Credit Union Annual Report 2021 V2 - Flipbook - Page 45
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2021
2.3 Changes in accounting policies and disclosures (continued)
The amendments are intended to provide clarity and help ensure consistent application of the standard. Entities that
previously applied the incremental cost approach will see provisions increase to reflect the inclusion of costs related
directly to contract activities, whilst entities that previously recognized contract loss provisions using the guidance
from the former standard, IAS 11 Construction Contracts, will be required to exclude the allocation of indirect
overheads from their provisions. Judgement will be required in determining which costs are “directly related to
contract activities”, but we believe that guidance in IFRS 15 Revenue from Contracts with Customers will be
relevant.
IAS 1 Presentation of Financial Statements - Amendments to IAS 1 (effective January 1, 2023)
The IASB issued amendments to paragraphs 69 to 76 of IAS 1 Presentation of Financial Statements to specify the
requirements for classifying liabilities as current or non-current.
The amendments clarify:
•
What is meant by a right to defer settlement
•
That a right to defer must exist at the end of the reporting period
•
That classification is unaffected by the likelihood that an entity will exercise its deferral right
•
That only if an embedded derivative in a convertible liability is itself an equity instrument, would the terms of a
liability not impact its classification
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements
(the PS), in which it provides guidance and examples to help entities apply materiality judgements to accounting policy
disclosures.
The amendments aim to help entities provide accounting policy disclosures that are more useful by:
Replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose
their ‘material’ accounting policies and Adding guidance on how entities apply the concept of materiality in making
decisions about accounting policy disclosures.
Replacement of the term ‘significant’ with ‘material’ In the absence of a definition of the term ‘significant’ in IFRS, the
IASB decided to replace it with ‘material’ in the context of disclosing accounting policy information. ‘Material’ is a
defined term in IFRS and is widely understood by the users of financial statements, according to the IASB. In assessing
the materiality of accounting policy information, entities need to consider both the size of the transactions, other events
or conditions and the nature of them.
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