Commission Regulation (EU) 2026/338 of 13 February 2026 amending Regulation (EU) 2023/1803 as regards International Financial Reporting Standard 18

	26A	If an entity reclassifies an asset (or disposal group) directly from being held for sale to being held for distribution to owners, or directly from being held for distribution to owners to being held for sale, then the change in classification is considered a continuation of the original plan of disposal. The entity: (a) shall not follow the guidance in paragraphs 27–29 to account for this change. The entity shall apply the classification, presentation, measurement and disclosure requirements in this IFRS that are applicable to the new method of disposal. ...
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	28	The entity shall include any required adjustment to the carrying amount of a non-current asset that ceases to be classified as held for sale or as held for distribution to owners in profit or loss from continuing operations in the period in which the criteria in paragraphs 7–9 or 12A, respectively, are no longer met. Financial statements for the periods since classification as held for sale or as held for distribution to owners shall be amended accordingly if the disposal group or non-current asset that ceases to be classified as held for sale or as held for distribution to owners is a subsidiary, joint operation, joint venture, associate, or a portion of an interest in a joint venture or an associate. The entity shall present that adjustment in the same line item in the statement of comprehensive income used to present a gain or loss, if any, recognised in accordance with paragraph 37. ...

PRESENTATION AND DISCLOSURE

...

Discontinued operations

	31	A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. In other words, a component of an entity will have been a cash-generating unit or a group of cash-generating units while being held for use. ...
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	33	An entity shall present or disclose: ... (b) an analysis of the single amount in (a) into: (i) the revenue, expenses and pre-tax profit or loss of discontinued operations; (ii) the related income tax expense as required by paragraph 81(h) of IAS 12. (iii) the gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation; and (iv) the related income tax expense as required by paragraph 81(h) of IAS 12. The analysis may be presented in the statement of comprehensive income or disclosed in the notes. If it is presented in the statement of comprehensive income it shall be classified in the discontinued operations category, ie separately from continuing operations. The analysis is not required for disposal groups that are newly acquired subsidiaries that meet the criteria to be classified as held for sale on acquisition (see paragraph 11). (c) the net cash flows attributable to the operating, investing and financing activities of discontinued operations. This information may either be presented in the statement of cash flows or disclosed in the notes. These disclosures are not required for disposal groups that are newly acquired subsidiaries that meet the criteria to be classified as held for sale on acquisition (see paragraph 11). (d) the amount of income from continuing operations and from discontinued operations attributable to owners of the parent. This information may either be presented in the statement of comprehensive income or disclosed in the notes.
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	33A	If an entity presents the items of profit or loss in a statement of profit or loss separate from a statement presenting comprehensive income as described in paragraph 12(b) of IFRS 18, a category identified as relating to discontinued operations is presented in the statement of profit or loss.
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	34	An entity shall re-present the presentations and disclosures in paragraph 33 for prior periods presented in the financial statements so that the presentations and disclosures relate to all operations that have been discontinued by the end of the reporting period for the latest period presented.
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	35	Adjustments in the current period to amounts previously classified in the discontinued operations category that are directly related to the disposal of a discontinued operation in a prior period shall also be classified separately in the discontinued operations category. The nature and amount of such adjustments shall be disclosed. Examples of circumstances in which these adjustments may arise include the following: ...
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	36	If an entity ceases to classify a component of an entity as held for sale, the results of operations of the component previously classified in the discontinued operations category in accordance with paragraphs 33–35 shall be reclassified and included in income from continuing operations for all periods presented. The amounts for prior periods shall be described as having been re-presented.
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	36A	An entity that is committed to a sale plan involving loss of control of a subsidiary shall present or disclose the information required in paragraphs 33–36 when the subsidiary is a disposal group that meets the definition of a discontinued operation in accordance with paragraph 32. ...

Non-current asset or disposal group classified as held for sale

	38	An entity shall present a non-current asset classified as held for sale and the assets of a disposal group classified as held for sale separately from other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale shall be presented separately from other liabilities in the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. The major classes of assets and liabilities classified as held for sale shall either be presented separately in the statement of financial position or disclosed in the notes, except as permitted by paragraph 39. An entity shall present separately any cumulative income or expense recognised in other comprehensive income relating to a non-current asset (or disposal group) classified as held for sale.
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	39	If the disposal group is a newly acquired subsidiary that meets the criteria to be classified as held for sale on acquisition (see paragraph 11), presentation or disclosure of the major classes of assets and liabilities is not required. ...

Additional disclosures

	41	An entity shall disclose the following information in the notes in the period in which a non-current asset (or disposal group) has been either classified as held for sale or sold: ... (c) the gain or loss recognised in accordance with paragraphs 20–22 and, if not separately presented in the statement of comprehensive income, the line item in the statement of comprehensive income that includes that gain or loss; ...

EFFECTIVE DATE

...

	44N	IFRS 18 issued in April 2024 amended paragraphs 2, 3, 5A, 5B, 13, 17, 26A, 28, 33–36A, 38, 39 and 41, and the headings before paragraphs 31 and 38. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to the end of paragraph 44A.

• • In April 2024 the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements and carried over these requirements in IAS 1 Presentation of Financial Statements to IFRS 18.

A footnote is added to the end of paragraph 44I.

• • When it issued IFRS 18, the IASB carried over these requirements in IAS 1 to IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ’ in paragraph 44L.

• • When it issued IFRS 18, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 6   Exploration for and Evaluation of Mineral Resources

Paragraph 6 is amended. Paragraph 26B is added.

