Commission Regulation (EU) No 183/2013 adopts Amendments to IFRS 1 Government Loans

The Commission Regulation (EU) No 183/2013 of 4 March 2013, published in the Official Journal of the European Union L 61 on 5 March 2013, adopts the amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards – Government Loans.

The amendments to IFRS 1 deal with loans received from governments at a below market rate of interest and their objective is to give first-time adopters of IFRSs relief from full retrospective application on transition to IFRSs. Thus, the amendments to IFRS 1 add an exception to the retrospective application of IFRSs to require that first-time adopters apply the requirements set out in IAS 39 Financial Instruments: Recognition and Measurement and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance prospectively to government loans existing at the date of transition to IFRSs.

Each company shall apply the amendments to IFRS 1, at the latest, as from the commencement date of its first financial year starting on or after 1 January 2013.