31December 20X3

31 December 20X3  Entity B exercises the call option and the contract is settled net in shares. Entity A has an obligation to deliver CU104,000 (CU104 × 1,000) worth of Entity A’s shares to Entity B in exchange for CU102,000 (CU102 × 1,000) worth of Entity A’s shares. Thus, Entity A delivers the net amount of CU2,000 worth of shares to Entity B, ie 19.2 shares (CU2,000/CU104).   - Cr Equity CU2,000 To record the settlement of the option contract. The settlement is accounted for as an equity transaction. IE20 Assume the same facts as in (a) except that settlement will be made by delivering a fixed number of shares and receiving a fixed amount of cash, if Entity B exercises the option. Similarly to (a) and (b) above, the exercise price per share is fixed at CU102. Accordingly, Entity B has a right to receive 1,000 of Entity A’s own outstanding shares in exchange for CU102,000 (CU102 × 1,000) in cash, if Entity B exercises its option. Entity A records the following journal entries. - Cr Equity CU5,000 To record the cash received in exchange for the obligation to deliver a fixed number of Entity A’s own shares in one year for a fixed price. The premium received is recognised in equity. Upon exercise, the call would result in the issue of a fixed number of shares in exchange for a fixed amount of cash.  No entry is made on 31 December because no cash is paid or received and a contract to deliver a fixed number of Entity A’s own shares in exchange for a fixed amount of cash meets the definition of an equity instrument of the entity.  Entity B exercises the call option and the contract is settled gross. Entity A has an obligation to deliver 1,000 shares in exchange for CU102,000 in cash.   - Dr Cash CU102,000 - Cr Equity CU102,000 IE21 The existence of settlement options (such as net in cash, net in shares or by an exchange of cash and shares) has the result that the call option is a financial liability. It does not meet the definition of an equity instrument because it can be settled otherwise than by Entity A issuing a fixed number of its own shares in exchange for receiving a fixed amount of cash or another financial asset. Entity A recognises a derivative liability, as illustrated in (a) and (b) above. The accounting entry to be made on settlement depends on how the contract is actually settled. Example 5: Purchased put option on shares IE22 This example illustrates the journal entries for a purchased put option on the entity’s own shares that will be settled (a) net in cash, (b) net in shares or (c) by delivering cash in exchange for shares. It also discusses the effect of settlement options (see (d) below).   - Exercise right holder Reporting entity (Entity A) - Market price per share on 31 December 20X2 CU95 - Market price per share on 31 January 20X3 CU95 - Fixed exercise price to be paid on 31 January 20X3 CU98 - Fair value of option on 31 December 20X2 CU4,000 - Fair value of option on 31 January 20X3 CU3,000 IE23 On 1 February 20X2, Entity A enters into a contract with Entity B that gives Entity A the right to sell, and Entity B the obligation to buy the fair value of 1,000 of Entity A’s own outstanding ordinary shares as of 31 January 20X3 at a strike price of CU98,000 (ie CU98 per share) on 31 January 20X3, if Entity A exercises that right. The contract will be settled net in cash. If Entity A does not exercise its right, no payment will be made. Entity A records the following journal entries.  The price per share when the contract is agreed on 1 February 20X2 is CU100. The initial fair value of the option contract on 1 February 20X2 is CU5,000, which Entity A pays to Entity B in cash on that date. On that date, the option has no intrinsic value, only time value, because the exercise price of CU98 is less than the market price per share of CU100. Therefore it would not be economic for Entity A to exercise the option. In other words, the put option is out of the money.   - Dr Put option asset CU5,000 To recognise the purchased put option.  On 31 December 20X2 the market price per share has decreased to CU95. The fair value of the put option has decreased to CU4,000, of which CU3,000 is intrinsic value ([CU98 – CU95] × 1,000) and CU1,000 is the remaining time value.   - Cr Put option asset CU1,000  On 31 January 20X3 the market price per share is still CU95. The fair value of the put option has decreased to CU3,000, which is all intrinsic value ([CU98 – CU95] × 1,000) because no time value remains.   - Cr Put option asset CU1,000 To record the decrease in the fair value of the option. On the same day, Entity A exercises the put option and the contract is settled net in cash. Entity B has an obligation to deliver CU98,000 to Entity A and Entity A has an obligation to deliver CU95,000 (CU95 × 1,000) to Entity B, so Entity B pays the net amount of CU3,000 to Entity A.   - Dr Cash CU3,000 - Cr Put option asset CU3,000 IE24 Assume the same facts as in (a) except that settlement will be made net in shares instead of net in cash. Entity A’s journal entries are the same as shown in (a), except:  Entity A exercises the put option and the contract is settled net in shares. In effect, Entity B has an obligation to deliver CU98,000 worth of Entity A’s shares to Entity A, and Entity A has an obligation to deliver CU95,000 worth of Entity A’s shares (CU95 × 1,000) to Entity B, so Entity B delivers the net amount of CU3,000 worth of shares to Entity A, ie 31.6 shares (CU3,000/CU95).   - Dr Equity CU3,000 - Cr Put option asset CU3,000 IE25 Assume the same facts as in (a) except that settlement will be made by receiving a fixed amount of cash and delivering a fixed number of Entity A’s shares, if Entity A exercises the option. Similarly to (a) and (b) above, the exercise price per share is fixed at CU98. Accordingly, Entity B has an obligation to pay CU98,000 in cash to Entity A (CU98 × 1,000) in exchange for 1,000 of Entity A’s outstanding shares, if Entity A exercises its option. Entity A records the following journal entries. - Dr Equity CU5,000 To record the cash received in exchange for the right to deliver Entity A’s own shares in one year for a fixed price. The premium paid is recognised directly in equity. Upon exercise, it results in the issue of a fixed number of shares in exchange for a fixed price.  No entry is made on 31 December because no cash is paid or received and a contract to deliver a fixed number of Entity A’s own shares in exchange for a fixed amount of cash meets the definition of an equity instrument of Entity A.  Entity A exercises the put option and the contract is settled gross. Entity B has an obligation to deliver CU98,000 in cash to Entity A in exchange for 1,000 shares. - Dr Cash CU98,000 - Cr Equity CU98,000 IE26 The existence of settlement options (such as net in cash, net in shares or by an exchange of cash and shares) has the result that the put option is a financial asset. It does not meet the definition of an equity instrument because it can be settled otherwise than by Entity A issuing a fixed number of its own shares in exchange for receiving a fixed amount of cash or another financial asset. Entity A recognises a derivative asset, as illustrated in (a) and (b) above. The accounting entry to be made on settlement depends on how the contract is actually settled. Example 6: Written put option on shares IE27 This example illustrates the journal entries for a written put option on the entity’s own shares that will be settled (a) net in cash, (b) net in shares or (c) by delivering cash in exchange for shares. It also discusses the effect of settlement options (see (d) below).   - Exercise right holder Counterparty - (Entity B) - Market price per share on 31 December 20X2 CU95 - Market price per share on 31 January 20X3 CU95 - Fixed exercise price to be paid on 31 January 20X3 CU98 - Present value of exercise price on 1 February 20X2 CU95 - Fair value of option on 31 December 20X2 CU4,000 - Fair value of option on 31 January 20X3 CU3,000 IE28 Assume the same facts as in Example 5(a) above, except that Entity A has written a put option on its own shares instead of having purchased a put option on its own shares. Accordingly, on 1 February 20X2, Entity A enters into a contract with Entity B that gives Entity B the right to receive and Entity A the obligation to pay the fair value of 1,000 of Entity A’s outstanding ordinary shares as of 31 January 20X3 in exchange for CU98,000 in cash (ie CU98 per share) on 31 January 20X3, if Entity B exercises that right. The contract will be settled net in cash. If Entity B does not exercise its right, no payment will be made. Entity A records the following journal entries. - Cr Put option liability CU5,000 To recognise the written put option. - Dr Put option liability CU1,000 - Dr Put option liability CU1,000 On the same day, Entity B exercises the put option and the contract is settled net in cash. Entity A has an obligation to deliver CU98,000 to Entity B, and Entity B has an obligation to deliver CU95,000 (CU95 × 1,000) to Entity A. Thus, Entity A pays the net amount of CU3,000 to Entity B. - Dr Put option liability CU3,000 - Cr Cash CU3,000 IE29 Assume the same facts as in (a) except that settlement will be made net in shares instead of net in cash. Entity A’s journal entries are the same as those in (a), except for the following:  Entity B exercises the put option and the contract is settled net in shares. In effect, Entity A has an obligation to deliver CU98,000 