclosure of Accounting Policies, which amends IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements, and was issued in February 2021, amended paragraph 34. An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted. If an entity applies the amendment for an earlier period, it shall disclose that fact.

Amendments to IAS 34 Interim Financial Reporting

Paragraph 5 is amended and paragraph 60 is added. New text is underlined and deleted text is struck through.

Content of an interim financial report

5IAS 1 defines a complete set of financial statements as including the following components:

  1. notes, material comprising significant accounting policy information policies and other explanatory information;

Effective date

60Disclosure of Accounting Policies, which amends IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, and was issued in February 2021, amended paragraph 5. An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted. If an entity applies the amendment for an earlier period, it shall disclose that fact.