10.1. Application of amendments to standards
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous contracts - costs of fulfilling a contract
As of 1 January 2022, the amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts – Cost of Fulfilling a Contract entered into force, which clarify that in the case of onerous contracts, the costs of fulfilling the contract comprise both the incremental costs of fulfilling the contract, e.g. labour and materials, as well as the allocation of other costs that relate directly to fulfilling the contracts (for example, the allocation of depreciation charges to an item of property, plant and equipment used, inter alia, to fulfil this contract). At the same time, in accordance with the transitional provisions, the aforementioned amendments to the standard apply to agreements for which the entity has not yet fulfilled all the obligations, at the beginning of the annual reporting period in which it applies the amendments for the first time, i.e. the period commencing on 1 January 2022. The entity does not restate comparative figures – the cumulative effect of the first application of the amendments is recognized as an adjustment to the opening balance of retained earnings at the date of first application.
As at the date of 31 December 2022, the Group calculated the provisions for onerous contracts in accordance with the revised wording of the standard. At the same time, the Group assessed that the above amendment to IAS 37 Provisions, Contingent Liabilities and Contingent Assets has no impact on the figures as at 1 January 2022 and does not require the impact to be recognized in the Group’s equity.
According to the Management Board, the following changes to standards have not materially affected the accounting policy applied so far:
| Standard | Amendments | Date of entry into force in the EU (annual periods staring on or after that date) |
|---|---|---|
| Amendments to IFRS 3 Business Combinations: Amendments to the references to the Conceptual Framework | Among others, the amendments replaced the reference to the previous version of the Conceptual Framework issued by the IASB (the 1989 Conceptual Framework) with reference to the current version published in March 2018, without significantly changing the requirements contained therein. | 1 January 2022 |
| Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use | The amendments prohibit the reduction of the cost of an item of property, plant and equipment by the proceeds from the sale of products manufactured in the course of bringing the asset to the intended location and condition needed for it to become operational. Instead, the entity recognizes the revenue from the sale of such products and the costs of manufacturing them in the statement of comprehensive income. | 1 January 2022 |
| Amendments to various standards Improvements to IFRSs (2018-2020 cycle): | ||
| IFRS 1 First-time Adoption of International Financial Reporting Standards | The amendment allows the subsidiary that decides to apply paragraph D16(a) of IFRS 1 First-time Adoption of International Financial Reporting Standards to measure the cumulative translation differences using the amounts reported in the parent company’s consolidated financial statements, based on the parent company’s date of transition to IFRS. This change also applies to an associate or joint venture. | 1 January 2022 |
| IFRS 9 Financial Instruments | The amendment clarifies the fees that an entity considers when assessing whether the terms of a new or modified financial liability differ significantly from the terms of the original financial liability. | 1 January 2022 |
| IFRS 16 Leasing | The amendment repeals illustrative example No. 13 concerning payments from the lessor relating to investments in the leased property. This will allow to avoid ambiguity in the scope of approach to lease incentives when applying IFRS 16 Leases. | 1 January 2022 |
| IAS 41 Agriculture | The amendment removes the requirement for entities to exclude taxation payments when measuring the fair value of assets included in the scope of IAS 41 Agriculture. | 1 January 2022 |