Amendments to IAS 12
B2. IAS 12 Income Taxes is amended as described below.
The first sentence of paragraph 20 is amended to read as follows:
20. IFRSs permit or require certain assets to be carried at fair value or to be revalued (see, for example, IAS 16 Property, Plant and Equipment, IAS 38 Intangible Assets, IAS 39 Financial Instruments: Recognition and Measurement and IAS 40 Investment Property).
Example 9 of Appendix A is amended to read as follows:
9. The liability component of a compound financial instrument (for example a convertible bond) is measured at a discount to the amount repayable on maturity (see IAS 32 Financial Instruments: Disclosure and Presentation). The discount is not deductible in determining taxable profit (tax loss).

Amendments to IAS 18
B3. IAS 18 Revenue is amended as described below.
Paragraph 30 is amended as follows:
30. Revenue shall be recognised on the following bases:
(a) interest shall be recognised using the effectiveinterest method as set out in IAS 39, paragraphs 9 and AG5-AG8;
(b) royalties shall be recognised on an accrual basis in accordance with the substance of the relevant agreement; and
(c) dividends shall be recognised when the shareholder's right to receive payment is established.
Paragraph 31 is deleted.
Example 5 of the Appendix is amended to read as follows:
5. Sale and repurchase agreements (other than swap transactions) under which the seller concurrently agrees to repurchase the same goods at a later date, or when the seller has a call option to repurchase, or the buyer has a put option to require the repurchase, by the seller, of the goods.
For a sale and repurchase agreement on an asset other than a financial asset, the terms of the agreement need to be analysed to ascertain whether, in substance, the seller has transferred the risks and rewards of ownership to the buyer and hence revenue is recognised. When the seller has retained the risks and rewards of ownership, even though legal title has been transferred, the transaction is a financing arrangement and does not give rise to revenue. For a sale and repurchase agreement on a financial asset, IAS 39 Financial Instruments: Recognition and Measurement applies.
Example 8 of the Appendix is amended to read as follows:

8. Instalment sales, under which the consideration is receivable in instalments.
Revenue attributable to the sale price, exclusive of interest, is recognised at the date of sale. The sale price is the present value of the consideration, determined by discounting the instalments receivable at the imputed rate of interest. The interest element is recognised as revenue as it is earned, using the effective interest method.
Example 14 of the Appendix is amended to read as follows:
14. Financial service fees.
The recognition of revenue for financial service fees depends on the purposes for which the fees are assessed and the basis of accounting for any associated financial instrument. The description of fees for financial services may not be indicative of the nature and substance of the services provided. Therefore, it is necessary to distinguish between fees that are an integral part of the effective interest rate of a financial instrument, fees that are earned as services are provided, and fees that are earned on the execution of a significant act.
(a) Fees that are an integral part of the effective interest rate of a financial instrument.
Such fees are generally treated as an adjustment to the effective interest rate. However, when the financial instrument is measured at fair value with the change in fair value recognised in profit or loss the fees are recognised as revenue when the instrument is initially recognised.
(i) Origination fees received by the entity relating to the creation or acquisition of a financial asset other than one that under IAS 39 is classified as a financial asset at fair value through profit or loss.
Such fees may include compensation for activities such as evaluating the borrower's financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating the terms of the instrument, preparing and processing documents and closing the transaction. These fees are an integral part of generating an involvement with the resulting financial instrument and, together with the related direct costs, are deferred and recognised as an adjustment to the effective interest rate.
(ii) Commitment fees received by the entity to originate a loan when the loan commitment is outside the scope of IAS 39.
If it is probable that the entity will enter into a specific lending arrangement and the loan commitment is not within the scope of IAS 39, the commitment fee received is regarded as compensation for an ongoing involvement with the acquisition of a financial instrument and, together with the related direct costs, is deferred and recognised as an adjustment to the effective interest rate. If the commitment expires without the entity making the loan, the fee is recognised as revenue on expiry. Loan commitments that are within the scope of IAS 39 are accounted for as derivatives and measured at fair value.
(b) Fees earned as services are provided.
(i) Fees charged for servicing a loan.
Fees charged by an entity for servicing a loan are recognised as revenue as the services are provided.
(ii) Commitment fees to originate a loan when the loan commitment is outside the scope of IAS 39.
If it is unlikely that a specific lending arrangement will be entered into and the loan commitment is outside the scope of IAS 39, the commitment fee is recognised as revenue on a time proportion basis over the commitment period. Loan commitments that are within the scope of IAS 39 are accounted for as derivatives and measured at fair value.

(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.

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.

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:

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:

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:

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:

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: