This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print page

What's new in the June 2009 financial reporting cycle?


DOWNLOAD  

Deloitte Accounting alert imageThe information on this page was last updated on 13 August 2009 for developments to that date - we will update this page if any significant developments occur in the period to 30 September 2009.

The analysis below provides a high level overview of new and revised financial reporting requirements that need to be considered for financial reporting periods ending on 30 June 2009. Entities can use this listing to perform a quick check that all the new financial reporting requirements have been fully considered as part of their June reporting close process.

The information below is organised as follows:

You can also download a printable PDF version of this information at the bottom of the page.


Top

What are the big picture issues for June 2009?

Key overall considerations

The key considerations for June 2009 include:

  • the direct and indirect impacts of the global financial crisis on financial reporting, including areas such as determining fair value and impairment, classification of debt as current or non-current, foreign exchange exposures, off-balance sheet arrangements and associated disclosure requirements such as those required by AASB 7 - particularly in light of ASIC's stated intention to focus on these areas. More information can be found on our dedicated 'credit crunch' page on our IAS Plus website, Accounting alert 2008/14 'Financial reporting developments from the credit crunch', our publication Turbulent times: Key accounting considerations in today's volatile markets (PDF 172k) and ASIC press release 'ASIC review of 30 June 2009 financial reports'.
  • the financial reporting impacts of the proposed Carbon Pollution Reduction Scheme (CPRS) in areas such as impairment, disclosure of uncertainties, hedging programs and provisions and contingent liabilities. More information can be found in Accounting alert 2009/03
  • the direct and indirect financial reporting impacts of other major government changes or proposals, such as the Taxation of Financial Arrangements (TOFA) rules now part of tax law, accounting for the Federal Government stimulus packages, the recently released proposed tax consolidation amendments, outcomes of state, federal and other jurisdiction budgets and so on
  • for ASX listed entities, a continued focus on improving remuneration report disclosures, particularly in light of continued shareholder activism in this area. Further information on this can be found in Accounting alert 2008/08and our Deloitte Australia Insight podcast 'Justifying executive compensation in the current environment'.

More detailed information about these topics and for illustrative disclosures, refer to our June 2009 illustrative annual report and June 2009 illustrative half-year report.

Major new requirements for annual reports

In light of the pervasive impacts that the global financial crisis has under IFRS, it is fortunate that there are not a large number of new and revised pronouncements that must be applied for the first time in 30 June 2009 full-year reports. In summary terms, the new requirements are:

  • Interpretations (and the associated amending and 'service' standards), dealing with service concession arrangements, customer loyalty programmes and defined benefit assets (see Interpretations below)
  • the effect of amendments arising from the IASB's response to the global financial crisis (discussed above)
  • for ASX listed entities, the revised Corporate Governance Principles and the new non-authoritative guidance on 'non-statutory profit' (discussed below)
  • for public sector and not-for-profit entities - a suite of new Standards and Interpretations apply for the first time as a result of the AASB's GAAP-GFS convergence project and other revisions (discussed below).

Preparers of full-year financial statements may wish to early adopt some of the Standards that form 'the next wave of IFRS', which in some cases may be advantageous, e.g. AASB 8 Operating Segments permits certain entities to no longer prepare segment information provided that they do not have instruments traded in a public market . Furthermore, with the IASB continuing to 'tinker' with various accounting pronouncements in response to the global financial crisis, some new requirements may be considered good guidance or best practice under existing standards, e.g. the amendments to AASB 7 Financial Instruments to improve disclosures of financial instruments.

Half-year reports and the next wave of IFRS

Unlike for full-year reports, the June 2009 reporting season heralds the beginning of the 'the next wave of IFRS' for those entities that are reporting for their half-years (i.e. entities with December year-ends). There are numerous changes that will have a substantial impact in half-year financial reports.

Key areas that need to be considered include:

  • recognition and measurement - examples include mandatory capitalisation of borrowing costs for qualifying assets, elimination of the 'pre-acquisition dividend' concept, clarification on the nature of vesting conditions and cancellations of share-based payments, accounting for real estate sales and construction of investment property, customer loyalty programmes and changes in government grant accounting
  • presentation - requirement to classify certain puttable instruments and obligations arising on liquidation as equity
  • disclosure - new layout and terminology for financial statements for interim periods, consistent with the revised version of AASB 101 Presentation of Financial Statements and, for listed and similar entities, half-year disclosures under AASB 8 Operating Segments.

