Amendments to IAS 37
B7. IAS 37 Provisions, Contingent Liabilities and Contingent Assets is amended as described below.
Paragraphs 1 and 2 are amended to read as follows:
1. This Standard shall be applied by all entities in accounting for provisions, contingent liabilities and contingent assets, except:
(a) those resulting from executory contracts, except where the contract is onerous;
(b) those arising in insurance entities from contracts with policyholders; and
(c) those covered by another Standard.
2. This Standard does not apply to financial instruments (including guarantees) that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement. For financial guarantees excluded from the scope of IAS 39, this Standard applies as set out in paragraph 2(f) of IAS 39.
Example 9 is amended to read as follows:
Example 9: A Single Guarantee
On 31 December 1999, Entity A gives a guarantee of certain borrowings of Entity B, whose financial condition at that time is sound. During 2000, the financial condition of Entity B deteriorates and at 30 June 2000 Entity B files for protection from its creditors.
(a) At 31 December 1999
Present obligation as a result of a past obligating event - The obligating event is the giving of the guarantee, which gives rise to a legal obligation.
An outflow of resources embodying economic benefits in settlement - No outflow of benefits is probable at 31 December 1999.
Conclusion - The guarantee is recognised at fair value (see paragraph 2(f) of IAS 39).

B26. (d) IAS 3239* indicates that if an active market exists, the fair value of a financial instrument is based on a quoted market price. ...
* The IASB's project to revise IAS 32 and IAS 39 in 2003 resulted in the relocation of the requirements on fair value measurement from IAS 32 to IAS 39.
B32. Although the Board decided to reject fair value for measuring the recoverable amount of the assets covered by IAS 36, the Board has not yet concluded whether fair value is an appropriate basis to measure the recoverable amount of other assets, such as financial assets for which an active market exists.*
* IAS 39 Financial Instruments: Recognition and Measurement requires fair value measurement of certain financial assets. This paragraph has been struck through to avoid any confusion.

49. When loans and advances cannot be recovered, they are written off and charged against any allowance account for impairment losses. In some cases, they are not written off until all the necessary legal procedures have been completed and the amount of the impairment loss is finally determined. In other cases, they are written off earlier, for example when the borrower has not paid any interest or repaid any principal that was due in a specified period. As the time at which uncollectible loans and advances are written off differs, the gross amount of loans and advances and of the allowance account for impairment losses may vary considerably in similar circumstances. As a result, a bank discloses its policy for writing off uncollectibleloans and advances.
In paragraph 58, subparagraph (c) is amended to read as follows:
(c) the amount of the expense recognised in the period for impairment losses on loans and advances and the amount of any allowance account at the balance sheet date; and

Amendments to IAS 36
B6. IAS 36 Impairment of Assets is amended as described below:
Standard
Paragraph 1 is amended to read as follows:
1. This Standard shall be applied in accounting for the impairment of all assets, other than:
...
(e) financial assets that are included in the scope of IAS 39Financial Instruments: Recognition and Measurement;
Basis for Conclusions
In IASC's Basis for Conclusions on IAS 36, paragraphs B18, B26(d) and B32 should be read as follows:
[The original text has been marked up to reflect the revision of IAS 39 in 2003; new text is underlined and deleted text is struck through.]
B18. The IASC Financial Instruments project is underway. Impairment requirements for financial instruments will be dealt with in that project. IAS 39, Financial Instruments: Recognition and Measurement, sets out the requirements for impairment of financial assets.

46. Local circumstances or legislation may require or allow a bank to set aside amounts for impairment losses on loans and advances in addition to those losses that have been recognised under IAS 39. Any such amounts set aside represent appropriations of retained earnings and not expenses in determining profit or loss. Similarly, any credits resulting from the reduction of such amounts result in an increase in retained earnings and are not included in the determination of profit or loss.
Paragraph 47 is amended to read as follows:
47. Users of the financial statements of a bank need to know the impact that impairment losses on loans and advances have had on the financial position and performance of the bank; this helps them judge the effectiveness with which the bank has employed its resources. Therefore a bank discloses the aggregate amount of any allowance account for impairment losses on loans and advances at the balance sheet date and the movements in the allowance account during the period. The movements in the allowance account, including the amounts previously written off that have been recovered during the reporting period, are shown separately.
Paragraph 48 is deleted.
Paragraph 49 is amended to read as follows:

43. A bank shall disclose the following:
(a) the accounting policy that describes the basis on which uncollectible loans and advances are recognised as an expense and written off.
(b) details of the movements in any allowance account for impairment losses on loans and advances during the period. It shall disclose separately the amount recognised as an expense in the period for impairment losses on uncollectible loans and advances, the amount charged in the period for loans and advances written off and the amount credited in the period for loans and advances previously written off that have been recovered.
(c) the aggregate amount of any allowance account for impairment losses on loans and advances at the balance sheet date.
44. Any amounts set aside in respect of losses on loans and advances in addition to impairment losses recognised under IAS 39 on loans and advances shall be accounted for as appropriations of retained earnings. Any credits resulting from the reduction of such amounts result in an increase in retained earnings and are not included in the determination of profit or loss for the period.
Paragraph 45 is deleted.
Paragraph 46 is amended to read as follows:

13. Income and expense items shall not be offset except for those relating to hedges and to assets and liabilities that have been offset in accordance with IAS 32.
Paragraph 14 is amended to read as follows:
14. Offsetting in cases other than those relating to hedges and to assets and liabilities that have been offset as described in IAS 32 prevents users from assessing the performance of the separate activities of a bank and the return that it obtains on particular classes of assets.
Paragraph 23 is deleted.
Paragraphs 24 and 25 are amended to read as follows:
24. A bank shall disclose the fair values of each class of its financial assets and liabilities as required by IAS 32 Financial Instruments: Disclosure and Presentation.
25. IAS 39 provides for four classifications of financial assets: loans and receivables, held-to-maturity investments, financial assets at fair value through profit or loss, and available-for-sale financial assets. A bank shall disclose the fair values of its financial assets for these four classifications, as a minimum.
In paragraph 26, subparagraphs (b)(iv) and (v) are deleted.
In paragraph 28 the last sentence is deleted.
Paragraphs 43 and 44 are amended to read as follows:

10. In addition to the requirements of other Standards, the disclosures in the income statement or the notes to the financial statements shall include, but are not limited to, the following items of income and expenses:
Interest and similar income;
Interest expense and similar charges;
Dividend income;
Fee and commission income;
Fee and commission expense;
Gains less losses arising from dealing securities;
Gains less losses arising from investment securities;
Gains less losses arising from dealing in foreign currencies;
Other operating income;
Impairment losses on loans and advances;
General administrative expenses; and
Other operating expenses.
Paragraph 13 is amended to read as follows:

Amendments to IAS 30
B5. IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions is amended as described below.
Paragraph 8 is amended to read as follows:
8. Banks use differing methods for the recognition and measurement of items in their financial statements. While harmonisation of these methods is desirable, it is beyond the scope of this Standard. In order to comply with IAS 1 Presentation of Financial Statements and thereby enable users to understand the basis on which the financial statements of a bank are prepared, accounting policies dealing with the following items may need to be disclosed:
..
(d) the basis for the determination of impairment losses on loans and advances and for writing off uncollectible loans and advances (see paragraphs 43-49); and
..
Paragraph 10 is amended to read as follows:

Amendments to IAS 19
B4. In IASC's Basis for Conclusions on IAS 19 Employee Benefits paragraphs 68D(b) and 75A should be read as follows:
[The original text has been marked up to reflect the revision of IAS 39 in 2003; new text is underlined and deleted text is struck through.]
Paragraph 68D(b) of the Basis for Conclusions is amended to read as follows:
68D. (b) if offsetting is allowed when condition (c) is not met, this would seem to be equivalent to permitting a net presentation for 'in-substance defeasance' and other analogous cases where IAS 32 indicates explicitly that offsetting is inappropriate. The Board has rejected 'in-substance defeasance' for financial instruments (see IAS 39 Application Guidance, paragraph AG59) and there is no obvious reason to permit it in accounting for defined benefit plans. In these cases the enterprise retains an obligation that should be recognised as a liability and the enterprise's right to reimbursement from the plan is a source of economic benefits that should be recognised as an asset. Offsetting would be permitted if the conditions in paragraph 3342 of IAS 32 are satisfied;
75A. Paragraph 41 of IAS 19 states that an enterprise entity recognises its rights under an insurance policy as an asset if the policy is held by the enterprise entity itself. IAS 19 (revised 1998) did not address the measurement of these insurance policies. The enterprise's entity's rights under the insurance policy might be regarded as a financial asset. However, rights and obligations arising under insurance contracts are excluded from the scope of IAS 39, Financial Instruments: Recognition and Measurement. Also, IAS 39 does not apply to "employers' assets and liabilities rights and obligations under employee benefit plans, to which IAS 19, Employee Benefits, applies". Paragraphs 39-42 of IAS 19 discuss insured benefits in distinguishing defined contribution plans and defined benefit plans, but this discussion does not deal with measurement.

(c) Fees that are earned on the execution of a significant act.
The fees are recognised as revenue when the significant act has been completed, as in the examples below.
(i) Commission on the allotment of shares to a client.
The commission is recognised as revenue when the shares have been allotted.
(ii) Placement fees for arranging a loan between a borrower and an investor.
The fee is recognised as revenue when the loan has been arranged.
(iii) Loan syndication fees.
A syndication fee received by an entity that arranges a loan and retains no part of the loan package for itself (or retains a part at the same effective interest rate for comparable risk as other participants) is compensation for the service of syndication. Such a fee is recognised as revenue when the syndication has been completed.