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If not presented separately in the statement of Amendments to IAS 37 - Onerous Contracts Effective for annual periods
comprehensive income, the financial statements shall – Cost of Fulfilling a Contract beginning on or after
disclose the amounts of proceeds and cost included 1 January 2022
in profit or loss that relate to items produced that are The amendments specify that the ‘cost of fulfilling’ a Early application permitted.
not an output of the entity’s ordinary activities, and contract comprises the ‘costs that relate directly to
which line item(s) in the statement of comprehensive the contract’. Costs that relate directly to a contract
income include(s) such proceeds and cost. consist of both the incremental costs of fulfilling that
contract (examples would be direct labour or materials)
The amendments are applied retrospectively, but and an allocation of other costs that relate directly to
only to items of property, plant and equipment that fulfilling contracts (an example would be the allocation
are brought to the location and condition necessary of the depreciation charge for an item of property,
for them to be capable of operating in the manner plant and equipment used in fulfilling the contract).
intended by management on or after the beginning of
the earliest period presented in the financial statements The amendments apply to contracts for which the entity
in which the entity first applies the amendments. has not yet fulfilled all its obligations at the beginning
of the annual reporting period in which the entity first
The entity shall recognise the cumulative effect of applies the amendments. Comparatives are not restated.
initially applying the amendments as an adjustment
to the opening balance of retained earnings (or Instead, the entity shall recognise the cumulative effect of
other component of equity, as appropriate) at the initially applying the amendments as an adjustment to the
beginning of that earliest period presented. opening balance of retained earnings or other component
of equity, as appropriate, at the date of initial application.
Annual Improvements to IFRS Standards 2018-2020 Cycle -
Amendments to IFRS 1 First-time Adoption of International
Financial Reporting Standards, IFRS 9 Financial
Instruments, IFRS 16 Leases, and IAS 41 Agriculture
T ABLE OF C ONTENT S