More detailed information, refer to our June 2009 illustrative half-year report, which includes an analysis of key focus areas, a summary of the interim reporting requirements, illustrative financial statements and checklists.


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

What are the new and revised accounting pronouncements for June 2009?

The tables below outline the new and revised pronouncements that are to be applied for the first time at 30 June 2009, or which may be early adopted at that date.

In the majority of cases, the disclosure requirements of the pronouncements listed in the tables below would not be applicable to half-year financial reports. However, where relevant, the recognition and measurement requirements of any relevant pronouncements would be applied where those pronouncements have been adopted by the entity.

As occurs so often with changes to accounting standards and financial reporting requirements, some of the other new or revised pronouncements listed in the tables below may have a substantial impact on particular entities. Therefore, it is important that the pronouncements listed are carefully reviewed for any potential impacts or opportunities.

Where early adoption is being contemplated, it is important to address any necessary procedural requirements, e.g. for entities reporting under the Corporations Act 2001, appropriate director's resolutions for early adoption must be made under s.334(5).

In addition, the disclosure requirements required in relation to new and revised accounting pronouncements need to be carefully considered even where they have not yet been adopted. Read more...


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

New and revised IFRS-equivalent Standards

New or revised requirement When effective 30 June 2009 applicability More information
Full years Half years

AASB 101 Presentation of Financial Statements (revised September 2007), AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101
The main changes from the previous version of AASB 101 are to require that an entity must:

  • present all non-owner changes in equity ('comprehensive income') either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income may not be presented in the statement of changes in equity
  • present an additional statement of financial position (balance sheet) as at the beginning of the earliest comparative period when the entity applies an accounting policy retrospectively, makes a retrospective restatement, or reclassifies items in its financial statements (this would generally mean that three balance sheets are presented in these circumstances)
  • disclose income tax relating to each component of other comprehensive income
  • disclose reclassification adjustments relating to components of other comprehensive income.

In what many Australian constituents may consider a 'back to the future' change, AASB 101 amends the titles of financial statements as follows:

  • 'balance sheet' will become 'statement of financial position'
  • 'income statement' will become part of the 'statement of comprehensive income', unless a separate income statement is presented
  • 'cash flow statement' will become 'statement of cash flows'.

Note: The AASB has also released a revised version of AASB 1039 'Concise Financial Reports' to ensure consistency with this Standard. AASB 1049 has also been amended by AASB 2008-9 to achieve consistency with this version of AASB 101. See Domestic Standards below for more details.

Applies to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory Accounting alert 2007/16

IAS Plus Newsletter (September 2007, PDF 119kb)

AASB 123 Borrowing Costs (revised), AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123
AASB 123 is equivalent to IAS 23 of the same name and eliminates the option of expensing borrowing costs related to qualifying assets, instead requiring capitalisation.

Transitional provisions require prospective application to borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after the application date. However, an entity may designate any date before the application date and apply the Standard to borrowing costs relating to all qualifying assets for which the commencement date for capitalisation is on or after that date. The Amending Standard eliminates reference to the expensing option in various other pronouncements.

Note: See also AASB 2009-1 Amendments to Australian Accounting Standards - Borrowing Costs of Not-for-Profit Public Sector Entities.

Annual reporting periods beginning on or after 1 January 2009 Optional Mandatory Accounting alert 2007/10

IAS Plus Newsletter (April 2007, 99kb)

[NEW] AASB 1 First-time Adoption of Australian Accounting Standards (May 2009)

A new version of AASB 1 resulting from the IASB's 2007 annual improvements process which retains the substance of the previous version, but within a changed structure to make it easier for the reader to understand and to better accommodate future changes.

Applies to an entity's first Australian-Accounting-Standards financial statements for reporting periods beginning on or after 1 July 2009. n/a
(optional only for first-time adopters)
n/a
(optional only for first-time adopters)
IAS Plus Newsletter [updated] (December 2008, PDF 113kb)

AASB 3 Business Combinations (2008), AASB 127 Consolidated and Separate Financial Statements, AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 and AASB 2008-11 Amendments to Australian Accounting Standard - Business Combinations Among Not-for-Profit Entities

Revised standards resulting from the joint IASB-FASB Business Combinations Phase II project, equivalent to revised IFRS 3 Business Combinations and IAS 27 Consolidated and Separate Financial Statements. Alters the manner in which business combinations and changes in ownership interests in subsidiaries are accounted for. There are also consequential amendments to other standards effected through AASB 2008-3, most notably AASB 128 Investments in Associates and AASB 131 Interests in Joint Ventures.

