Credit Union Annual Report 2022 - Flipbook - Page 47
THE CAYMAN ISLANDS CIVIL SERVICE ASSOCIATION (CICSA)
CO-OPERATIVE CREDIT UNION LIMITED
NOTES TO FINANCIAL STATEMENTS (continued)
July 31, 2022
2.3 Changes in accounting policies and disclosures (continued)
Replacement of the term ‘significant’ with ‘material’ In the absence of a definition of the term ‘significant’ in IFRS, the
IASB decided to replace it with ‘material’ in the context of disclosing accounting policy information. ‘Material’ is a
defined term in IFRS and is widely understood by the users of financial statements, according to the IASB. In assessing
the materiality of accounting policy information, entities need to consider both the size of the transactions, other events
or conditions and the nature of them.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors - Amendments to IAS 8 (effective
January 1, 2023)
The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and
the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting
estimates.
The amended standard clarifies that the effects on an accounting estimate of a change in an input or a change in a
measurement technique are changes in accounting estimates if they do not result from the correction of prior period errors.
The previous definition of a change in accounting estimate specified that changes in accounting estimates may result from
new information or new developments. Therefore, such changes are not corrections of errors. This aspect of the
definition was retained by the IASB.
The amendments are intended to provide preparers of financial statements with greater clarity as to the definition of
accounting estimates, particularly in terms of the difference between accounting estimates and accounting policies.
Although the amendments are not expected to have a material impact on entities’ financial statements, they should
provide helpful guidance for entities in determining whether changes are to be treated as changes in estimates,
changes in policies, or errors.
Amendments to IAS 1: Classification of Liabilities as Current or Non -current (effective January 1, 2023)
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for
classifying liabilities as current or non-current. The amendments clarify:
What is meant by a right to defer settlement
That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a
liability not impact its classification
The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and must be applied
retrospectively. The Credit Union is currently assessing the impact the amendments will have on current practice and
whether existing loan agreements may require renegotiation.
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