RECOGNITION OF EXPLORATION AND EVALUATION ASSETS

Temporary exemption from IAS 8 paragraphs 11 and 12

	6	When developing its accounting policies, an entity recognising exploration and evaluation assets shall apply paragraph 10 of IAS 8 Basis of Preparation of Financial Statements. ...

EFFECTIVE DATE

...

	26B	IFRS 18 Presentation and Disclosure in Financial Statements issued in April 2024 amended paragraph 6. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.’ in paragraph 26A.

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 7   Financial Instruments: Disclosures

Paragraphs 3, 8, 20, 21, 24C, 24E, 24F, 24G, B5, B7 and B46 are amended. Paragraphs 19A–19B and their related subheading, and paragraph 44KK are added.

SCOPE

	3	This IFRS shall be applied by all entities to all types of financial instruments, except: ... (f) instruments that are required to be classified as equity instruments in accordance with paragraphs 16A and 16B or paragraphs 16C and 16D of IAS 32. However, the disclosures required by paragraphs 19A–19B are required for such instruments. ...

SIGNIFICANCE OF FINANCIAL INSTRUMENTS FOR FINANCIAL POSITION AND PERFORMANCE

...

Statement of financial position

Categories of financial assets and financial liabilities

	8	The carrying amounts of each of the following categories, as specified in IFRS 9, shall either be presented in the statement of financial position or disclosed in the notes: ...

Financial instruments classified as equity in accordance with paragraphs 16A–16B or paragraphs 16C–16D of IAS 32

	19A	For puttable financial instruments classified as equity instruments in accordance with paragraphs 16A–16B of IAS 32, an entity shall disclose (to the extent not disclosed elsewhere): (a) summary quantitative data about the amount classified as equity; (b) its objectives, policies and processes for managing its obligation to repurchase or redeem the instruments when required to do so by the instrument holders, including any changes from the previous period; (c) the expected cash outflow on redemption or repurchase of that class of financial instruments; and (d) information about how the expected cash outflow on redemption or repurchase was determined.
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	19B	If an entity has reclassified any of the following financial instruments between financial liabilities and equity, it shall disclose the amount reclassified into and out of each category (financial liabilities or equity), and the timing and reason for that reclassification: (a) a puttable financial instrument classified as an equity instrument applying paragraphs 16A–16B of IAS 32; or (b) an instrument that imposes on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation and is classified as an equity instrument applying paragraphs 16C–16D of IAS 32.

Statement of comprehensive income

Items of income, expense, gains or losses

	20	An entity shall either present, subject to the presentation requirements in IFRS 18 Presentation and Disclosure in Financial Statements, the following items of income, expense, gains or losses in the statement of comprehensive income or disclose them in the notes: ...

Other disclosures

Accounting policies

	21	In accordance with paragraph 27A of IAS 8 Basis of Preparation of Financial Statements, an entity discloses material accounting policy information. Information about the measurement basis (or bases) for financial instruments used in preparing the financial statements is expected to be material accounting policy information.

Hedge accounting

...

The effects of hedge accounting on financial position and performance

...

	24C	An entity shall disclose, in a tabular format, the following amounts separately by risk category for the types of hedges as follows: ... (b) for cash flow hedges and hedges of a net investment in a foreign operation: ... (iv) the amount reclassified from the cash flow hedge reserve or the foreign currency translation reserve into profit or loss as a reclassification adjustment (see IFRS 18) (differentiating between amounts for which hedge accounting had previously been used, but for which the hedged future cash flows are no longer expected to occur, and amounts that have been transferred because the hedged item has affected profit or loss); (v) the line item in the statement of comprehensive income that includes the reclassification adjustment (see IFRS 18); and ...
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	24E	An entity shall provide a reconciliation of each component of equity and an analysis of other comprehensive income in accordance with IFRS 18 that, taken together: ...
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	24F	An entity shall provide the information required in paragraph 24E separately by risk category. This disaggregation by risk may be disclosed in the notes to the financial statements.

Option to designate a credit exposure as measured at fair value through profit or loss

	24G	If an entity designated a financial instrument, or a proportion of it, as measured at fair value through profit or loss because it uses a credit derivative to manage the credit risk of that financial instrument it shall disclose: ... (c) on discontinuation of measuring a financial instrument, or a proportion of it, at fair value through profit or loss, that financial instrument’s fair value that has become the new carrying amount in accordance with paragraph 6.7.4 of IFRS 9 and the related nominal or principal amount (except for providing comparative information in accordance with IFRS 18, an entity does not need to continue this disclosure in subsequent periods). ...

EFFECTIVE DATE AND TRANSITION

...

	44KK	IFRS 18 issued in April 2024 amended paragraphs 3, 8, 20, 21, 24C, 24E, 24F, 24G, B5, B7 and B46, and added paragraphs 19A–19B and a related subheading. An entity shall apply those amendments when it applies IFRS 18. ...

Appendix B

Application guidance

CLASSES OF FINANCIAL INSTRUMENTS AND LEVEL OF DISCLOSURE (PARAGRAPH 6)

...

Other disclosure – accounting policies (paragraph 21)

	B5	Paragraph 21 requires disclosure of material accounting policy information, which is expected to include information about the measurement basis (or bases) for financial instruments used in preparing the financial statements. For financial instruments, such disclosure may include: ... Paragraph 27G of IAS 8 Basis of Preparation of Financial Statements also requires entities to disclose, along with material accounting policy information or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS (PARAGRAPHS 31–42)

...

