4 Accounting standards and interpretations issued by the IASB/IFRIC and not yet endorsed by the European Commission
Regarding the description of recently issued IFRS, in addition to that indicated in the 2013 annual report, the pronouncements of the IASB not yet endorsed by the European Commission are described below.
On 6 May 2014, the IASB issued the document “Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)”, in order to clarify the accounting treatment of acquisitions of interests in joint operations representing a business.
On 12 May 2014, the IASB issued the document “Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)”, in order to clarify that a revenue-based method of depreciation and amortisation is not considered to be appropriate since it reflects only the revenue flows generated by the asset in question and not the way in which the economic benefits embodied in said asset are consumed. In compliance with the decrees provided by the IASB, the provisions contained in the aforementioned documents will take effect from financial years starting on or after 1 January 2016.
On 28 May 2014, the IASB issued the document IFRS 15 – Revenue from Contracts with Customers, which provides a single model for recognising revenue based on the transfer of control of a good or service to a customer. This new standard represents a significant change compared with the current requirements set forth by IFRS. It provides a more structured approach to measuring and recognising revenue, including a detailed application guide. In compliance with the decrees provided by the IASB, the provisions contained in IFRS 15 will take effect from financial years starting on or after 1 January 2017.
However, since they have not yet been officially endorsed by the European Commission, these measures may not take effect until a later date.
On 24 July 2014, the IASB issued the document “IFRS 9 Financial Instruments”, together with the relative Basis for Conclusions and Guide to Application, to replace all previously issued versions of the standard. The new measures: (i) stipulate the simplification of classification categories for financial instruments, and that this classification be based on the characteristics of the instrument and the company's business model; they also remove the obligation to present embedded derivatives separately; (ii) identify a new impairment model that uses forward-looking information to obtain earlier recognition of losses on receivables than the incurred loss model, which postpones recognition of losses on receivables until a loss event occurs; and (iii) introduce a substantial revision of accounting methods for hedging transactions, to ensure that hedging transactions are aligned with companies' risk management strategies and based on a largely principle-based approach.
The measures contained in the above documents, which will replace those of IAS 39 “Financial Instruments: Recognition and Measurement”, are effective for financial years starting on or after 1 January 2018. However, note that, as the measures have not yet been endorsed by the European Commission, the effective date could be deferred.