worth of shares to Entity B, and Entity B has an obligation to deliver CU95,000 worth of Entity A’s shares (CU95 × 1,000) to Entity A. Thus, Entity A delivers the net amount of CU3,000 worth of Entity A’s shares to Entity B, ie 31.6 shares (3,000/95). - Dr Put option liability CU3,000 - Cr Equity CU3,000 To record the settlement of the option contract. The issue of Entity A’s own shares is accounted for as an equity transaction. IE30 Assume the same facts as in (a) except that settlement will be made by delivering a fixed amount of cash and receiving a fixed number of shares, if Entity B exercises the option. Similarly to (a) and (b) above, the exercise price per share is fixed at CU98. Accordingly, Entity A has an obligation to pay CU98,000 in cash to Entity B (CU98 × 1,000) in exchange for 1,000 of Entity A’s outstanding shares, if Entity B exercises its option. Entity A records the following journal entries. - Cr Equity CU5,000 To recognise the option premium received of CU5,000 in equity. - Dr Equity CU95,000 - Cr Liability CU95,000 To recognise the present value of the obligation to deliver CU98,000 in one year, ie CU95,000, as a liability. - Dr Interest expense CU2,750 - Cr Liability CU2,750 - Dr Interest expense CU250 - Cr Liability CU250 On the same day, Entity B exercises the put option and the contract is settled gross. Entity A has an obligation to deliver CU98,000 in cash to Entity B in exchange for CU95,000 worth of shares (CU95 × 1,000). - Dr Liability CU98,000 - Cr Cash CU98,000 IE31 The existence of settlement options (such as net in cash, net in shares or by an exchange of cash and shares) has the result that the written put option is a financial liability. If one of the settlement alternatives is to exchange cash for shares ((c) above), Entity A recognises a liability for the obligation to deliver cash, as illustrated in (c) above. Otherwise, Entity A accounts for the put option as a derivative liability. Entities such as mutual funds and co-operatives whose share capital is not equity as defined in AASB 132 Example 7: Entities with no equity IE32 The following example illustrates a format of a statement of comprehensive income and statement of financial position that may be used by entities such as mutual funds that do not have equity as defined in AASB 132. Other formats are possible. - Statement of comprehensive income for the year ended 31 December 20X1 - CU CU - Revenue 2,956 1,718 - Expenses (classified by nature or function) (644) (614) - Profit from operating activities 2,312 1,104 - Finance costs - – other finance costs (47) (47) - – distributions to unitholders (50) (50) - Change in net assets attributable to unitholders 2,215 1,007   - Statement of financial position at 31 December 20X1 - CU CU CU CU - ASSETS - Non-current assets (classified in accordance with AASB 101) 91,374 78,484 - Total non-current assets 91,374 78,484 - Current assets (classified in accordance with AASB 101) 1,422 1,769 - Total current assets 1,422 1,769 - Total assets 92,796 80,253 - LIABILITIES - Current liabilities (classified in accordance with AASB 101) 647 66 - Total current liabilities (647) (66) - Non-current liabilities excluding net assets attributable to unitholders (classified in accordance with AASB 101) 280 136 - (280) (136) - Net assets attributable to unitholders 91,869 80,051 Example 8: Entities with some equity IE33 The following example illustrates a format of a statement of comprehensive income and statement of financial position that may be used by entities whose share capital is not equity as defined in AASB 132 because the entity has an obligation to repay the share capital on demand but does not have all the features or meet the conditions in paragraphs 16A and 16B or paragraphs 16C and 16D. Other formats are possible. - Statement of comprehensive income for the year ended 31 December 20X1 - CU CU - Revenue 472 498 - Expenses (classified by nature or function) (367) (396) - Profit from operating activities 105 102 - Finance costs - – other finance costs (4) (4) - – distributions to members (50) (50) - Change in net assets attributable to members 51 48   - Statement of financial position at 31 December 20X1 - CU CU CU CU - ASSETS - Non-current assets (classified in accordance with AASB 101) 908 830 - Total non-current assets 908 830 - Current assets (classified in accordance with AASB 101) 383 350 - Total current assets 383 350 - Total assets 1,291 1,180 - LIABILITIES - Current liabilities (classified in accordance with AASB 101) 372 338 - Share capital repayable on demand 202 161 - Total current liabilities (574) (499) - Total assets less current liabilities 717 681 - Non-current liabilities (classified in accordance with AASB 101) 187 196 - (187) (196) - OTHER COMPONENTS OF EQUITY(a) - Reserves eg revaluation surplus, retained earnings etc 530 485 - 530 485 - 717 681 - MEMORANDUM NOTE – Total members’ interests - Share capital repayable on demand 202 161 - Reserves 530 485 - 732 646 - (a) In this example, the entity has no obligation to deliver a share of its reserves to its members.   