Quantitative disclosures (paragraph 34)

	B7	Paragraph 34(a) requires disclosures of summary quantitative data about an entity’s exposure to risks based on the information provided internally to key management personnel of the entity. When an entity uses several methods to manage a risk exposure, the entity shall disclose information using the method or methods that provide the most relevant and reliable information. IAS 8 discusses relevance and reliability. ...

DERECOGNITION (PARAGRAPHS 42C–42H)

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Offsetting financial assets and financial liabilities (paragraphs 13A–13F)

...

Disclosure of the net amounts presented in the statement of financial position (paragraph 13C(c))

...

	B46	The amounts required to be disclosed by paragraph 13C(c) must be reconciled to the individual line item amounts presented in the statement of financial position. For example, if an entity applying the requirements of IFRS 18 aggregates or disaggregates amounts presented in individual financial statement line items when the entity provides the amounts required by paragraph 13C(c), it must reconcile those aggregated or disaggregated amounts back to the individual line item amounts presented in the statement of financial position.

A footnote is added to the end of paragraph 44A.

• • In April 2024 the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements and carried over these requirements in IAS 1 Presentation of Financial Statements to IFRS 18.

A footnote is added to the end of paragraph 44C.

• • When it issued IFRS 18, the IASB carried over these requirements in IAS 1 to IFRS 7 Financial Instruments: Disclosures.

A footnote is added to the end of paragraph 44Q.

• • When it issued IFRS 18, the IASB carried over these requirements in IAS 1 to IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ’ in paragraph 44AA.

• • When it issued IFRS 18, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.’ in paragraph 44FF.

• • When it issued IFRS 18, the IASB changed the title of IAS 8.

A footnote is added to the end of paragraph 44II.

• • When it issued IFRS 18, the IASB carried over the requirements to disclose material accounting policy information in IAS 1 to IAS 8.

IFRS 8   Operating Segments

Paragraph 23 is amended and paragraph 36D is added.

DISCLOSURE

...

Information about profit or loss, assets and liabilities

	23	An entity shall report a measure of profit or loss for each reportable segment. An entity shall report a measure of total assets and liabilities for each reportable segment if such amounts are regularly provided to the chief operating decision maker. An entity shall also disclose the following about each reportable segment if the specified amounts are included in the measure of segment profit or loss reviewed by the chief operating decision maker, or are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss: ... (f) material items of income and expense disclosed in accordance with paragraph 42 of IFRS 18 Presentation and Disclosure in Financial Statements; ...

TRANSITION AND EFFECTIVE DATE

...

	36D	IFRS 18 issued in April 2024 amended paragraph 23. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to the end of paragraph 36A.

• • In April 2024 the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements and carried over these requirements in IAS 1 Presentation of Financial Statements to IFRS 18.

IFRS 9   Financial Instruments

Paragraphs 5.6.5, 5.6.7, 5.7.10, 6.5.11, 6.5.12, 6.5.14, 6.5.15, 6.7.2 and B4.1.2A are amended and paragraph 7.1.11 is added.

Chapter 5   Measurement

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5.6   RECLASSIFICATION OF FINANCIAL ASSETS

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	5.6.5	If an entity reclassifies a financial asset out of the fair value through other comprehensive income measurement category and into the amortised cost measurement category, the financial asset is reclassified at its fair value at the reclassification date. However, the cumulative gain or loss previously recognised in other comprehensive income is removed from equity and adjusted against the fair value of the financial asset at the reclassification date. As a result, the financial asset is measured at the reclassification date as if it had always been measured at amortised cost. This adjustment affects other comprehensive income but does not affect profit or loss and therefore is not a reclassification adjustment (see IFRS 18 Presentation and Disclosure in Financial Statements). The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification. (See paragraph B5.6.1.) ...
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	5.6.7	If an entity reclassifies a financial asset out of the fair value through other comprehensive income measurement category and into the fair value through profit or loss measurement category, the financial asset continues to be measured at fair value. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment (see IFRS 18) at the reclassification date.

5.7   GAINS AND LOSSES

...

Assets measured at fair value through other comprehensive income

	5.7.10	A gain or loss on a financial asset measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A shall be recognised in other comprehensive income, except for impairment gains or losses (see Section 5.5) and foreign exchange gains and losses (see paragraphs B5.7.2–B5.7.2A), until the financial asset is derecognised or reclassified. When the financial asset is derecognised the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment (see IFRS 18). If the financial asset is reclassified out of the fair value through other comprehensive income measurement category, the entity shall account for the cumulative gain or loss that was previously recognised in other comprehensive income in accordance with paragraphs 5.6.5 and 5.6.7. Interest calculated using the effective interest method is recognised in profit or loss. ...

Chapter 6   Hedge accounting

...

6.5   ACCOUNTING FOR QUALIFYING HEDGING RELATIONSHIPS

...

Cash flow hedges

	6.5.11	As long as a cash flow hedge meets the qualifying criteria in paragraph 6.4.1, the hedging relationship shall be accounted for as follows: ... (d) the amount that has been accumulated in the cash flow hedge reserve in accordance with (a) shall be accounted for as follows: (i) if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity shall remove that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment (see IFRS 18) and hence it does not affect other comprehensive income. (ii) for cash flow hedges other than those covered by (i), that amount shall be reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment (see IFRS 18) in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, in the periods that interest income or interest expense is recognised or when a forecast sale occurs). (iii) however, if that amount is a loss and an entity expects that all or a portion of that loss will not be recovered in one or more future periods, it shall immediately reclassify the amount that is not expected to be recovered into profit or loss as a reclassification adjustment (see IFRS 18).
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	6.5.12	When an entity discontinues hedge accounting for a cash flow hedge (see paragraphs 6.5.6 and 6.5.7(b)) it shall account for the amount that has been accumulated in the cash flow hedge reserve in accordance with paragraph 6.5.11(a) as follows: ... (b) if the hedged future cash flows are no longer expected to occur, that amount shall be immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment (see IFRS 18). A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.

