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Amendments
to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures, Amendments to the Classification and Measurement of
Financial Instruments |
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The
amendments address the following matters:
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Clarifications are added as to the date of recognition and derecognition of financial instruments, and an exception is added with respect
to the timing of derecognizing financial liabilities settled by electronic transfers of cash;
•
Classification of financial assets –
o
Updated application guidance for assessing whether contractual cash flows of a financial asset are solely payments of principal and interest
(SPPI) when the contractual terms of the asset include contingent features (such as linkage to ESG measures) and examples on the matter.
o
Clarification as to when financial instruments are contractually linked and when they are non-recourse, for the purpose of determining
whether they are solely payments of principal and interest (SPPI).
•
Updated disclosure requirements for financial instruments having contingent features that are not directly related to changes in the basic
risks/cost of the instrument; and
•
Updated disclosure requirements for investments in equity instruments measured at fair value through other comprehensive income (FVOCI).
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The
amendments are effective for annual reporting periods beginning on or after January 1, 2026. Earlier application is permitted. An entity
may choose to early apply all the amendments or only the amendments regarding the classification of financial assets (including the amendment
to IFRS 7 that includes the related disclosure requirements).
The
amendment to IFRS 9 is to be applied retrospectively and there is no requirement to restate comparative data. In the application of the
amendment to IFRS 7 an entity is not required to provide disclosures with respect to periods before the initial date of application of
the amendments. |
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The
Group is examining the effects of the amendments on the financial statements with no plans for early adoption. |
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(2) IFRS
18, Presentation and Disclosure in Financial Statements |
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This
standard replaces IAS 1, Presentation of Financial Statements. The standard provides guidance for
improving the structure and content of the financial statements, particularly the income statement.
The
standard includes new disclosure and presentation requirements as well as requirements that were taken from IAS 1, Presentation
of Financial Statements.
As
part of the new disclosure requirements, it is required to present two subtotals in the income statement: operating profit and profit
before financing and taxes.
Furthermore,
the results in the income statement will be classified into three new categories: an operating category, an investing category and a financing
category.
In
addition to the changes in the structure of the income statements, the standard also includes a requirement to provide separate disclosure
in the financial statements regarding the use of management-defined performance measures (MPM).
Furthermore,
the standard adds specific guidance for aggregation and disaggregation of items in the financial statements and in the notes.
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The
standard’s initial date of application is for annual reporting periods beginning on or after January 1, 2027 with earlier application
being permitted. |
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The
Group is examining the effects of the standard on its financial statements with no plans for early adoption. |