Pfrs Update 2022

PFRS
UPDATE 2021
DIAZ MURILLO DALUPAN AND COMPANY
"THE GREATEST GLORY IN LIVING LIES NOT IN
NEVER FALLING, BUT IN RISING EVERY TIME WE
FALL."
- Nelson Mandela
New amendments issued at January 1,2021
• Classification of liabilities as current and non-current (effective date January
1, 2023), Amendment to IAS 1
• Annual improvements to PFRS standards 2018-2020 (effective immediately)

Amendment PFRS 16
• Annual improvements to PFRS standards 2018-2020 (effective January 1,

2022) Amendment PFRS 1,PFRS 9 & IAS 41
• Covid 19 Related Rent Concessions (effective June 1, 2020), Amendment to

PFRS 16
• Reference to the Conceptual Framework (effective January 1, 2022),
Amendment to PFRS 3
• Onerous Contracts – Cost of Fulfilling a Contract (effective January 1, 2022)

Amendment IAS 37
• Property, Plant and Equipment: Proceeds before intended use (effective

January 1, 2022) Amendment IAS 16
• Extension of Temporary Exemption from Applying PFRS 9 (effective June 25,

2022), Amendment PFRS 4
• Classification of liabilities as Current or Non-current – deferral of effective
date (effective January 1, 2023), Amendment to IAS 1
• Interest Rate Benchmark Reform (effective January 1, 2021) Amendment

IAS 37
• Property, Plant and Equipment: Proceeds before intended use (effective January 1,
2021) Amendments to PFRS 4, PFRS 7,PFRS 9, PFRS 16 and IAS 39
Classification of Liabilities as Current and Non-current and
Classification of Liabilities as Current and Non-current—
Deferral of Effective Date
Classification of Liabilities as Current or Non-current clarifies a criterion in

IAS 1 for classifying a liability as non-current: the requirement for an entity
to have the right to defer settlement of the liability for at least 12 months
after the reporting period.
Classification of Liabilities as Current or Non-current—Deferral of Effective

Date was issued in July 2020 and deferred the mandatory effective date of
amendments to IAS 1 Classification of Liabilities as Current or Non-current
to annual reporting periods beginning on or after 1 January 2023.
Annual Improvements to PFRS Standards 2018-2020
PFRS 1 Subsidiary as a First-time Adopter

PFRS 9 Fees in the ‘10 per cent’ Test for Derecognition of
Financial Liabilities Illustrative Examples accompanying
PFRS 16 Lease Incentives

IAS 41 Taxation in Fair Value Measurements
PFRS 1 Subsidiary as a First-time Adopter

A subsidiary applies PFRS at a later date than its parent
Measurement at the date of the parents transition
Measurement at the date of the subsidiary’s adoption of PFRS
PFRS 9 Fees in the ‘10 per cent’ Test for Derecognition of

Financial Liabilities Illustrative Examples accompanying
PFRS 9 requires an entity to derecognize the original liability

and recognize a new one when there is
A. an exchange between an existing borrower and lender of debt

instrument with substantially different terms
B. a substantial modification of the terms of an existing financial
liability or part of it
Substantial modification occurs if the present value of the cash flows under the
new terms using the original effective rate is at least 10% different from the
present value of the remaining cash flow from the original debt
Fees related to the modification shall be included in the 10%

test.
PFRS 16 Lease Incentives (example reimbursement related to

lease hold improvements deleted)
PAS 41 Taxation in Fair Value Measurements ( remove the
requirement to exclude taxation when measuring fair value)
Covid-19-Related Rent Concessions
 Which amends PFRS 16, is effective from 1 June 2020 with

earlier application permitted.
 The amendment permits lessees, as a practical expedient,

not to assess whether rent concessions that occur as a direct
consequence of the covid-19 pandemic and meet specified
conditions are lease modifications and, instead, to account for
those rent concessions as if they were not lease modifications.
Covid-19-Related Rent Concessions
 Applies only to rent concession related to Covid-19.
 Result in revised consideration for the lease that is substantially the same as,
or less than, the consideration for the lease immediately preceding the change.
 Reduce only lease payments originally due on or before 30 June 2021
 Introduce no substantive change to other terms and conditions of the
lease, considering both qualitative and quantitative factors.
 Approach 1: debit lease liability and credit other income

 Approach 2: debit lease liability and credit right-of-use asset
Reference to the Conceptual Framework
• Updated paragraph 11 of PFRS 3 to refer to the 2018

Conceptual Framework
• Prospective application
• Allows application before effective date without disclosure