Hedges of a net investment in a foreign operation

...

	6.5.14	The cumulative gain or loss on the hedging instrument relating to the effective portion of the hedge that has been accumulated in the foreign currency translation reserve shall be reclassified from equity to profit or loss as a reclassification adjustment (see IFRS 18) in accordance with paragraphs 48–49 of IAS 21 on the disposal or partial disposal of the foreign operation.

Accounting for the time value of options

	6.5.15	When an entity separates the intrinsic value and time value of an option contract and designates as the hedging instrument only the change in intrinsic value of the option (see paragraph 6.2.4(a)), it shall account for the time value of the option as follows (see paragraphs B6.5.29–B6.5.33): ... (b) the change in fair value of the time value of an option that hedges a transaction related hedged item shall be recognised in other comprehensive income to the extent that it relates to the hedged item and shall be accumulated in a separate component of equity. The cumulative change in fair value arising from the time value of the option that has been accumulated in a separate component of equity (the ‘amount’) shall be accounted for as follows: (i) if the hedged item subsequently results in the recognition of a non-financial asset or a non-financial liability, or a firm commitment for a non-financial asset or a non-financial liability for which fair value hedge accounting is applied, the entity shall remove the amount from the separate component of equity and include it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment (see IFRS 18) and hence does not affect other comprehensive income. (ii) for hedging relationships other than those covered by (i), the amount shall be reclassified from the separate component of equity to profit or loss as a reclassification adjustment (see IFRS 18) in the same period or periods during which the hedged expected future cash flows affect profit or loss (for example, when a forecast sale occurs). (iii) however, if all or a portion of that amount is not expected to be recovered in one or more future periods, the amount that is not expected to be recovered shall be immediately reclassified into profit or loss as a reclassification adjustment (see IFRS 18). (c) the change in fair value of the time value of an option that hedges a time-period related hedged item shall be recognised in other comprehensive income to the extent that it relates to the hedged item and shall be accumulated in a separate component of equity. The time value at the date of designation of the option as a hedging instrument, to the extent that it relates to the hedged item, shall be amortised on a systematic and rational basis over the period during which the hedge adjustment for the option’s intrinsic value could affect profit or loss (or other comprehensive income, if the hedged item is an equity instrument for which an entity has elected to present changes in fair value in other comprehensive income in accordance with paragraph 5.7.5). Hence, in each reporting period, the amortisation amount shall be reclassified from the separate component of equity to profit or loss as a reclassification adjustment (see IFRS 18). However, if hedge accounting is discontinued for the hedging relationship that includes the change in intrinsic value of the option as the hedging instrument, the net amount (ie including cumulative amortisation) that has been accumulated in the separate component of equity shall be immediately reclassified into profit or loss as a reclassification adjustment (see IFRS 18). ...

6.7   OPTION TO DESIGNATE A CREDIT EXPOSURE AS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS

...

Accounting for credit exposures designated at fair value through profit or loss

	6.7.2	If a financial instrument is designated in accordance with paragraph 6.7.1 as measured at fair value through profit or loss after its initial recognition, or was previously not recognised, the difference at the time of designation between the carrying amount, if any, and the fair value shall immediately be recognised in profit or loss. For financial assets measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A, the cumulative gain or loss previously recognised in other comprehensive income shall immediately be reclassified from equity to profit or loss as a reclassification adjustment (see IFRS 18). ...

Chapter 7   Effective date and transition

7.1   EFFECTIVE DATE

...

	7.1.11	IFRS 18 issued in April 2024 amended paragraphs 5.6.5, 5.6.7, 5.7.10, 6.5.11, 6.5.12, 6.5.14, 6.5.15, 6.7.2 and B4.1.2A. An entity shall apply those amendments when it applies IFRS 18. ...

Appendix B

Application guidance

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CLASSIFICATION (CHAPTER 4)

Classification of financial assets (Section 4.1)

The entity’s business model for managing financial assets

...

	B4.1.2A	An entity’s business model refers to how an entity manages its financial assets in order to generate cash flows. That is, the entity’s business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. Consequently, this assessment is not performed on the basis of scenarios that the entity does not reasonably expect to occur, such as so-called ‘worst case’ or ‘stress case’ scenarios. For example, if an entity expects that it will sell a particular portfolio of financial assets only in a stress case scenario, that scenario would not affect the entity’s assessment of the business model for those assets if the entity reasonably expects that such a scenario will not occur. If cash flows are realised in a way that is different from the entity’s expectations at the date that the entity assessed the business model (for example, if the entity sells more or fewer financial assets than it expected when it classified the assets), that does not give rise to a prior period error in the entity’s financial statements (see IAS 8 Basis of Preparation of Financial Statements) nor does it change the classification of the remaining financial assets held in that business model (ie those assets that the entity recognised in prior periods and still holds) as long as the entity considered all relevant information that was available at the time that it made the business model assessment. However, when an entity assesses the business model for newly originated or newly purchased financial assets, it must consider information about how cash flows were realised in the past, along with all other relevant information.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph 7.2.1.