AASB 2008-11 confirms that business combinations involving not-for-profit entities are within the scope of AASB 3. This has the effect of requiring assets acquired in a merger of not-for-profit entities to be re-measured, normally at fair value, as at the date of the merger (with special rules for local governments).

[UPDATE] Note: An entity early adopting AASB 3(2008) must also apply the consequential amendments to AASB 2, AASB 138 and Interpretation 9 included in AASB 2009-4

AASB 3 - applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009

AASB 127 - amendments generally apply prospectively to annual reporting periods beginning on or after 1 July 2009

AASB 2008-3 and AASB 2008-11 - applies to annual reporting periods beginning on or after 1 July 2009

Optional Optional

Accounting alert 2008/03

Accounting alert 2008/01

Deloitte Australia Insights podcast

IAS Plus Newsletter (January 2008, PDF 122kb)

IAS Plus project page

AASB 8 Operating Segments, AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8
AASB 8 replaces AASB 114 Segment Reporting and introduces a new 'management approach' to segment reporting to align IFRS with US-GAAP. Unlike AASB 114, AASB 8 only applies to entities which have on issue any debt or equity securities that are traded in a public market (or which are in the process of issuing any class of instruments in a public market). Therefore, reporting entities that are out of scope of AASB 8 may wish to early adopt this Standard to avoid segment reporting in their financial reports.

The AASB has released a revised version of AASB 1039 'Concise Financial Reports' to ensure consistency with this Standard. See Domestic Standards below for more details.

Applies to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory (specific disclosures required in interim reports under AASB 134)

IAS Plus Newsletter(December 2006, 113kb)

Accounting alert 2007/04


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

New or revised domestic Standards

New or revised requirement When effective 30 June 2009 applicability More information
Full years Half years
AASB 1004 Contributions (revised)
This Standard applies to not-for-profit entities (reporting entities and general purpose financial reports) and the financial statements of the General Government Sectors (prepared in accordance with AASB 1049). The revisions have the effect of relocating the requirements on contributions from AASs 27, 29 and 31, substantively unamended (with some exceptions), into AASB 1004.
Applies on a retrospective basis to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/19

Accounting alert 2007/20

AASB 1039 Concise Financial Reports (revised)
Revised AASB 1039 that incorporates changes in terminology and descriptions of the financial statements to achieve consistency with AASB 101 Presentation of Financial Statements (September 2007) and updates the segment disclosure requirements to be consistent with AASB 8 Operating Segments.
Applies to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory
(at the full year)
Accounting alert 2008/11
AASB 1048 Interpretation and Application of Standards (March 2009)
Updated version of this 'service standard' to provide a mandatory requirement to comply with Interpretations in the Australian context.
AASB 1048 applies to annual reporting periods ending on or after 31 March 2009 but contains specific application dates for each Interpretation (refer to Interpretations below) Mandatory (refer to Interpretations below) Mandatory (refer to Interpretations below) See the related Interpretations below
AASB 1049 Whole of Government and General Government Sector Financial Reporting
This Standard integrates GAAP/GFS harmonisation requirements for both GGS and whole of governments, combining the requirements of AASB 1049 Financial Reporting of General Government Sectors by Governments and the modified proposals from ED 155 Financial Reporting by Whole of Governments.
Applies to annual reporting periods beginning on or after 1 July 2008 and must be applied retrospectively within the context of AASB 1 Mandatory Mandatory

Accounting alert 2007/17

Accounting alert 2006/10

AASB 1050 Administered Items
This Standard only applies to general purpose financial statements of government departments. The main requirements are for a government department to disclose administered income, expenses, assets and liabilities (applying the principles of AASB 1052 Disaggregated Disclosures), along with details of certain non-department controlled transfers. Administered income, expenses, assets and liabilities are reported on the same basis adopted for the recognition of elements of financial statements.
Applies to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/19

