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.