{"id":2769,"date":"2026-02-09T12:15:32","date_gmt":"2026-02-09T04:15:32","guid":{"rendered":"https:\/\/ehluar.com\/main\/?p=2769"},"modified":"2026-03-30T12:26:43","modified_gmt":"2026-03-30T04:26:43","slug":"ifrs-annual-update-2026-key-amendments-and-future-developments","status":"publish","type":"post","link":"http:\/\/ehluar.com\/main\/2026\/02\/09\/ifrs-annual-update-2026-key-amendments-and-future-developments\/","title":{"rendered":"IFRS Annual Update 2026: Key Amendments and Future Developments"},"content":{"rendered":"
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The past two years have seen significant activity from the International Accounting Standards Board (IASB), with a range of amendments becoming effective and new standards issued that will reshape financial reporting in the coming years.<\/p>\n

This note summarises the key changes that entities need to be aware of, covering effective dates from 1 January 2024 through to 2027.<\/p>\n

1. The Standard-Setting Process: Agenda Decisions<\/h4>\n

Before delving into the amendments, it is helpful to understand how the IASB identifies areas for change. The IFRS Interpretations Committee (IFRS IC) receives queries on applying IFRS standards. The Committee follows a decision tree to determine the appropriate response:<\/p>\n

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  • \n

    If a query relates to a widespread issue with material effects, it may lead to a narrow-scope amendment, a new IFRIC interpretation, or a new standard.<\/p>\n<\/li>\n

  • \n

    If the issue is not widespread, it is resolved through a one-off Agenda Decision, published in compilations.<\/p>\n<\/li>\n<\/ul>\n

    Recent compilations (Volumes 11 and 12) addressed topics such as disclosure of revenues and expenses for reportable segments (IFRS 8), recognition of revenue from tuition fees (IFRS 15), and classification of variation margin calls (IAS 7). For ongoing projects, the IASB\u2019s work plan includes research on pollutant pricing mechanisms and financial instruments with characteristics of equity, which are areas to monitor for future developments.<\/p>\n

    2. Overview of Recent and Upcoming Amendments<\/h4>\n

    The table below summarises the key amendments and new standards, grouped by their effective dates.<\/p>\n

    \n\n\n\n\n\n\n\n\n\n\n\n\n\n
    Effective Date<\/th>\nStandard(s)<\/th>\nNature of Amendment<\/th>\n<\/tr>\n<\/thead>\n
    1 January 2024<\/strong><\/td>\nIFRS S1 & S2<\/td>\nNew sustainability and climate-related disclosure standards.<\/td>\n<\/tr>\n
    <\/td>\nIAS 1<\/td>\nAmendments on classification of liabilities as current\/non-current.<\/td>\n<\/tr>\n
    <\/td>\nIFRS 16<\/td>\nAmendment on sale and leaseback transactions.<\/td>\n<\/tr>\n
    <\/td>\nIAS 7 & IFRS 7<\/td>\nNew disclosure requirements for supplier finance arrangements.<\/td>\n<\/tr>\n
    1 January 2025<\/strong><\/td>\nIAS 21<\/td>\nNew guidance on determining exchangeability and estimating spot rates when a currency is not exchangeable.<\/td>\n<\/tr>\n
    1 January 2026<\/strong><\/td>\nIFRS 9 & IFRS 7<\/td>\nAmendments on classification and measurement of financial instruments (SPPI) and contracts referencing nature-dependent electricity.<\/td>\n<\/tr>\n
    <\/td>\nAnnual Improvements (Vol. 11)<\/td>\nMinor clarifications to IFRS 1, IFRS 7, IFRS 9, IFRS 10, and IAS 7.<\/td>\n<\/tr>\n
    1 January 2027<\/strong><\/td>\nIFRS 18<\/td>\nNew standard replacing IAS 1, introducing new subtotals and categories in the statement of profit or loss.<\/td>\n<\/tr>\n
    <\/td>\nIFRS 19<\/td>\nNew standard permitting eligible subsidiaries to apply reduced disclosure requirements.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

    3. Detailed Analysis of Key Amendments<\/h4>\n

    3.1 Sustainability Disclosures: IFRS S1 and IFRS S2<\/strong><\/p>\n

    IFRS S1 establishes general requirements for disclosing sustainability-related risks and opportunities that could affect an entity\u2019s cash flows, access to capital, or cost of capital. IFRS S2 focuses specifically on climate-related risks and opportunities. Both standards require disclosures across four core areas: governance, strategy, risk management, and metrics and targets.<\/p>\n

