Amendments to IFRS 4 - Extension of the Temporary Exemption From Applying IFRS 9
Background
The amendments: Amendments to IFRS 4—Extension of the Temporary Exemption from Applying IFRS 9 were published by the IASB in June 2020.
IFRS 9 Financial Instruments addresses the accounting for financial instruments and is effective for annual reporting periods beginning on or after 1 January 2018. However, for insurers meeting the eligibility criteria*, IFRS 4 provides a temporary exemption which permits them to continue to apply IAS 39 Financial Instruments: Recognition and Measurement rather than implement IFRS 9. This temporary exemption was applicable to annual periods beginning before 1 January 2021. In June 2020 the IASB published an amendment to IFRS 4 to extend the temporary exemption from applying IFRS 9 until annual periods beginning before 1 January 2023. This amendment maintains the alignment of the effective dates of IFRS 9 and IFRS 17.
* An insurer may apply the temporary exemption from IFRS 9 if, and only if: (a) it has not previously applied any version of IFRS 9, other than only the requirements for the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss; and (b) its activities are predominantly connected with insurance (IFRS 4:20B).
What are the timelines for UK endorsement and adoption of Amendments to IFRS 4—Extension of the Temporary Exemption from Applying IFRS 9?
The UK left the EU at the end of the Transition Period on 31 December 2020.
The EU adoption of the Amendments was not effective before the end of the Transition Period.
The Secretary of State for BEIS adopted the Amendments for use by UK companies on 5 January 2021. Link to the list of UK adoptions