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 10   Consolidated Financial Statements

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph C2.

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 11   Joint Arrangements

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph C1B.

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 12   Disclosure of Interests in Other Entities

Paragraph B14 is amended and paragraph C1E is added.

Appendix B

Application guidance

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SUMMARISED FINANCIAL INFORMATION FOR SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES (PARAGRAPHS 12 AND 21)

...

	B14	The summarised financial information disclosed in accordance with paragraphs B12 and B13 shall be the amounts included in the IFRS financial statements of the joint venture or associate (and not the entity’s share of those amounts). If the entity accounts for its interest in the joint venture or associate using the equity method: (a) the amounts included in the IFRS financial statements of the joint venture or associate shall be adjusted to reflect adjustments made by the entity when using the equity method, such as fair value adjustments made at the time of acquisition and adjustments for differences in accounting policies. (b) the entity shall provide a reconciliation of the summarised financial information disclosed to the carrying amount of its interest in the joint venture or associate. ...

Appendix C

Effective date and transition

EFFECTIVE DATE AND TRANSITION

...

	C1E	IFRS 18 Presentation and Disclosure in Financial Statements issued in April 2024 amended paragraph B14. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ’ in paragraph C1D.

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 13   Fair Value Measurement

Paragraph 51 is amended and paragraph C7 is added.

MEASUREMENT

...

Application to financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk

...

	51	An entity shall make an accounting policy decision in accordance with IAS 8 Basis of Preparation of Financial Statements to use the exception in paragraph 48. An entity that uses the exception shall apply that accounting policy, including its policy for allocating bid-ask adjustments (see paragraphs 53–55) and credit adjustments (see paragraph 56), if applicable, consistently from period to period for a particular portfolio. ...

Appendix C

Effective date and transition

...

C7

IFRS 18 Presentation and Disclosure in Financial Statements issued in April 2024 amended paragraph 51. An entity shall apply those amendments when it applies IFRS 18.

IFRS 15   Revenue from Contracts with Customers

Paragraph 43 is amended and paragraph C1D is added..

RECOGNITION

...

Satisfaction of performance obligations

...

Measuring progress towards complete satisfaction of a performance obligation

...

Methods for measuring progress

...

	43	As circumstances change over time, an entity shall update its measure of progress to reflect any changes in the outcome of the performance obligation. Such changes to an entity’s measure of progress shall be accounted for as a change in accounting estimate in accordance with IAS 8 Basis of Preparation of Financial Statements. ... Appendix C Effective date and transition EFFECTIVE DATE ... C1D IFRS 18 Presentation and Disclosure in Financial Statements issued in April 2024 amended paragraph 43. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph C3(a).

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 16   Leases

Paragraph 49 is amended and paragraph C1E is added.

LESSEE

...

Presentation

...

	49	In the statement of profit or loss and other comprehensive income, a lessee shall present interest expense on the lease liability separately from the depreciation charge for the right-of-use asset. Paragraph 61 of IFRS 18 Presentation and Disclosure in Financial Statements requires an entity to classify in the financing category of the statement of profit or loss interest expense on the lease liability, identified by the entity applying paragraph 36(a). ...

Appendix C

Effective date and transition

EFFECTIVE DATE

...

	C1E	IFRS 18 issued in April 2024 amended paragraph 49. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;’ in paragraph C5(a).

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IFRS 17   Insurance Contracts

Paragraphs 91, 96, 103 and B129 are amended and paragraph C2B is added.

RECOGNITION AND PRESENTATION IN THE STATEMENT(S) OF FINANCIAL PERFORMANCE (PARAGRAPHS B120–B136)

...

Insurance finance income or expenses (see paragraphs B128–B136)

...

	91	If an entity transfers a group of insurance contracts or derecognises an insurance contract applying paragraph 77: (a) it shall reclassify to profit or loss as a reclassification adjustment (see IFRS 18 Presentation and Disclosure in Financial Statements) any remaining amounts for the group (or contract) that were previously recognised in other comprehensive income because the entity chose the accounting policy set out in paragraph 88(b). (b) it shall not reclassify to profit or loss as a reclassification adjustment (see IFRS 18) any remaining amounts for the group (or contract) that were previously recognised in other comprehensive income because the entity chose the accounting policy set out in paragraph 89(b). ...

DISCLOSURE

...

	96	Paragraphs 41–43 of IFRS 18 set out requirements relating to aggregation and disaggregation of information. Examples of characteristics that might be appropriate as a basis to disaggregate information disclosed about insurance contracts are: (a) type of contract (for example, major product lines); (b) geographical area (for example, country or region); or (c) reportable segment, as defined in IFRS 8 Operating Segments.

Explanation of recognised amounts

...

	103	An entity shall separately disclose in the reconciliations required in paragraph 100 each of the following amounts related to services, if applicable: ... (c) investment components excluded from insurance revenue and insurance service expenses (combined with refunds of premiums unless refunds of premiums are disclosed as part of the cash flows in the period described in paragraph 105(a)(i)).

...

Appendix B

Application guidance

...

INSURANCE FINANCE INCOME OR EXPENSES (PARAGRAPHS 87–92)

...

	B129	Paragraphs 88–89 require an entity to make an accounting policy choice as to whether to disaggregate insurance finance income or expenses for the period between profit or loss and other comprehensive income. An entity shall apply its choice of accounting policy to portfolios of insurance contracts. In assessing the appropriate accounting policy for a portfolio of insurance contracts, applying paragraph 13 of IAS 8 Basis of Preparation of Financial Statements, the entity shall consider for each portfolio the assets that the entity holds and how it accounts for those assets. ...

