Various IFRS and IAS standards deal with assets, with IFRS 9 Financial Instruments specifically covering the classification and measurement of financial assets. Other key standards include IAS 16 (Property, Plant and Equipment), IAS 38 (Intangible Assets), IAS 36 (Impairment of Assets), and IFRS 16 (Leases).
IAS 39 is no longer effective for most entities. It was replaced by IFRS 9 Financial Instruments from 1 January 2018, which introduced new rules for classification, measurement, impairment, and hedge accounting.
IFRS 18 replaces IAS 1 and responds to investors' demand for better information about companies' financial performance. New requirements include: new categories and subtotals in the statement of profit or loss, disclosure of MPMs and enhanced requirements for grouping information.
IFRS 9 ECL Allowance
For example, even if there was only a 5% chance that a loss might occur, this possibility must be factored into the ECL calculation, whereas under IAS 37, no provision would be recognised as the loss was not probable.
IAS 16
In essence, IFRS 9 dictates how financial instruments are valued and provisions are made, while IAS 32 determines where they are shown on the financial statements and how their nature (debt vs. equity) is reflected.
The guidance in IFRS 13 does not apply to transactions dealt with by certain IFRS® Accounting Standards, for example, share-based payment transactions in IFRS 2 Share-based Payment, leasing transactions in IFRS 16 Leases, or to measurements that are similar to fair value but are not fair value, for example, net ...
IAS 36 does not apply
Contract assets (IFRS 15) Deferred and current tax assets (IAS 12) Assets arising from employee benefits (IAS 19) Financial assets (IFRS 9)
Summary of Key Changes between IFRS 17 vs IFRS 4
Key changes include mandatory CSM-based profit recognition, enhanced disclosure requirements, and current value measurement approaches. These changes improve comparability but demand significant implementation investments.
Rights for intangible assets such as films, recordings, plays, patents, and copyrights are not covered by IFRS 16, as indicated in IFRS 16.3(e). Such rights are governed by IAS 38. However, for other intangible assets, lessees can opt to apply either IAS 38 or IFRS 16 (IFRS 16.4).
IFRS 18 includes detailed application guidance relating to the classification of income and expenses arising from the derecognition of assets and liabilities, the remeasurement of an asset or liability when designated as held for sale, and upon a change in use of an asset or liability.
The four pillars of IFRS S1 and S2 are governance, strategy, risk management and metrics and targets.
From 2027, IFRS 18 'Presentation and Disclosure in Financial Statements' will replace IAS 1 while carrying forward many of the requirements in IAS 1. Some of the requirements in IAS 1 are moved to IAS 8 and IFRS 7.
An entity shall classify financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both: (a) the entity's business model for managing the financial assets and Page 6 IFRS 9 Financial Instruments 6 (b) the contractual ...
IFRS 15 does not apply to wholly unperformed contracts where all parties have the enforceable right to end the contract without penalty. These contracts do not affect an entity's financial position until either party performs under the contract.
IFRS 9 Stage 1,2,3: The Three Stages of Expected Credit Losses
IFRS 17 is applicable for NHS bodies from 2025/26. It provides accounting guidance for entities who are issuers of insurance contracts. The new standard is applied retrospectively from 1 April 2024, restating comparatives as though IFRS 17 had always applied.
The definition of a reinsurance contract under IFRS 17 is an insurance contract issued by one entity (the reinsurer) to compensate another entity for claims arising from one or more insurance contracts issued by that other entity (underlying contracts).
Transparency: The introduction of IFRS 16 was aimed at increasing the transparency and accuracy of financial reporting. By requiring companies to recognize all leases on their balance sheets, the new standard ensures that financial statements provide a more accurate picture of a company's financial position.
IAS 36 applies to all assets except those for which other Standards address impairment.
In accordance with IAS 39, financial assets are to be classified in the following four categories: 1. financial assets at fair value through profit or loss; 2. held-to-maturity investments; 3. loans and receivables; 4.
Explanation: Deferred charges are not a major asset classification. The major asset classifications are current assets, long-term assets, and property, plant, and equipment. Assets are future economic resources.
Recognition of financial assets and liabilities
In accordance with IFRS 9, Financial Instruments, a company recognises a financial asset or a financial liability when the company becomes party to the contractual provisions of the instrument.
There are optional recognition exemptions when the lease term is 12 months or less or when the underlying asset has a low value when new.
IFRS 3 defines fair value (consistently with IFRS 13) but does not provide detailed guidance on the valuation methodology and instead refers to IFRS 13 for valuation models and techniques. IFRS 3 does however include limited guidance on some specific situations. and liabilities, such as a business.