Version 18 - September 2025 (CUD release)

Content update information

Financial period type: 12-Months (annual)
Target industry type: Manufacturing, Services, and Generic (excluding Financial Services)

Legislative IFRS changes for upcoming December 2025 financial year

Lack of Exchangeability – Amendments to MFRS 121 The Effects of Changes in Foreign Exchange Rates, effective for annual reporting periods beginning on or after 1 January 2025 2.
Classification and Measurement of Financial Instruments – Amendments to MFRS 9 Financial Instruments and MFRS 7 Financial Instruments: Disclosures, effective for annual reporting periods beginning on or after 1 January 2026 3.
Annual Improvements to MFRS Accounting Standards – Volume 11, effective for annual reporting periods beginning on or after 1 January 2026 4.
Contracts Referencing Nature-dependent Electricity – Amendments to MFRS 9 Financial Instruments and MFRS 7 Financial Instruments: Disclosures, effective for annual reporting periods beginning on or after 1 January 2026 5.
MFRS 18 Presentation and Disclosure in Financial Statements, effective for annual reporting periods beginning on or after 1 January 2027 6.
MFRS 19 Subsidiaries without Public Accountability: Disclosures, effective for annual reporting periods beginning on or after 1 January 2027 7.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investment in Associate and Joint Ventures, effective date has been deferred to a date to be announced by MASB.

Accounting law changes for December 2025 financial year

Early adoption for accounting standards

Lack of Exchangeability – Amendments to MFRS 121 The Effects of Changes in Foreign Exchange Rates, effective for annual reporting periods beginning on or after 1 January 2025
:
The amendments will be effective for annual reporting periods beginning on or after 1 January 2025. Early adoption is permitted, but will need to be disclosed. When applying the amendments, an entity cannot restate comparative information.
Classification and Measurement of Financial Instruments – Amendments to MFRS 9 Financial Instruments and MFRS 7 Financial Instruments: Disclosures, effective for annual reporting periods beginning on or after 1 January 2026
:
The amendments will be effective for annual reporting periods beginning on or after 1 January 2026. Entities can early adopt the amendments that relate to the classification of financial assets plus the related disclosures and apply the other amendments later.
The new requirements will be applied retrospectively with an adjustment to opening retained earnings. Prior periods are not required to be restated and can only be restated without using hindsight. An entity is required to disclose information about financial assets that change their measurement category due to the amendments.
Annual Improvements to MFRS Accounting Standards – Volume 11, effective for annual reporting periods beginning on or after 1 January 2026
:
Annual Improvements to MFRS Accounting Standards – Volume 11 will be effective for annual reporting periods beginning on or after 1 January 2026. The annual improvements process deals with non-urgent, but necessary, clarifications and amendments to MFRS. The following is a summary of the amendments.
MFRS 1 First-time Adoption of International Financial Reporting Standards
:
Focuses on Hedge Accounting by a First-time Adopter, whereby Paragraphs B5 and B6 of MFRS 1 have been amended to include cross references to the qualifying criteria for hedge accounting in paragraph 6.4.1(a), (b) and (c) of MFRS 9. These amendments are intended to address potential confusion arising from an inconsistency between the wording in MFRS 1 and the requirements for hedge accounting in MFRS 9. Earlier application of the amendments is permitted.
MFRS 7 Financial Instruments: Disclosures – focuses on Gain or Loss on Derecognition, whereby the amendments update the language on unobservable inputs in paragraph B38 of MFRS 7 and include a cross reference to paragraphs 72 and 73 of MFRS 13 Fair Value Measurement. Earlier application of the amendments is permitted.
Guidance on implementing MFRS 7 Financial Instruments: Disclosures – focuses on Introduction, Disclosure of Deferred Difference between Fair Value and Transaction Price, and Credit Risk Disclosures. The amendments are summarised:
Introduction – Paragraph IG1 of the Guidance on implementing MFRS 7 has been amended to clarify that the guidance does not necessarily illustrate all the requirements in the referenced paragraphs of MFRS 7, nor does it create additional requirements. o
Disclosure of Deferred Difference between Fair Value and Transaction Price – Paragraph IG14 of the Guidance on implementing MFRS 7 has been amended mainly to make the wording consistent with the requirements in paragraph 28 of MFRS 7 and with the concepts and terminology used in MFRS 9 and MFRS 13.
Credit Risk Disclosures – Paragraph IG20B of the Guidance on implementing MFRS 7 has been amended to simplify the explanation of which aspects of the MFRS requirements are not illustrated in the example
MFRS 10 Consolidated Financial Statements:
Focus: Determination of a ‘De Facto Agent’, whereby Paragraph B74 of MFRS 10 has been amended to clarify that the relationship described in paragraph B74 is just one example of various relationships that might exist between the investor and other parties acting as de facto agents of the investor.
The amendments are intended to remove the inconsistency with the requirement in paragraph B73 for an entity to use judgement to determine whether other parties are acting as de facto agents. Earlier application of the amendments is permitted.
MFRS 107 Statement of Cash Flows:
Focus: Cost Method, whereby Paragraph 37 of MFRS 107 has been amended to replace the term ‘cost method’ with ‘at cost’, following the prior deletion of the definition of ‘cost method’. Earlier application of the amendments is permitted.
Contracts Referencing Nature-dependent Electricity – Amendments to MFRS 9 Financial Instruments and MFRS 7 Financial Instruments: Disclosures, effective for annual reporting periods beginning on or after 1 January 2026:
The amendments will be effective for annual reporting periods beginning on or after 1 January 2026. Early adoption is permitted and must be disclosed. In February 2025, the MASB issued Contracts Referencing Nature-dependent Electricity which clarifies on application of the ‘own-use’ requirements, permits hedge accounting if these contracts are used as hedging instruments, and adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.
The clarifications regarding the ‘own use’ requirements must be applied retrospectively, but the guidance permitting hedge accounting have to be applied prospectively to new hedging relationships designated on or after the date of initial application.
MFRS 18 Presentation and Disclosure in Financial Statements, effective for annual reporting periods beginning on or after 1 January 2027.
MFRS 18, and the amendments to the other accounting standards, is effective for reporting periods beginning on or after 1 January 2027 and will apply retrospectively. Early adoption is permitted and must be disclosed.
MFRS 19 Subsidiaries without Public Accountability: Disclosures, effective for annual reporting periods beginning on or after 1 January 2027.
MFRS 19 is effective for reporting periods beginning on or after 1 January 2027 and earlier adoption is permitted. If an eligible entity chooses to apply the standard earlier, it is required to disclose that fact. An entity is required, during the first period (annual and interim) in which it applies the standard, to align the disclosures in the comparative period with the disclosures included in the current period under MFRS 19, unless MFRS 19 or another MFRS accounting standard permits or requires otherwise.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investment in Associate and Joint Ventures, effective date has been deferred to a date to be announced by MASB.
In December 2015, the MASB decided to defer the effective date of the amendments until such time as it has finalised any amendments that result from its research project on the equity method. Early application of the amendments is still permitted and must be disclosed. The amendments must be applied prospectively.