Accounting alert 2007/20

AASB 1051 Land Under Roads
Applies to general purpose financial statements of local governments, government departments, GGSs and whole of governments. Requires land under roads acquired after the end of the first reporting period ending on or after 31 December 2007 to be accounted for under AASB 116 Property, Plant and Equipment, with transitional provisions for land acquired prior to that date.
Applies to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/19

Accounting alert 2007/20

AASB 1052 Disaggregated Disclosures
This Standard, which only applies to general purpose financial statements of local governments and government departments, specifies principles for reporting of financial information by function or activity by local governments and financial information about service costs and achievements by government departments.
Applies to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/19

Accounting alert 2007/20


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

New Amending Standards

The table below lists the Amending Standards that do not relate to the pronouncements listed in other tables.

New or revised requirement When effective 30 June 2009 applicability More information
Full years Half years
AASB 2007-9 Amendments to Australian Accounting Standards arising from the Review of AAS 27, AAS 29 and AAS 31
Relocates certain relevant requirements from AASs 27, 29 and 31, substantively unamended, into existing topic-based standards. This Standard also makes consequential amendments, arising from the short-term review of AASs 27, 29 and 31, to AASB 5, AASB 8, AASB 101 and AASB 114.
Applicable to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/19

Accounting alert 2007/20

AASB 2007-10 Further Amendments to Australian Accounting Standards arising from AASB 101
This Amending Standard changes the term 'general purpose financial report' to 'general purpose financial statements' and the term 'financial report' to 'financial statements', where relevant, in Australian Accounting Standards (including Interpretations) to better align with IFRS terminology.
Applies to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory Accounting alert 2007/20

AASB 2008-1 Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions and Cancellations
Amends AASB 2 Share-based Payment to introduce equivalent amendments made to IFRS 2 Share-based Payment by the IASB to:

  • clarify that vesting conditions are those conditions that determine whether the entity receives the services that result in the counterparty's entitlement
  • restrict the definition of vesting conditions to include only service conditions and performance conditions
  • amend the definition of performance conditions to require the completion of a service period in addition to specified performance targets
  • specify that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment.
Applies retrospectively to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory

Accounting alert 2008/02

IAS Plus Newsletter(January 2008, 126kb)

AASB 2008-2 Amendments to Australian Accounting Standards - Puttable Financial Instruments and Obligations arising on Liquidation
Amends AASB 132 Financial Instruments: Presentation and AASB 101 Presentation of Financial Statements and a number of other standards to introduce requirements equivalent to the IASB's amendments regarding puttable financial instruments and obligations arising on liquidation.

The amendments permit certain puttable financial instruments and instruments (or components of instruments) that impose on the entity an obligation to deliver to another party a pro-rata share of the net assets of the entity only on liquidation, to be classified as equity, subject to specified criteria being met.

Applies retrospectively to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory

Accounting alert 2008/03

IAS Plus Newsletter(February 2008, 101kb)

AASB 2008-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Project

Makes amendments to 25 different Standards and is equivalent to the IASB Standard Improvements to IFRSs issued in May 2008. The amendments largely clarify the required accounting treatment where previous practice had varied, although some new or changed requirements are introduced. Topics include below market interest-rate government loans, accounting for advertising and promotional expenditure, investment property under construction and the reclassification to inventories of property, plant and equipment previously held for rental when the assets cease to be rented and are held for sale.

Applies retrospectively (with some exceptions) to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory

Accounting alert 2008/09

IAS Plus Newsletter (May 2008, PDF 136kb)

IAS Plus project page

AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project

Makes amendments to Australian Accounting Standards AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards and AASB 5 Non-current Assets Held for Sale and Discontinued Operations to include requirements relating to a sale plan involving the loss of control of a subsidiary. The amendments require all the assets and liabilities of such a subsidiary to be classified as held for sale and clarify the disclosures required when the subsidiary is part of a disposal group that meets the definition of a discontinued operation.

Note: The amendments cannot be early adopted for annual reporting periods beginning before 1 July 2009 unless AASB 127 'Consolidated and Separate Financial Statements' (as amended by AASB 2008-5 in July 2008) is also applied.

