Annual Improvements to IFRS 2018-2020


The IASB published Annual Improvements to IFRS 2018–2020 in May 2020, a collection of four different amendments to IFRS Standards. These amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.

The amendments included in this publication are as follows:

  • IFRS 1 First-time Adoption of International Financial Reporting StandardsSubsidiary as a first-time adopter. The amendment permits a subsidiary that applies the exemption in paragraph D16(a) of IFRS 1 to measure cumulative translation differences for all foreign operations at the carrying amount that would be included in the parent’s consolidated financial statements, based on the parent’s date of transition to IFRS Standards.
  • IFRS 9 Financial InstrumentsFees in the ‘10 per cent’ test for derecognition of financial liabilities. The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognise a financial liability. The borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.
  • IFRS 16 LeasesLease incentives. The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the example the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated in that example.
  • IAS 41 AgricultureTaxation in fair value measurements. The amendment removes the requirement in paragraph 22 of IAS 41 to exclude cash flows for taxation when measuring the fair value of a biological asset using a present value technique. This is to ensure consistency with the requirements in IFRS 13 Fair Value Measurement.

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