So, the year 2024 has come to an end, and it's time to start preparing the financial statements for 2024.
Especially for our readers, we have compiled a list of key IFRS updates for 2024 that will be necessary for preparing the financial reports.
IFRS Amendments 2024
As of January 2024, several new and amended International Financial Reporting Standards (IFRS) have become effective, impacting financial reporting practices. Key changes include:
1. Amendments to IAS 1: Classification of Liabilities as Current or Non-current
These amendments clarify that an entity's right to defer settlement of a liability must exist at the end of the reporting period and be substantive. The likelihood of whether the entity will exercise this right is not considered. Additionally, the meaning of 'settlement' for classifying a liability has been clarified.
2. Amendments to IFRS 16: Lease Liability in a Sale and Leaseback
The amendments specify that a seller-lessee should measure lease liabilities arising from a sale and leaseback transaction at the present value of lease payments, ensuring consistency in accounting for such transactions.
3. Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements
These amendments require entities to disclose information about supplier finance arrangements, including the terms and conditions, the amount of liabilities recognized, and the associated liquidity risk, enhancing transparency regarding such financing practices.
4. IFRS 17: Insurance Contracts
Effective from January 2024, IFRS 17 replaces IFRS 4, introducing a standardized approach to accounting for insurance contracts. It aims to increase transparency and comparability across the insurance industry by establishing consistent recognition, measurement, presentation, and disclosure requirements.
It's essential for entities to assess the impact of these new and amended standards on their financial statements and ensure compliance in their 2024 financial reports.
1. Amendments to IAS 1: Classification of Liabilities as Current or Non-current
These amendments clarify that an entity's right to defer settlement of a liability must exist at the end of the reporting period and be substantive. The likelihood of whether the entity will exercise this right is not considered. Additionally, the meaning of 'settlement' for classifying a liability has been clarified.
2. Amendments to IFRS 16: Lease Liability in a Sale and Leaseback
The amendments specify that a seller-lessee should measure lease liabilities arising from a sale and leaseback transaction at the present value of lease payments, ensuring consistency in accounting for such transactions.
3. Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements
These amendments require entities to disclose information about supplier finance arrangements, including the terms and conditions, the amount of liabilities recognized, and the associated liquidity risk, enhancing transparency regarding such financing practices.
4. IFRS 17: Insurance Contracts
Effective from January 2024, IFRS 17 replaces IFRS 4, introducing a standardized approach to accounting for insurance contracts. It aims to increase transparency and comparability across the insurance industry by establishing consistent recognition, measurement, presentation, and disclosure requirements.
It's essential for entities to assess the impact of these new and amended standards on their financial statements and ensure compliance in their 2024 financial reports.
