BC93 The Board decided not to require retrospective application of the amendments in accordance with IAS 8. Instead, it decided to require entities to apply the amendments for the first time by recognising deferred tax for all temporary differences related to leases and decommissioning obligations at the beginning of the earliest comparative period presented. It concluded that these requirements appropriately balance expected benefits and costs. Retrospective application would require entities to retrospectively assess whether each lease and decommissioning obligation gave rise to equal taxable and deductible temporary differences on initial recognition, which could have occurred a long time ago. The Board concluded that its transition approach would, therefore, make the amendments easier and less costly to apply than a full retrospective approach, while still achieving their objective. Such an approach also prevents any uncertainty about how the amendments interact with the transition requirements in IFRS 16.

BC94 The Board also required entities to apply the amendments prospectively to transactions other than leases and decommissioning obligations (that is, to such transactions that occur on or after the beginning of the earliest comparative period presented). Were the amendments to be applied retrospectively, determining whether such transactions are in the scope of the amendments and then reconsidering the accounting for those transactions could be costly and complex. The Board concluded that the costs of requiring entities to apply the amendments retrospectively for those other transactions would outweigh the benefits of doing so.