European Commission Endorses Amendment to IAS 40

Amendments to IAS 40 Investment Property (Transfers of Investment Property) has been endorsed by the European Union.

The Amendments to IAS 40, which were originally issued by the International Accounting Standards Board (IASB) in December 2016, reinforces the principle in IAS 40 that a change in use would involve.  Specifically the amendments clarify that a change in management’s intentions for the use of a property does not in isolation provide evidence of a change in use. The amendment also re-characterised the list of circumstances in paragraph 57 of IAS 40 as non-exhaustive examples of circumstances which would evidence a change in use

The amendments to IAS 40 apply to periods beginning on or after 1 January 2018, with application in earlier accounting periods permitted.

The current endorsement status of all standards, amendments to standards, and interpretations issued by the IASB is available from the European Financial Reporting Advisory Group’s (EFRAG’s) web site here.