    While these standards are not yet mandatory in South Africa, they are expected to gain prominence. The JSE has issued guidance aligned with these standards, and the FSCA has signalled its intention to incorporate similar principles for financial institutions. Entities within multinational groups may also be required to apply these standards if their parent is in a jurisdiction where they are mandatory.<\/p>\n

    3.2 IAS 1: Classification of Liabilities<\/strong><\/p>\n

    Two amendments to IAS 1 clarify the classification of liabilities.<\/p>\n

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    • \n

      Classification as Current or Non-current:<\/strong> The amendments emphasise that an entity\u2019s right to defer settlement must exist at the end of the reporting period<\/strong>. This reinforces that management\u2019s intentions or post-reporting period events do not affect classification.<\/p>\n<\/li>\n

    • \n

      Non-current Liabilities with Covenants:<\/strong> When a liability is classified as non-current but its deferral right is subject to covenants that must be met within 12 months, the entity must now provide enhanced disclosures. These include information about the covenants and any facts indicating potential difficulty in complying.<\/p>\n<\/li>\n<\/ul>\n

      3.3 IAS 7 and IFRS 7: Supplier Finance Arrangements<\/strong><\/p>\n

      These amendments introduce new disclosure requirements for supplier finance arrangements (often called reverse factoring). The objective is to enable users to understand the effects of these arrangements on an entity\u2019s liabilities, cash flows, and liquidity risk.<\/p>\n

      Disclosures must include the terms and conditions of the arrangements, carrying amounts of liabilities that are part of them, and a range of payment due dates for those liabilities compared to similar trade payables.<\/p>\n

      3.4 IAS 21: Lack of Exchangeability<\/strong><\/p>\n

      Effective 1 January 2025, this amendment provides a framework for determining whether a currency is exchangeable into another. A currency is exchangeable if it can be exchanged at a known rate within a normal administrative delay.<\/p>\n

      If a currency is not exchangeable, the entity must estimate the spot exchange rate that would apply in an orderly transaction. The standard provides detailed application guidance, including a decision tree. Entities must also disclose the fact that a rate was estimated, the method used, and other key information.<\/p>\n

      3.5 IFRS 9 and IFRS 7: Financial Instruments<\/strong><\/p>\n

      Two significant sets of amendments to IFRS 9 and IFRS 7 are effective from 1 January 2026.<\/p>\n

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      • \n

        Classification and Measurement (SPPI):<\/strong> The amendments clarify the assessment of contractual cash flows that are \u2018solely payments of principal and interest\u2019 (SPPI). Key clarifications include:<\/p>\n

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        • \n

          Contingent Features:<\/strong> For features that change cash flows based on a contingent event (e.g., a carbon emissions target), the instrument will only meet the SPPI condition if the contractual cash flows in all possible scenarios are not significantly different from an instrument without that feature.<\/p>\n<\/li>\n

        • \n

          Non-recourse Assets:<\/strong> For \u2018non-recourse\u2019 financial assets where the claim is limited to specific assets, the entity must \u2018look through\u2019 to the underlying assets to determine if the cash flows are SPPI. If they are based on the performance of a pool of assets (e.g., a toll road), the SPPI test is failed.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

        • \n

          Contracts Referencing Nature-dependent Electricity:<\/strong> This amendment addresses contracts for electricity generated from sources dependent on nature (e.g., wind, solar). For such a contract to be considered \u2018held for own use\u2019 (and thus out of the scope of IFRS 9), the entity must be, and expect to be, a net purchaser of electricity<\/strong> over the contract period, assessed over a reasonable time not exceeding 12 months.<\/p>\n<\/li>\n<\/ul>\n

          3.6 IFRS 18: Presentation and Disclosure in Financial Statements<\/strong><\/p>\n

          Effective 1 January 2027, IFRS 18 will replace IAS 1 and represents a major overhaul of financial statement presentation. Key changes include:<\/p>\n

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          • \n

            New Subtotals:<\/strong> Entities must present three new subtotals in the statement of profit or loss: Operating profit<\/strong>, Profit before financing and income taxes<\/strong>, and Profit before income taxes<\/strong>.<\/p>\n<\/li>\n

          • \n

            Categorisation:<\/strong> Income and expenses must be classified into five categories: Operating, Investing, Financing, Income taxes, and Discontinued operations.<\/p>\n<\/li>\n

          • \n

            Management-defined Performance Measures (MPMs):<\/strong> Any \u2018non-GAAP\u2019 measures used in public communications must be disclosed and reconciled to the most directly comparable IFRS subtotal.<\/p>\n<\/li>\n<\/ul>\n

