54. Future accounting standards

The following provides a list of accounting standards, amendments and interpretations that will take effect for the Group after December 31, 2020.

  • IFRS 17 - Insurance contracts”, issued in May 2017. The standard will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2021, with earlier application permitted.
  • Amendment to IFRS 16: COVID 19-related rent concessions, issued on May 28, 2020 in order to permit lessees to not account for rent concessions (rent payment holidays, deferral of lease payments, reductions in rent for a period of time, possibly followed by rent increases in future periods) as lease modifications if they are a direct consequence of the COVID-19 pandemic and meet certain conditions. According to IFRS 16, a lease modification is a change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease. Accordingly, rent concessions would represent lease modifications unless they were provided for in the original lease agreement. The amendment applies only to lessees, while lessors are required to apply the current provisions of IFRS 16. The amendment, which applies retrospectively for annual reporting periods beginning on or after June 1, 2020, was not applied early by the Group.
  • Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”, issued in September 2014. The amendments clarify the accounting treatment for sales or contribution of assets between an investor and its associates or joint ventures. They confirm that the accounting treatment depends on whether the assets sold or contributed to an associate or joint venture constitute a business (as defined in IFRS 3). The IASB has deferred the effective date of these amendments indefinitely, but if the amendments are applied early, they must be applied prospectively.
  • Amendments to IAS 1 - Classification of Liabilities as Current or Non-current”, issued in January 2020. The amendments regard the provisions of IAS 1 concerning the presentation of liabilities. More specifically, the changes clarify:
    • the criteria to adopt in classifying a liability as current or non-current, specifying the meaning of right of an entity to defer settlement and that that right must exist at the end of the reporting period;
    • the classification is unaffected by the intentions or expectations of management about when the entity will exercise its right to defer settlement of a liability;
    • that the right to defer exists if and only if the entity satisfies the terms of the loan at the end of the reporting period, even if the creditor does not verify compliance until later; and
    • that settlement regards the transfer to the counterparty of cash, equity instruments, other assets or services.
  • The amendments will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2023, with earlier application permitted.
  • Amendments to IFRS 3 - Reference to the Conceptual Framework” issued in May 2020. The amendments are intended to replace a reference to the definitions of assets and liabilities provided by the Revised Conceptual Framework for Financial Reporting issued in March 2018 (Conceptual Framework) without significantly changing its provisions. The amendments also add to IFRS 3 a requirement that, for transactions and other events within the scope of “IAS 37 - Provisions, contingent liabilities and contingent assets” or “IFRIC 21 - Levies”, an acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination. Finally, the amendments clarify the existing guidelines in IFRS 3 for contingent assets acquired in a business combination, specifying that, if it is not sure that an asset exists at the acquisition date, the contingent asset shall not be recognized. The amendments will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2022.
  • Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use”, issued in May 2020. The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related cost in profit or loss. The amendments will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2022. Early application is permitted.
  • Amendments to IAS 37 - Onerous Contracts - Costs of Fulfilling a Contract”, issued in May 2020. The amendments specify which costs an entity includes in determining the cost of fulfilling a contract for the purpose of assessing whether the contract is onerous. To this end, the cost of fulfilling a contract comprises the costs that relate directly to the contract. These consist of the incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. The amendments will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2022. Early application is permitted.
  • Annual improvements to IFRS Standards 2018-2020”, issued in May 2020. The document mainly comprises amendments to the following standards:
    • IFRS 1 - First-Time Adoption of International Financial Reporting Standards”; the amendment simplifies the application of IFRS 1 by an investee (subsidiary, associate or joint venture) that becomes a first-time adopter of IFRS Standards after its parent has already adopted them. More specifically, if the investee adopts the IFRSs after its parent and applies IFRS 1.D16 (a), then the investee can elect to measure the cumulative translation differences for all foreign operations at the amounts that would be included in the parent’s consolidated financial statements, based on parent’s date of transition to the IFRSs;
    • IFRS 9 - Financial Instruments”; with regard to fees included in the ‘10 per cent’ test for derecognition of financial liabilities, the amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. In particular, these include only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf;
    • IFRS 16 - Leases”; the International Accounting Standards Board amended Illustrative Example 13 accompanying “IFRS 16 - Leases”. Specifically, the amendment eliminates the potential for confusion in the application of IFRS 16 created by the way in which Illustrative Example 13 had illustrated the requirements for lease incentives. The example had included a reimbursement relating to leasehold improvements without explaining whether the reimbursement qualified as a lease incentive. The amendment removes the illustration of a reimbursement relating to leasehold improvements from the example;
    • IAS 41 - Agriculture”; the amendment removes the requirement for entities to exclude cash flows for taxation when measuring fair value. Accordingly, entities shall use pre-tax cash flows and a pre-tax rate to discount those cash flows.
  • The amendments shall be applied prospectively, subject to endorsement, for annual periods beginning on or after January 1, 2022. Early application is permitted.
  • Amendments to IFRS 9, IAS 39, IFRS 7, and IFRS 16 - Interest Rate Benchmark Reform - Phase 2”, issued in August 2020. The amendments supplement those issued in 2019 (Interest Rate Benchmark Reform - Phase 1) and address issues that could affect financial reporting after a benchmark has been reformed or replaced with an alternative benchmark rate. The objectives of the Phase 2 amendments are to assist companies: (i) in applying the IFRSs when changes occur in contractual cash flows or hedging relationships due to the reform of the benchmarks for determining interest rates; and (ii) in providing information to users of financial statements. In addition, when the Phase 1 exemptions cease to apply, companies are required to amend the documentation of hedging relationship to reflect the changes required under the IBOR reform by the end of the year in which the changes are made (such changes do not constitute the discontinuation of the hedging relationship). When the description of a hedged element in the documentation of the hedging relationship is changed, the amounts accumulated in the hedging reserve shall be considered to be based on the alternative benchmark rate on the basis of which the future hedged cash flows will be determined. The amendments will require providing additional disclosures about the entity’s exposure to the risks arising from the interest rate benchmark reform and related risk management activities. The amendments will take effect for annual periods beginning on or after January 1, 2021. Early application is permitted.
  • Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies”, issued in February 2021. The amendments are intended to support entities in deciding which accounting policies to disclose in the financial statements. The amendments to IAS 1 require companies to disclose their material accounting policy information rather than their significant accounting policies. A guide on how to apply the concept of materiality to disclosures on accounting policies is provided in the amendments to IFRS Practice Statement 2. The amendments will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2023. Early application is permitted.
  • “Amendments to IAS 8 - Definition of Accounting Estimates”, issued in February 2021. The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. The definition of changes in accounting estimates has been replaced with a definition of accounting estimates as “monetary amounts in financial statements that are subject to measurement uncertainty”. The amendments will take effect, subject to endorsement, for annual periods beginning on or after January 1, 2023. Early application is permitted.

The Group is assessing the potential impact of the future application of the new provisions.