The European Union (EU) has adopted amendments
made to two International Standards on Auditing (ISA).
The revised versions of IAS 1 Presentation of
Financial Statements and IAS 19 Employee Benefits as
published by the International Accounting Standards Board have been
formally incorporated into EU law.
The main amendments to IAS 1 are:
- Preserve the amendments made to IAS 1 in 2007
to require profit or loss and OCI to be presented together. For
example as either a single ‘statement of profit or loss and
comprehensive income’, or a separate ‘statement of profit or loss’
and a ‘statement of comprehensive income’ – rather than requiring a
single continuous statement as was proposed in the exposure
draft; - Require entities to group items presented in
OCI based on whether they could be reclassified to profit or loss
subsequently. For example, those that might be reclassified and
those that will not be reclassified; and, - Require tax associated with items presented
before tax to be shown separately for each of the two groups of OCI
items (without changing the option to present items of OCI either
before tax or net of tax).
The main amendments to IAS 19 are:
- Require recognition of changes in the net
defined benefit liability (asset) including immediate recognition
of defined benefit cost, disaggregation of defined benefit cost
into components, recognition of re-measurements in other
comprehensive income, plan amendments, curtailments and
settlements; - Introduce enhanced disclosures about
defined benefit plans; - Modify accounting for termination benefits,
including distinguishing benefits provided in exchange for service
and benefits provided in exchange for the termination of employment
and affect the recognition and measurement of termination
benefits; - Clarification of miscellaneous issues,
including the classification of employee benefits, current
estimates of mortality rates, tax and administration costs and
risk-sharing and conditional indexation features; and, - Incorporate other matters submitted to the
IFRS Interpretations Committee.
The IAS 1 amendments must be applied to annual
periods beginning on or after 1 July 2012 and IAS 19 at latest, to
annual periods beginning on or after 1 January 2013.
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