Applies retrospectively to annual reporting periods beginning on or after 1 July 2009 Optional Optional

Accounting alert 2008/09

IAS Plus Newsletter (May 2008, PDF 136kb)

IAS Plus project page

 AASB 2008-7 Amendments to Australian Accounting Standards - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

This Amending Standard:

  • amends AASB 127 Consolidated and Separate Financial Statements to remove the definition of the 'cost method' and to require the separate financial statements of a new parent formed as the result of a specific type of reorganisation to measure the cost of its investment in the previous parent at the carrying amount of its share of the equity items of the previous parent at the date of the reorganisation
  • removes from AASB 118 Revenue the requirement to deduct dividends declared out of pre-acquisition profits from the cost of an investment in a subsidiary, jointly controlled entity or associate accounted for under the cost method. Therefore, all dividends from a subsidiary, jointly controlled entity or associate are recognised by the investor as income
  • implements consequential amendments to AASB 136 Impairment of Assets, introducing a new indicator of impairment for investments in subsidiaries, jointly controlled entities and associates where a dividend has been recognised
  • allows first-time adopters to use a deemed cost of either fair value or the carrying amount under previous GAAP to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements.
Applies prospectively for annual reporting periods beginning on or after 1 January 2009 Optional Mandatory

Accounting alert 2008/09

IAS Plus Newsletter (May 2008, PDF 102kb)

IAS Plus project page

AASB 2008-8 Amendments to Australian Accounting Standards - Eligible Hedged Items

Clarifies the hedge accounting provisions of AASB 139 Financial Instruments: Recognition and Measurement to address:

  • inflation in a financial hedged item - inflation may only be hedged if changes in inflation are a contractually specified portion of cash flows of a recognised financial instrument
  • a one-sided risk in a hedged item - the amendments make clear that the intrinsic value, not the time value, of an option reflects a one-sided risk and, therefore, an option designated in its entirety cannot be perfectly effective.
Applies retrospectively to annual reporting periods beginning on or after 1 July 2009 Optional Optional

IAS Plus Newsletter (PDF 140kb)

IAS Plus project page

AASB 2008-9 Amendments to AASB 1049 for consistency with AASB 101

Amends AASB 1049 Whole of Government and General Government Sector Financial Reporting to reflect the revised requirements in AASB 101 (September 2007), including presenting a whole of government and GGS statement of changes in equity, and using AASB 101 terminology. Also clarifies the government operating statement requirements and the budgeted information disclosure requirements.

Applies to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory

IAS Plus Newsletter (PDF 140kb)

IAS Plus project page

AASB 2008-10 Amendments to Australian Accounting Standards - Reclassification of Financial Assets, AASB 2008-12 Amendments to Australian Accounting Standards - Reclassification of Financial Assets - Effective Date and Transition and AASB 2009-3 Amendments to Australian Accounting Standards - Embedded Derivatives

Amends the reclassification requirements of AASB 139 Financial Instruments: Recognition and Measurement to permit an entity to:

  • reclassify non-derivative financial assets (other than those designated at fair value through profit or loss by the entity upon initial recognition) out of the fair value through profit or loss category in particular circumstances
  • transfer from the available-for-sale category to the loans and receivables category a financial asset that would have met the definition of loans and receivables (if the financial asset had not been designated as available for sale), if the entity has the intention and ability to hold that financial asset for the foreseeable future.

Also introduces new disclosure requirements into AASB 7 Financial Instruments: Disclosures for items that have been reclassified.

AASB 2009-3 amends Interpretation 9 and AASB 139 to clarify that on reclassification of a financial asset out of the 'fair value through profit or loss' category, all embedded derivatives in the reclassified instrument have to be assessed and, if necessary, separately accounted for in financial statements

Note: An entity cannot reclassify a financial asset before 1 July 2008. Any reclassification of a financial asset made on or after 1 November 2008 can take effect only from the date when the reclassification is made.

AASB 2008-10 and AASB 2008-12 - the amendments to AASB 139 and AASB 7 apply from 1 July 2008
(see note in previous column regarding reclassifications)

AASB 2009-3 - amendments to Interpretation 9 and AASB 139 apply retrospectively and are effective for annual periods ending on or after 30 June 2009

Mandatory Mandatory

Accounting alert 2008/14

IAS Plus Newsletter (October 2008, PDF 96kb)

IAS Plus Update Newsletter (March 2009, PDF 115kb)

AASB 2009-1 Amendments to Australian Accounting Standards - Borrowing Costs of Not-for-Profit Public Sector Entities

Amends AASB 123 Borrowing Costs to reintroduce the option to allow public sector not-for-profit entities to expense all borrowing costs.