Onerous Contracts—Cost of Fulfilling a Contract
• The amendments clarify that for the purpose of assessing

whether a contract is onerous, the cost of fulfilling the contract
includes both the incremental costs of fulfilling that contract
and an allocation of other costs that relate directly to fulfilling
contracts.
Property, Plant and Equipment: Proceeds before Intended
Use
 Property, Plant and Equipment: Proceeds before Intended Use

amends IAS 16.
 The amendments prohibit an entity from deducting from the
cost of property, plant and equipment amounts received from
selling items produced while the entity is preparing the asset
for its intended use. Instead, an entity will recognize such sales
proceeds and related cost in profit or loss.
Amendments to PFRS 17
 The objective of the amendments is to assist entities

implementing the Standard, while not unduly disrupting
implementation or diminishing the usefulness of the
information provided by applying PFRS 17.
 PFRS 17, as amended in June 2020, is effective for annual

reporting periods beginning on or after 1 January 2023.
Amendments to PFRS 17
 Amended the definition of a liability for remaining coverage to include amounts for
which an entity will provide investment-return service or investment-related service
 Amended the definition of an investment component to clarify that an investment component

is the amounts that an insurance contract requires the entity to repay to a policyholder in all
circumstances, regardless of whether an insured event occurs
 Clarify that changes caused by cash flows from loans to policyholders do not give rise to
insurance revenue. This treatment is similar to the treatment of investment components.
Interest Rate Benchmark Reform—Phase 2
 Interest Rate Benchmark Reform—Phase 2 (Phase 2

amendments) was issued in August 2020 and amends PFRS 9,
IAS 39, PFRS 7, PFRS 4 and PFRS 16.
 The Phase 2 amendments address issues that might affect
financial reporting during the reform of an interest rate
benchmark, including the effects of changes to contractual cash
flows or hedging relationships arising from the replacement of an
interest rate benchmark with an alternative benchmark rate.
Interest Rate Benchmark Reform—Phase 2
 The objectives of the Phase 2 amendments are to:

 support companies in applying PFRS Standards when
changes are made to contractual cash flows or hedging
relationships because of the reform; and
 assist companies in providing useful information to users

of financial statements.
"TELL ME AND I FORGET. TEACH ME AND I
REMEMBER. INVOLVE ME AND I LEARN."
- Benjamin franklin
THANK YOU AND HAVE A NICE DAY
EVERYONE

Pfrs Update 2022

Uploaded by

Copyright:

Available Formats

Pfrs Update 2022

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pfrs Update 2022

Uploaded by

Copyright:

Available Formats

PFRS

• Annual improvements to PFRS standards 2018-2020 (effective immediately)

• Annual improvements to PFRS standards 2018-2020 (effective January 1,

• Covid 19 Related Rent Concessions (effective June 1, 2020), Amendment to

• Onerous Contracts – Cost of Fulfilling a Contract (effective January 1, 2022)

• Property, Plant and Equipment: Proceeds before intended use (effective

• Extension of Temporary Exemption from Applying PFRS 9 (effective June 25,

• Interest Rate Benchmark Reform (effective January 1, 2021) Amendment

Classification of Liabilities as Current or Non-current clarifies a criterion in

Classification of Liabilities as Current or Non-current—Deferral of Effective

PFRS 1 Subsidiary as a First-time Adopter

PFRS 16 Lease Incentives

PFRS 1 Subsidiary as a First-time Adopter

PFRS 9 Fees in the ‘10 per cent’ Test for Derecognition of

PFRS 9 requires an entity to derecognize the original liability

A. an exchange between an existing borrower and lender of debt

Fees related to the modification shall be included in the 10%

PFRS 16 Lease Incentives (example reimbursement related to

 Which amends PFRS 16, is effective from 1 June 2020 with

 The amendment permits lessees, as a practical expedient,

 Applies only to rent concession related to Covid-19.

 Approach 1: debit lease liability and credit other income

• Updated paragraph 11 of PFRS 3 to refer to the 2018

• Allows application before effective date without disclosure

• The amendments clarify that for the purpose of assessing

 Property, Plant and Equipment: Proceeds before Intended Use

 The objective of the amendments is to assist entities

 PFRS 17, as amended in June 2020, is effective for annual

 Amended the definition of an investment component to clarify that an investment component

 Interest Rate Benchmark Reform—Phase 2 (Phase 2

 The objectives of the Phase 2 amendments are to:

 assist companies in providing useful information to users

You might also like