​Each quarter, we provide a summary of newly effective and forthcoming standards as well as other significant accounting and financial reporting developments. This edition covers current developments in the quarter ended on December 31, 2021.

All companies are facing climate-related risks and opportunities and are making strategic decisions in response – including around their transition to a low-carbon economy. Even if the climate-related risk is deemed as having minimal financial statement impact to a company today, this may change quickly as a result of regulation, strategic decisions, or shifts in climate patterns. Our Climate change financial reporting resource centre is designed to help companies to identify the potential financial statement impacts for their businesses under the existing IFRS Standards.

In this quarter, the International Accounting Standards Board (the IASB) proposed to amend IAS 1 Presentation of Financial Statements once more to clarify how companies would classify debt with covenants. These proposals would change some of the requirements introduced in its amendments to IAS 1 published in January 2020 and also defer the effective date of the 2020 amendments to IAS 1 for at least one year.

In addition, in December 2021 the IASB published an amendment to IFRS 17 Initial Application of IFRS 17 and IFRS 9 – Comparative Information. The amendment adds a new transition option to IFRS 17 Insurance Contracts to alleviate operational complexities and one-time accounting mismatches in comparative information between insurance contract liabilities and related financial assets on the initial application of IFRS 17. It also allows presentation of comparative information about financial assets to be presented in a manner that is more consistent with IFRS 9 Financial Instruments.

In this second year of the COVID-19 coronavirus pandemic, the impacts and risks for companies are likely to be changing. The COVID-19 recovery is uneven globally and is presenting a variety of challenges and risks from economic uncertainty to changes in consumer demand, disrupted supply chains and staff shortages, rising input costs, new hybrid working patterns, the ending of government support packages, and increased merger and acquisitions activity. Our Covid-19 financial reporting resource centre provides regularly updated information on potential accounting and disclosure implications for companies. Our COVID-19 supplement to our Illustrative disclosures provides disclosure examples related to accounting issues arising from the COVID-19 coronavirus pandemic.

A number of new requirements are effective from January 1, 2021. Further information on these new requirements is provided in the section ‘Requirements effective in 2021’.