            Consequential amendments to IAS 8 will apply when IFRS 18 is adopted.<\/p>\n

            3.7 IFRS 19: Subsidiaries without Public Accountability<\/strong><\/p>\n

            Also effective 1 January 2027, IFRS 19 permits eligible subsidiaries to apply reduced disclosure requirements while still using the recognition, measurement, and presentation requirements of other IFRS standards. This is designed to significantly reduce the disclosure burden for qualifying subsidiaries.<\/p>\n

            3.8 Annual Improvements (Volume 11)<\/strong><\/p>\n

            Effective 1 January 2026, these minor clarifications address inconsistencies across several standards:<\/p>\n

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            • \n

              IFRS 1:<\/strong> Amends the wording on hedge accounting for first-time adopters to align with the qualifying criteria in IFRS 9.<\/p>\n<\/li>\n

            • \n

              IFRS 7:<\/strong> Removes obsolete references and corrects inconsistencies in the implementation guidance.<\/p>\n<\/li>\n

            • \n

              IFRS 9:<\/strong> Clarifies the scope for derecognition of lease liabilities by explicitly referencing the correct paragraph (3.3.3). It also clarifies the definition of \u2018transaction price\u2019 to avoid confusion with the term used in IFRS 15.<\/p>\n<\/li>\n

            • \n

              IFRS 10:<\/strong> Aligns the language in paragraphs B73 and B74 regarding the determination of a \u2018de facto agent\u2019.<\/p>\n<\/li>\n

            • \n

              IAS 7:<\/strong> Removes the reference to the \u2018cost method\u2019, which is no longer defined in IFRS.<\/p>\n<\/li>\n<\/ul>\n

              4. Impact on Entities<\/h4>\n

              The impact of these amendments varies by entity type and transaction profile:<\/p>\n

                \n
              • \n

                IFRS S1 & S2:<\/strong> JSE-listed entities, banks, and multinational groups.<\/p>\n<\/li>\n

              • \n

                IAS 1:<\/strong> All entities with liabilities, especially those subject to loan covenants.<\/p>\n<\/li>\n

              • \n

                IAS 7 & IFRS 7:<\/strong> Entities using supplier finance arrangements (e.g., retail, manufacturing).<\/p>\n<\/li>\n

              • \n

                IAS 21:<\/strong> Entities operating in jurisdictions with exchange restrictions.<\/p>\n<\/li>\n

              • \n

                IFRS 9 Amendments:<\/strong> Entities holding complex financial instruments, non-recourse debt, or renewable energy PPAs.<\/p>\n<\/li>\n

              • \n

                IFRS 18:<\/strong> All entities<\/strong> preparing IFRS financial statements.<\/p>\n<\/li>\n

              • \n

                IFRS 19:<\/strong> Eligible subsidiaries seeking to reduce disclosure requirements.<\/p>\n<\/li>\n<\/ul>\n

                5. Disclosure Requirements (IAS 8)<\/h4>\n

                Finally, entities are reminded of the requirements under IAS 8<\/strong> for new standards issued but not yet effective. Paragraphs 30 and 31 mandate that an entity must disclose:<\/p>\n

                  \n
                • \n

                  the fact that a new standard has been issued but is not yet effective;<\/p>\n<\/li>\n

                • \n

                  known or reasonably estimable information about the possible impact of initial application; or<\/p>\n<\/li>\n

                • \n

                  a statement that the impact is not known or reasonably estimable.<\/p>\n<\/li>\n<\/ul>\n

                  As entities prepare financial statements for 2025 year-ends, careful consideration should be given to these forward-looking disclosures, particularly for standards effective in 2026 and 2027.<\/p>\n

                  This technical news is provided for informational purposes only and does not constitute professional advice. Entities should consult their professional advisors for guidance on their specific circumstances.<\/em>Source:<\/strong> IFRS, 9 February 2026<\/em><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

                  The past two years have seen significant activity from the International Accounting Standards Board (IASB), with a range of amendments becoming effective and new standards issued that will reshape financial reporting in the coming years. This note summarises the key changes that entities need to be aware of, covering effective dates from 1 January 2024 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,6],"tags":[],"class_list":["post-2769","post","type-post","status-publish","format-standard","hentry","category-accounting","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=2769"}],"version-history":[{"count":1,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2769\/revisions"}],"predecessor-version":[{"id":2770,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2769\/revisions\/2770"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=2769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=2769"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=2769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}