5. Effects of new accounting standards
Revised and new IASB/IFRIC standards and interpretations that were mandatory for the first time in the financial year under review.
Standard
Content and significance
The changes in the second phase of the IBOR reform are designed to help reporting parties provide useful information in respect of the upcoming changes in connection with the IBOR reform. They supplement the provisions of the first phase and generally apply in the event that a benchmark interest rate is replaced with another benchmark rate. The EU enacted these amendments in its legislation with Commission Regulation (EU) 2021/25 dated 13 January 2021. The amendments are mandatory for financial years beginning on or after 1 January 2021. First-time application had no impact on the Consolidated Financial Statements.
Amendments to IFRS 4: Extension of the Temporary Exemption from Applying IFRS 9
This amendment to IFRS 4, which was adopted into EU law on 16 December 2020, allows insurance groups to defer the first-time application of IFRS 9 Financial Instruments by another year until the first-time application date of IFRS 17 Insurance Contracts. The exemption was granted to prevent accounting mismatches between assets and equity and liabilities in the insurers’ balance sheets. The amendments are mandatory for financial years beginning on or after 1 January 2021. First-time application had no impact on the Consolidated Financial Statements.
Amendment to IFRS 16:
Covid-19-Related Rent Concessions beyond 30 June 2021
In February 2021, the IASB issued a proposal to extend the application period for the amendment to IFRS 16 approved in May 2020 in respect of Covid-19-related rent concessions in order to provide lessees with continued relief in terms of the accounting of concessions, such as rent deferrals or rent reductions, that have been granted as a direct result of the outbreak of the coronavirus pandemic. Due to the ongoing coronavirus pandemic, the proposal is to extend the current applicability to rental payments due on or before 30 June 2022. The amendments are to be implemented in the short term and are applicable to financial years beginning on or after 1 April 2021. First-time application had no impact on the Consolidated Financial Statements.
Amendments to standards that can be applied on a voluntary basis for the financial year under review but were not adopted by HHLA: The impact on the Consolidated Financial Statements would be immaterial.
Standard
Content and significance
Amendments to
IFRS 3
IAS 16
IAS 37
Annual Improvements
2018–2020
On 14 May 2020, the IASB approved a narrow set of amendments to three standards along with the annual improvements. The resulting amendments serve to clarify the wording or correct minor consequences, errors or conflicts between the requirements in the standards. The Amendments to IFRS 3 Business Combinations update a reference within IFRS 3 to the Conceptual Framework, without changing the accounting requirements for business combinations. The Amendments to IAS 16 Property, Plant and Equipment prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing the asset to its intended location or condition (e.g. product samples). Instead, such proceeds and the related costs are to be recognised in profit or loss.
The Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets clarify which costs an entity must consider when assessing whether a contract is onerous. They also regulate the definition of the cost of fulfilling.
The Annual Improvements result in minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases.
All amendments come into force on 1 January 2022.
IFRS 17 Insurance Contracts including Amendments to IFRS 17
On 23 November 2021, the European Union published and thus adopted its regulation on the amendment to IFRS 17 Insurance Contracts including the amendments dated 25 June 2020. Accordingly, entities may exempt themselves from applying IFRS 17.22 for contracts with profit participation. IFRS 17 in its amended version and the associated amendments to various other IFRS are applicable to financial years beginning on or after 1 January 2023.
Standards and interpretations that have been passed by the IASB but not yet adopted by the EU and are not applied by HHLA. Early adoption would, however, require an EU endorsement.
Standard
Content and significance
Amendments to IAS 1
Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current
On 23 January 2020, the IASB published a narrow set of amendments to IAS 1 Presentation of Financial Statements in order to clarify how debt and other liabilities should be classified as current or non-current. The amendments clarify the existing requirements but do not change them, meaning that it is not expected that they will have a significant influence on entities’ annual financial statements. They may, however, result in reclassifications. In order to give entities time to prepare for the amendments, the IASB set 1 January 2022 as the effective date. As a response to the coronavirus pandemic, the IASB deferred the effective date by one year on 15 July 2020 in order to give entities more time to implement the classification changes. The amendments are mandatory for financial years beginning on or after 1 January 2023. Early adoption is permitted.
Amendments to IAS 1
Presentation of Financial Statements
and IFRS Practice Statement 2: Disclosure of Accounting Policies
On 12 February 2021, the IASB published the amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2. The amendments will require an entity to only present its “material” accounting policies in the Notes. In order to be “material”, the accounting policy must be connected with material transactions or other events and there must be a reason for the presentation. The guidance in Practice Statement 2 has been adapted accordingly. The amendments are mandatory for financial years beginning on or after 1 January 2023. Early adoption is permitted.
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates
The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors published by the IASB on 12 February 2021 clarifies how entitles can better distinguish between changes in accounting policies and changes in accounting estimates. It includes the definition that an accounting estimate is always related to a measurement uncertainty for a financial figure in the financial statements. The amendments are mandatory for financial years beginning on or after 1 January 2023. Early adoption is permitted.
Amendments to IAS 12 Income Taxes:
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12)
On 7 May 2021, the IASB published a narrow set of amendments to IAS 12 in response to existing uncertainties concerning how deferred taxes are accounted for with regard to leases and decommissioning obligations. The amendments mean that deferred taxes should be recognised, for example, on leases accounted for by the lessee and on decommissioning obligations. The amendments are to be applied for reporting periods beginning on or after 1 January 2023. Early adoption is permitted.
Amendments to IFRS 17 Insurance Contracts:
First-time Application of IFRS 17 and IFRS 9 – Comparative Information
On 9 December 2021, the IASB published the amendments to IFRS 17 regarding the First-time Application of IFRS 17 and IFRS 9 – Comparative Information. The marginal amendment to IFRS 17 introduces the option to apply a classification overlay approach, provided that certain conditions are met. This means that the comparative information about the financial instruments can be made more meaningful in the year prior to the first-time application of IFRS 17. The amendments are mandatory for financial years beginning on or after 1 January 2023. Early adoption is permitted.
International financial reporting standards.
International accounting standards.
International financial reporting standards.
International accounting standards.