Appendix C

Effective date and transition

EFFECTIVE DATE

...

	C2B	IFRS 18 Presentation and Disclosure in Financial Statements issued in April 2024 amended paragraphs 91, 96, 103 and B129. An entity shall apply those amendments when it applies IFRS 18.

A footnote is added to ‘IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;’ in paragraph C3(a).

• • When it issued IFRS 18 Presentation and Disclosure in Financial Statements in April 2024, the IASB changed the title of IAS 8 to Basis of Preparation of Financial Statements.

IAS 2   Inventories

Paragraph 39 is amended and paragraph 40H is added.

DISCLOSURE

...

	39	Some entities classify expenses by nature in the operating category of the statement of profit or loss in a way that results in amounts being presented other than the cost of inventories recognised as an expense during the period. In this case, the entity presents the costs recognised as an expense for raw materials and consumables, employee benefits and other costs together with the amount of the net change in inventories for the period.

EFFECTIVE DATE

...

	40H	IFRS 18 Presentation and Disclosure in Financial Statements issued in April 2024 amended paragraph 39. An entity shall apply those amendments when it applies IFRS 18.

IAS 7   Statement of Cash Flows

Paragraphs 6, 10, 12, 14, 16–18, 20, 31, 32, 35, 46 and 47 are amended. Paragraphs 33A, 34A–34D, and 64 are added. Paragraphs 33 and 34 are deleted.

DEFINITIONS

	6	The following terms are used in this Standard with the meanings specified: ... Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents and the receipt of interest and dividends as described in paragraphs 34A–34D. ...

PRESENTATION OF A STATEMENT OF CASH FLOWS

	10	The statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities. In preparing the statement of cash flows, an entity shall apply this Standard and also apply the general requirements for financial statements in paragraphs 9–43 and 113–114 of IFRS 18 Presentation and Disclosure in Financial Statements. ...
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	12	A single transaction may include cash flows that are classified differently.

Operating activities

...

	14	Cash flows from operating activities are primarily derived from the principal revenue-producing activities of the entity. Therefore, they generally result from the transactions and other events that enter into the determination of profit or loss. Examples of cash flows from operating activities are: (a) cash receipts from the sale of goods and the rendering of services; (b) cash receipts from royalties, fees, commissions and other revenue; (c) cash payments to suppliers for goods and services; (d) cash payments to and on behalf of employees; (e) [deleted] (f) cash payments or refunds of income taxes unless they can be specifically identified with financing and investing activities; (g) cash receipts and payments from contracts held for dealing or trading purposes; and (h) cash receipts of dividends and cash receipts and payments of interest as described in paragraphs 34B–34D. Some transactions, such as the sale of an item of plant, may give rise to a gain or loss that is included in recognised profit or loss. The cash flows relating to such transactions are cash flows from investing activities. However, cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale as described in paragraph 68A of IAS 16 Property, Plant and Equipment are cash flows from operating activities. The cash receipts from rents and subsequent sales of such assets are also cash flows from operating activities. ...

Investing activities

	16	The separate presentation of cash flows arising from investing activities is important because the cash flows represent the extent to which expenditures have been made for resources intended to generate future income and cash flows. Only expenditures that result in a recognised asset in the statement of financial position are eligible for classification as investing activities. Examples of cash flows arising from investing activities are: (a) cash payments to acquire property, plant and equipment, intangibles and other long-term assets. These payments include those relating to capitalised development costs and self-constructed property, plant and equipment. (b) cash receipts from sales of property, plant and equipment, intangibles and other long-term assets.; (c) cash payments to acquire equity or debt instruments of other entities including interests in associates and joint ventures (other than payments for those instruments considered to be cash equivalents or those held for dealing or trading purposes). (d) cash receipts from sales of equity or debt instruments of other entities including interests in associates and joint ventures (other than receipts for those instruments considered to be cash equivalents and those held for dealing or trading purposes). (e) cash advances and loans made to other parties (other than advances and loans made by a financial institution). (f) cash receipts from the repayment of advances and loans made to other parties (other than advances and loans of a financial institution). (g) cash payments for futures contracts, forward contracts, option contracts and swap contracts except when the contracts are held for dealing or trading purposes, or the payments are classified as financing activities. (h) cash receipts from futures contracts, forward contracts, option contracts and swap contracts except when the contracts are held for dealing or trading purposes, or the receipts are classified as financing activities. (i) cash receipts of interest and dividends as described in paragraphs 34A–34D. When a contract is accounted for as a hedge of an identifiable position the cash flows of the contract are classified in the same manner as the cash flows of the position being hedged.

Financing activities

	17	The separate presentation of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of capital to the entity. Examples of cash flows arising from financing activities are: (a) cash proceeds from issuing shares or other equity instruments; (b) cash payments to owners to acquire or redeem the entity’s shares; (c) cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short-term or long-term borrowings; (d) cash repayments of amounts borrowed; (e) cash payments by a lessee for the reduction of the outstanding liability relating to a lease; (f) cash payments of dividends as described in paragraph 33A; and (g) cash payments of interest as described in paragraphs 34A–34D.