Accounting for compound financial instruments Example 9: Separation of a compound financial instrument on initial recognition IE34 Paragraph 28 describes how the components of a compound financial instrument are separated by the entity on initial recognition. The following example illustrates how such a separation is made. IE35 An entity issues 2,000 convertible bonds at the start of year 1. The bonds have a three-year term, and are issued at par with a face value of CU1,000 per bond, giving total proceeds of CU2,000,000. Interest is payable annually in arrears at a nominal annual interest rate of 6 per cent. Each bond is convertible at any time up to maturity into 250 ordinary shares. When the bonds are issued, the prevailing market interest rate for similar debt without conversion options is 9 per cent. IE36 The liability component is measured first, and the difference between the proceeds of the bond issue and the fair value of the liability is assigned to the equity component. The present value of the liability component is calculated using a discount rate of 9 per cent, the market interest rate for similar bonds having no conversion rights, as shown below. | | CU | | Present value of the principal – CU2,000,000 payable at the end of three years | 1,544,367 | | Present value of the interest – CU120,000 payable annually in arrears for three years | 303,755 | | Total liability component | 1,848,122 | | Equity component (by deduction) | 151,878 | | Proceeds of the bond issue | 2,000,000 | Example 10: Separation of a compound financial instrument with multiple embedded derivative features IE37 The following example illustrates the application of paragraph 31 to the separation of the liability and equity components of a compound financial instrument with multiple embedded derivative features. IE38 Assume that the proceeds received on the issue of a callable convertible bond are CU60. The value of a similar bond without a call or equity conversion option is CU57. Based on an option pricing model, it is determined that the value to the entity of the embedded call feature in a similar bond without an equity conversion option is CU2. In this case, the value allocated to the liability component under paragraph 31 is CU55 (CU57 – CU2) and the value allocated to the equity component is CU5 (CU60 – CU55). Example 11: Repurchase of a convertible instrument IE39 The following example illustrates how an entity accounts for a repurchase of a convertible instrument. For simplicity, at inception, the face amount of the instrument is assumed to be equal to the aggregate carrying amount of its liability and equity components in the financial statements, ie no original issue premium or discount exists. Also, for simplicity, tax considerations have been omitted from the example. IE40 On 1 January 20X0, Entity A issued a 10 per cent convertible debenture with a face value of CU1,000 maturing on 31 December 20X9. The debenture is convertible into ordinary shares of Entity A at a conversion price of CU25 per share. Interest is payable half-yearly in cash. At the date of issue, Entity A could have issued non-convertible debt with a ten-year term bearing a coupon interest rate of 11 per cent. IE41 In the financial statements of Entity A the carrying amount of the debenture was allocated on issue as follows: | | CU | | Liability component | | | Present value of 20 half-yearly interest payments of CU50, discounted at 11% | 597 | | Present value of CU1,000 due in 10 years, discounted at 11%, compounded half-yearly | 343 | | | 940 | | Equity component | | | (difference between CU1,000 total proceeds and CU940 allocated above) | 60 | | Total proceeds | 1,000 |   IE42 On 1 January 20X5, the convertible debenture has a fair value of CU1,700. IE43 Entity A makes a tender offer to the holder of the debenture to repurchase the debenture for CU1,700, which the holder accepts. At the date of repurchase, Entity A could have issued non-convertible debt with a five-year term bearing a coupon interest rate of 8 per cent. IE44 The repurchase price is allocated as follows: - Carrying value Fair value Difference - Liability component: CU CU CU - Present value of 10 remaining half-yearly interest payments of CU50, discounted at 11% and 8%, respectively 377 405 - Present value of CU1,000 due in 5 years, discounted at 11% and 8%, compounded half-yearly, respectively 585 676 - 962 1,081 (119) - Equity component 60 619(a) (559) - Total 1,022 1,700 (678) - (a) This amount represents the difference between the fair value amount allocated to the liability component and the repurchase price of CU1,700. IE45 Entity A recognises the repurchase of the debenture as follows:   - Dr Liability component CU962 - Dr Debt settlement expense (profit or loss) CU119 - Cr Cash CU1,081 To recognise the repurchase of the liability component.   - Dr Equity CU619 - Cr Cash CU619 To recognise the cash paid for the equity component. IE46 The equity component remains as equity, but may be transferred from one line item within equity to another. Example 12: Amendment of the terms of a convertible instrument to induce early conversion IE47 The following example illustrates how an entity accounts for the additional consideration paid when the terms of a convertible instrument are amended to induce early conversion. IE48 On 1 January 20X0, Entity A issued a 10 per cent convertible debenture with a face value of CU1,000 with the same terms as described in Example 11. On 1 January 20X1, to induce the holder to convert the convertible debenture promptly, Entity A reduces the conversion price to CU20 if the debenture is converted before 1 March 20X1 (ie within 60 days). IE49 Assume the market price of Entity A’s ordinary shares on the date the terms are amended is CU40 per share. The fair value of the incremental consideration paid by Entity A is calculated as follows:   - Number of ordinary shares to be issued to debenture holders under amended conversion terms: - Face amount CU1,000 - New conversion price /CU20 per share - Number of ordinary shares to be issued on conversion 50 shares - Number of ordinary shares to be issued to debenture holders under original conversion terms: - Face amount CU1,000 - Original conversion price /CU25 per share - Number of ordinary shares to be issued on conversion 40 shares - Number of incremental ordinary shares issued upon conversion 10 shares - Value of incremental ordinary shares issued upon conversion - CU40 per share x 10 incremental shares CU400   IE50 The incremental consideration of CU400 is recognised as a loss in profit or loss.   Compilation details Accounting Standard AASB 132 Financial Instruments: Presentation (as amended) Compilation details are not part of AASB 132. This compiled Standard applies to annual periods beginning on or after 1 January 2023 but before 1 July 2026.  It takes into account amendments up to and including 15 December 2022 and was prepared on 6 April 2023 by the staff of the Australian Accounting Standards Board (AASB). This compilation is not a separate Accounting Standard made by the AASB.  Instead, it is a representation of AASB 132 (August 2015) as amended by other Accounting Standards, which are listed in the table below. Table of Standards | Standard | Date made | FRL identifier | Commence-ment date | Effective date (annual periods … on or after …) | Application, saving or transitional provisions | | --- | --- | --- | --- | --- | --- | | AASB 132 | 7 Aug 2015 | F2015L01605 | 31 Dec 2017 | (beginning) 1 Jan 2018 | see (a) below | | AASB 16 | 23 Feb 2016 | F2016L00233 | 31 Dec 2018 | (beginning) 1 Jan 2019 | see (b) below | | AASB 2016-7 | 9 Dec 2016 | F2017L00043 | 31 Dec 2016 | (beginning) 1 Jan 2017 | see (c) below | | AASB 17 | 19 Jul 2017 | F2017L01184 | 31 Dec 2022 | (beginning) 1 Jan 2023 | see (d) below | | AASB 2019-1 | 21 May 2019 | F2019L00966 | 31 Dec 2019 | (beginning) 1 Jan 2020 | see (e) below | | AASB 2021-7 | 20 Dec 2021 | F2021L01883 | 31 Dec 2021 | (beginning) 1 Jan 2022 | see (f) below | | AASB 2022-8 | 15 Dec 2022 | F2023L00014 | 31 Dec 2022 | (beginning) 1 Jan 2023 | see (g) below | | AASB 2022-9 | 15 Dec 2022 | F2023L00015 | 30 Jun 2026 | (beginning) 1 Jul 2026 | not compiled* | * The amendments made by this Standard are not included in this compilation, which presents the principal Standard as applicable to annual periods beginning on or after 1 January 2023 but before 1 July 2026. (a)           Entities may elect to apply this Standard to periods beginning after 24 July 2014 but before 1 January 2018. (b)           Entities may elect to apply this Standard to annual periods beginning before 1 January 2019, provided that AASB 15 Revenue from Contracts with Customers is also applied to the same period. (c)           AASB 2016-7 deferred the effective date of AASB 15 (and its consequential amendments in AASB 2014-5) for not-for-profit entities to annual reporting periods beginning on or after 1 January 2019, instead of 1 January 2018.  