The International Financial Reporting Interpretations Committee (IFRIC) issued in November 2009 IFRIC Interpretation 19 “Extinguishing Financial Liabilities with Equity Instruments” (IFRIC 19). IFRIC 19 addresses the accounting by an entity that renegotiates the terms of a financial liability with its creditor and the creditor agrees to accept the entity’s shares or other equity instruments to settle the financial liability fully or partially. These transactions are sometimes referred to as debt- for-equity swaps.
In June 2009, the International Accounting Standards Board (IASB) issued Amendments to IFRS 2 “Share-based Payment”.
The amendments, entitled “Group Cash-settled Share-based Payment Transactions”, clarify the scope of IFRS 2 and its interactions with other standards.
The Improvements to HKFRSs 2009 (issued in May 2009) included amendments to HKAS 17 “Leases”, which deleted paragraphs 14 and 15 and inserted a new paragraph 15A. The HKICPA released on 16 November 2009 a Q&A on how these amendments may affect the classification of interests in leasehold land situated in Hong Kong.
The International Accounting Standards Board (IASB) issued on 12 November 2009 IFRS 9 Financial Instruments. This new IFRS marks the completion of the first phase of a three-phase project to replace IAS 39 Financial Instruments: Recognition and Measurement.
The IASB has issued IAS 24 (Revised) "Related Party Disclosures" in November 2009.
IAS 24 (Revised) requires an entity to disclose:
(a) transactions with its related parties; and
(b) relationships between parents and subsidiaries irrespective of whether there have been transactions between those related parties.
IAS 24 (Revised):
(a) simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition.
(b) provides a partial exemption from the disclosure requirements for government-related entities.
(c) shall be applied retrospectively for annual reporting periods beginning on or after 1 January 2011. Earlier application is permitted.
The IASB has issued an amendment to IAS 32 entitled "Classification of rights issues" in October 2009.
According to the amendment in IAS 32.11, rights, options or warrants to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments.
Previously the above would have failed the “fixed-for-fixed” criterion and would result in the rights, options or warrants to be classified as a derivative financial liability.
The amendment is to be applied for annual reporting periods beginning on or after 1 February 2010. Earlier application is permitted.