REPORTING CASH FLOWS FROM OPERATING ACTIVITIES

	18	An entity shall report cash flows from operating activities using either: (a) the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or (b) the indirect method, whereby operating profit or loss is adjusted for: (i) the effects of transactions of a non-cash nature; (ii) any deferrals or accruals of past or future operating cash receipts or payments; (iii) income or expenses classified in the operating category in the statement of profit or loss for which the associated cash flows are classified as cash flows from either investing or financing activities; and (iv) cash flows from operating activities for which the associated income or expenses are not classified in the operating category of the statement of profit or loss. ...
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	20	Under the indirect method, the net cash flow from operating activities is determined by adjusting operating profit or loss for the effects of: (a) changes during the period in inventories and operating receivables and payables; (b) non-cash items such as depreciation, provisions and, unrealised foreign currency gains and losses classified in the operating category; (c) income or expenses classified in the operating category in the statement of profit or loss for which the cash effects are investing or financing cash flows; and (d) operating cash flows, such as income tax (in accordance with paragraph 35), for which the corresponding income or expenses are not classified in the operating category in the statement of profit or loss. Alternatively, the net cash flow from operating activities may be presented under the indirect method by showing the revenues and expenses classified in the operating category in the statement of profit or loss, the changes during the period in inventories and operating receivables and payables and any other operating cash flows for which the corresponding income or expenses are not classified in the operating category. ...

INTEREST AND DIVIDENDS

	31	Cash flows from interest and dividends received and paid shall each be presented separately. Each shall be classified in a consistent manner from period to period applying paragraphs 32, 33A and 34A–34D.
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	32	The total amount of interest paid during a period is included in the statement of cash flows whether it has been recognised as an expense in profit or loss or capitalised in accordance with IAS 23 Borrowing Costs.
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	33	[Deleted]
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	33A	An entity shall classify dividends paid as cash flows from financing activities.
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	34	[Deleted]
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	34A	An entity, other than those entities described in paragraph 34B, shall classify: (a) interest paid (as described in paragraph 32) as cash flows from financing activities. (b) interest and dividends received as cash flows from investing activities.
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	34B	An entity that invests in assets or provides financing to customers as a main business activity (as determined applying paragraphs B30–B41 of IFRS 18) shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how—applying IFRS 18—it classifies dividend income, interest income and interest expenses in the statement of profit or loss. An entity shall classify the total of each of these cash flows in a single category in the statement of cash flows (that is, either as operating, investing or financing activities).
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	34C	In applying paragraph 34B, if an entity classifies the total of each of dividend income, interest income and interest expenses in a single category of the statement of profit or loss, the entity shall classify the total of each of dividends received, interest received and interest paid as cash flows arising from the associated activity in the statement of cash flows. For example, if an entity classifies all its interest expenses in the financing category of the statement of profit or loss, the entity would classify all its interest paid as cash flows from financing activities.
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	34D	In applying IFRS 18, an entity may be required to classify each of dividend income, interest income and interest expenses in more than one category of the statement of profit or loss. In such a case, in applying paragraph 34B the entity shall make an accounting policy choice to classify the related cash flows in one of the associated activities in the statement of cash flows. For example, if an entity classifies interest expenses in the operating category and the financing category of the statement of profit or loss, the entity would classify all its interest paid in accordance with its accounting policy as either cash flows from operating activities or cash flows from financing activities.

TAXES ON INCOME

	35	Cash flows arising from taxes on income shall be separately presented and shall be classified as cash flows from operating activities unless they can be specifically identified with financing and investing activities. ...

COMPONENTS OF CASH AND CASH EQUIVALENTS

...

	46	In view of the variety of cash management practices and banking arrangements around the world and in order to comply with IAS 8 Basis of Preparation of Financial Statements, an entity discloses the policy which it adopts in determining the composition of cash and cash equivalents.
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	47	The effect of any change in the policy for determining components of cash and cash equivalents, for example, a change in the classification of financial instruments previously considered to be part of an entity’s investment portfolio, is reported in accordance with IAS 8. ...

EFFECTIVE DATE

...

	64	IFRS 18 issued in April 2024 amended paragraphs 6, 10, 12, 14, 16–18, 20, 31, 32, 35, 46 and 47, added paragraphs 33A and 34A–34D, and deleted paragraphs 33 and 34. An entity shall apply those amendments when it applies IFRS 18.

The footnote to the title of IAS 7 is amended.

• • In September 2007 the IASB amended the title of IAS 7 from Cash Flow Statements to Statement of Cash Flows as a consequence of the revision of IAS 1 Presentation of Financial Statements in 2007. In April 2024 the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements and carried over these requirements in IAS 1 to IFRS 18.

IAS 8   Accounting Policies, Changes in Accounting Estimates and Errors

The title of IAS 8 is amended.

IAS 8   Basis of Preparation of Financial Statements

Paragraphs 1, 3, 5, 11 and 32 are amended and paragraph 2 is deleted. Paragraph 3A, paragraphs 6A–6J, 6K–6L, 6M–6N, 27A–27I and 31A–31I, each with a related heading or subheading, and paragraph 54J are added. A subheading is also added before paragraph 28. Paragraph 28 has not been amended but included for ease of reference.

OBJECTIVE

	1	The objective of this Standard is to enhance the relevance and reliability of an entity’s financial statements, and the comparability of those financial statements over time and with financial statements of other entities, by prescribing the basis of preparation of financial statements which includes: (a) general matters; (b) the criteria for selecting, changing and disclosing accounting policies; and (c) the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and corrections of errors.
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	2	[Deleted]

SCOPE

	3	This Standard shall be applied in determining the basis of preparation of financial statements, including selecting and applying accounting policies, and accounting for changes in accounting policies, changes in accounting estimates and corrections of prior period errors.
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	3A	IAS 34 Interim Financial Reporting sets out the requirements for the presentation and disclosure of condensed interim financial statements. Paragraphs 6A–6N of this Standard also apply to such interim financial statements. ...

