Each quarter, we provide a summary of newly effective and forthcoming standards as well as other accounting and financial reporting developments. This edition covers current developments as of September 30, 2019.
As the details emerge on exactly how and when the unprecedented interbank offer rate (IBOR) reforms will be implemented in various jurisdictions, addressing their impacts on financial reporting continues to be a priority for standard setters. In this quarter the International Accounting Standards Board (IASB) published Phase 1 amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures to provide limited relief to preparers for hedges impacted by IBOR reforms. The IASB also started deliberations for the matters related to Phase 2.
Currently there is diversity in practice for the accounting of deferred taxes on transactions that involve the contemporaneous recognition of an asset and a liability (e.g. right-of-use assets and lease liabilities). Proposed amendments to the application of the initial recognition exemption in IAS 12 Income Taxes issued by IASB in the third quarter aim to reaffirm the underlying principle of IAS 12, which is to reflect future tax consequences of transactions or events.
IASB also discussed its project direction for Financial Instruments with Characteristics of Equity (FICE) project and made further tentative decisions on proposed models in Dynamic risk management and Rate-regulated activities projects.
A number of new requirements are effective from January 1, 2019. Further information on the new requirements effective in 2019 are provided in the section 'Newly effective requirements in 2019'.