However, earlier application of AASB 132 (2015) incorporating the text that relates to AASB 15 is permitted, provided that AASB 15 is also applied. (d)           Entities may elect to apply this Standard to annual periods beginning before 1 January 2023, provided that AASB 9 Financial Instruments is also applied on or before the date of initial application of AASB 17. (AASB 17 was amended prior to its mandatory application by various amending Standards, including AASB 2022-8 Amendments to Australian Accounting Standards – Insurance Contracts: Consequential Amendments, made by the AASB on 15 December 2022.) (e)           Entities may elect to apply this Standard to annual periods beginning before 1 January 2020. (f)            Entities may elect to apply this Standard to annual periods beginning before 1 January 2022. (g)           Entities may elect to apply this Standard to annual periods beginning before 1 January 2023. Table of amendments | Paragraph affected | How affected | By … [paragraph/page] | | --- | --- | --- | | AusCF1 | added | AASB 2019-1 [page 21] | | 4 | amended | AASB 17 [page 80] | | Aus4.1-Aus4.2 | added | AASB 2022-8 [page 11] | | 33A | added | AASB 17 [page 81] | | 97S | added | AASB 16 [page 52] | | 97T | added | AASB 17 [page 81] | | Aus100.1 | repealed | Legislation Act 2003, s. 48D | | AG8 | amended | AASB 17 [page 82] | | AusAG8.1 | added | AASB 2022-8 [page 11] | | AG9 | amended | AASB 16 [page 52] | | AG10 | amended | AASB 16 [page 53] | | AG36 (and heading) | amended | AASB 17 [page 82] | | AG38A | amended | AASB 2021-7 [35] |   Deleted IAS 32 text Deleted IAS 32 text is not part of AASB 132. 97A IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraph 40. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period. 97D Paragraph 4 was amended by Improvements to IFRSs issued in May 2008. An entity shall apply that amendment for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies the amendment for an earlier period it shall disclose that fact and apply for that earlier period the amendments to paragraph 3 of IFRS 7, paragraph 1 of IAS 28 and paragraph 1 of IAS 31 issued in May 2008. An entity is permitted to apply the amendment prospectively. 97E Paragraphs 11 and 16 were amended by Classification of Rights Issues issued in October 2009. An entity shall apply that amendment for annual periods beginning on or after 1 February 2010. Earlier application is permitted. If an entity applies the amendment for an earlier period, it shall disclose that fact. 97I IFRS 10 and IFRS 11 Joint Arrangements, issued in May 2011, amended paragraphs 4(a) and AG29. An entity shall apply those amendments when it applies IFRS 10 and IFRS 11. 97J IFRS 13, issued in May 2011, amended the definition of fair value in paragraph 11 and amended paragraphs 23 and AG31. An entity shall apply those amendments when it applies IFRS 13. 97K Presentation of Items of Other Comprehensive Income (Amendments to IAS 1), issued in June 2011, amended paragraph 40. An entity shall apply that amendment when it applies IAS 1 as amended in June 2011. 97L Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32), issued in December 2011, deleted paragraph AG38 and added paragraphs AG38A–AG38F. An entity shall apply those amendments for annual periods beginning on or after 1 January 2014. An entity shall apply those amendments retrospectively. Earlier application is permitted. If an entity applies those amendments from an earlier date, it shall disclose that fact and shall also make the disclosures required by Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011. 97M Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7), issued in December 2011, amended paragraph 43 by requiring an entity to disclose the information required in paragraphs 13B–13E of IFRS 7 for recognised financial assets that are within the scope of paragraph 13A of IFRS 7. An entity shall apply that amendment for annual periods beginning on or after 1 January 2013 and interim periods within those annual periods. An entity shall provide the disclosures required by this amendment retrospectively. 97N Annual Improvements 2009–2011 Cycle, issued in May 2012, amended paragraphs 35, 37 and 39 and added paragraph 35A. An entity shall apply that amendment retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors for annual periods beginning on or after 1 January 2013. Earlier application is permitted. If an entity applies that amendment for an earlier period it shall disclose that fact. 97O Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), issued in October 2012, amended paragraph 4. An entity shall apply that amendment for annual periods beginning on or after 1 January 2014. Earlier application of Investment Entities is permitted. If an entity applies that amendment earlier it shall also apply all amendments included in Investment Entities at the same time.