DEFINITIONS

	5	The following terms are used in this Standard with the meanings specified: ... IFRS Accounting Standards are accounting standards issued by the International Accounting Standards Board. They comprise: (a) International Financial Reporting Standards; (b) International Accounting Standards; (c) IFRIC Interpretations; and (d) SIC Interpretations. IFRS Accounting Standards were previously known as International Financial Reporting Standards, IFRS, IFRSs and IFRS Standards. Material information is defined in Appendix A of IFRS 18 Presentation and Disclosure in Financial Statements. Material is used in this Standard with the same meaning. ...

BASIS OF PREPARATION—GENERAL MATTERS

Fair presentation and compliance with IFRS Accounting Standards

	6A	Financial statements shall present fairly the financial position, financial performance and cash flows of an entity. Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the Conceptual Framework for Financial Reporting (Conceptual Framework). The application of IFRSs, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation.
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	6B	An entity whose financial statements comply with IFRS Accounting Standards shall make an explicit and unreserved statement of such compliance in the notes. An entity shall not describe financial statements as complying with IFRS Accounting Standards unless they comply with all the requirements of IFRS Accounting Standards.
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	6C	In virtually all circumstances, an entity achieves a fair presentation by compliance with applicable IFRSs. A fair presentation also requires an entity: (a) to select and apply accounting policies in accordance with this Standard. This Standard sets out a hierarchy of authoritative guidance that management considers in the absence of an IFRS that specifically applies to an item. (b) to present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information. (c) to provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.
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	6D	An entity cannot rectify inappropriate accounting policies either by disclosure of the accounting policies used or by notes or explanatory material.
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	6E	In the extremely rare circumstances in which management concludes that compliance with a requirement in an IFRS would be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework, the entity shall depart from that requirement in the manner set out in paragraph 6F if the relevant regulatory framework requires, or otherwise does not prohibit, such a departure.
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	6F	When an entity departs from a requirement of an IFRS in accordance with paragraph 6E, it shall disclose: (a) that management has concluded that the financial statements present fairly the entity’s financial position, financial performance and cash flows; (b) that it has complied with applicable IFRSs, except that it has departed from a particular requirement to achieve a fair presentation; (c) the title of the IFRS from which the entity has departed, the nature of the departure, including the treatment that the IFRS would require, the reason why that treatment would be so misleading in the circumstances that it would conflict with the objective of financial statements set out in the Conceptual Framework, and the treatment adopted; and (d) for each period presented, the financial effect of the departure on each item in the financial statements that would have been reported in complying with the requirement.
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	6G	When an entity has departed from a requirement of an IFRS in a prior period, and that departure affects the amounts recognised in the financial statements for the current period, it shall make the disclosures set out in paragraphs 6F(c)–6F(d).
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	6H	Paragraph 6G applies, for example, when an entity departed in a prior period from a requirement in an IFRS for the measurement of assets or liabilities and that departure affects the measurement of changes in assets and liabilities recognised in the current period’s financial statements.
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	6I	In the extremely rare circumstances in which management concludes that compliance with a requirement in an IFRS would be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework, but the relevant regulatory framework prohibits departure from the requirement, the entity shall, to the maximum extent possible, reduce the perceived misleading aspects of compliance by disclosing: (a) the title of the IFRS in question, the nature of the requirement, and the reason why management has concluded that complying with that requirement is so misleading in the circumstances that it conflicts with the objective of financial statements set out in the Conceptual Framework; and (b) for each period presented, the adjustments to each item in the financial statements that management has concluded would be necessary to achieve a fair presentation.
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	6J	For the purpose of paragraphs 6E–6I, an item of information would conflict with the objective of financial statements when it does not represent faithfully the transactions, other events and conditions that it either purports to represent or could reasonably be expected to represent and, consequently, it would be likely to influence economic decisions made by users of financial statements. When assessing whether complying with a specific requirement in an IFRS would be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework, management considers: (a) why the objective of financial statements is not achieved in the particular circumstances; and (b) how the entity’s circumstances differ from those of other entities that comply with the requirement. If other entities in similar circumstances comply with the requirement, there is a rebuttable presumption that the entity’s compliance with the requirement would not be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework.

Going concern

	6K	When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so. When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, the entity shall disclose those uncertainties. When an entity does not prepare financial statements on a going concern basis, it shall disclose that fact, together with the basis on which it prepared the financial statements and the reason why the entity is not regarded as a going concern.
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	6L	In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The degree of consideration depends on the facts in each case. When an entity has a history of profitable operations and ready access to financial resources, the entity may reach a conclusion that the going concern basis of accounting is appropriate without detailed analysis. In other cases, management may need to consider a wide range of factors relating to current and expected profitability, debt repayment schedules and potential sources of replacement financing before it can satisfy itself that the going concern basis is appropriate.

Accrual basis of accounting

	6M	An entity shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting.
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	6N	When the accrual basis of accounting is used, an entity recognises items as assets, liabilities, equity, income and expenses (the elements of financial statements) when they satisfy the definitions and recognition criteria for those elements in the Conceptual Framework.

ACCOUNTING POLICIES

Selection and application of accounting policies

...

	11	In making the judgement described in paragraph 10, management shall refer to, and consider the applicability of, the following sources in descending order: ... (b) the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the Conceptual Framework. ...

Disclosure

Disclosure of selection and application of accounting policies