Applies to annual reporting periods beginning on or after 1 January 2009 that end on or after 30 April 2009 Optional Mandatory Accounting alert 2009/05

AASB 2009-2 Amendments to Australian Accounting Standards - Improving Disclosures about Financial Instruments

Amends AASB 7 Financial Instruments: Disclosures to require enhanced disclosures about fair value measurements and liquidity risk.

Among other things, the amendments:

  • clarify that the existing AASB 7 fair value disclosures must be made separately for each class of financial instrument
  • add disclosure of any change in the method for determining fair value and the reasons for the change
  • establish a three-level hierarchy for making fair value measurements used in the disclosures
  • clarify that the current maturity analysis for non-derivative financial instruments should include issued financial guarantee contracts and disclosure of a maturity analysis for derivative financial liabilities.

Comparative information is not required to be provided in the first year the amendments are applied.

Applies to annual reporting periods beginning on or after 1 January 2009 that end on or after 30 April 2009 Optional
Mandatory
(at the full year)

IAS Plus Update Newsletter (PDF 115kb)

IASB Press Release

[NEW] AASB 2009-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Process

Introduces amendments into Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are technical changes to other pronouncements as the result of the issue of AASB 3 Business Combinations (2008), to align the scope of the pronouncements or to implement other consequential amendments.

A further amendment changes the restriction in Interpretation 16 Hedges of a Net Investment in a Foreign Operation on the entity that can hold hedging instruments.

Note: An entity early adopting AASB 3(2008) must also apply the consequential amendments to AASB 2, AASB 138 and Interpretation 9 included in AASB 2009-4.

Applies to annual reporting periods beginning on or after 1 July 2009 Optional
Optional
(at the full year)
IAS Plus Update Newsletter (PDF 104kb)

[NEW] AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process

Introduces amendments into Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are largely technical, clarifying particular terms, or eliminating unintended consequences.

Other changes are more substantial, such as the current/non-current classification of convertible instruments, the classification of expenditures on unrecognised assets in the statement of cash flows and the classification of leases of land and buildings.

Note: The amendments made to the guidance to AASB 118 'Revenue' regarding determining whether an entity is acting as agent or principal have no explicit application date and we understand that they are taken to be immediately applicable.

Applies to annual reporting periods beginning on or after 1 January 2010
(see note in previous column regarding guidance in AASB 118)
Optional
Optional
(at the full year)
IAS Plus Update Newsletter (PDF 104kb)

[NEW] AASB 2009-6 Amendments to Australian Accounting Standards

This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. The Standard also makes additional amendments as a consequence of the issuance in September 2007 of a revised AASB 101.

These amendments have no major impact on the requirements of the amended pronouncements.

Applies to annual reporting periods beginning on or after 1 January 2009 that end on or after 30 June 2009 Optional Mandatory
(at the full year)
Accounting alert 2009/07

[NEW] AASB 2009-7 Amendments to Australian Accounting Standards

This Standard makes amendments to AASB 5, AASB 7, AASB 139 and Interpretation 17 to correct errors that occurred in AASB 2008-12 Amendments to Australian Accounting Standards Reclassification of Financial Assets Effective Date and Transition, AASB 2008-13 Amendments to Australian Accounting Standards arising from AASB Interpretation 17 Distributions of Non-cash Assets to Owners and Interpretation 17 itself. The other amendments reflect changes made by the IASB to its pronouncements.

These editorial amendments have no major impact on the requirements of the amended pronouncements.

Applies to annual reporting periods beginning on or after 1 July 2009 Optional Optional Accounting alert 2009/07

[NEW] AASB 2009-8 Amendments to Australian Accounting Standards - Group Cash-Settled Share-based Payment Transactions

Amends AASB 2 Share-based Payment to clarify the accounting for group cash-settled share-based payment transactions. An entity receiving goods or services in a share-based payment arrangement must account for those goods or services no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash.

The amendments to AASB 2 also incorporate guidance previously included in Intepretation 8 Scope of AASB 2 and Interpretation 11 AASB 2 - Group and Treasury Share Transactions and as a consequence these two Interpretations are superseded by the amendments.

Applies to annual periods beginning on or after 1 January 2010 and must be applied retrospectively. Optional Optional

IASB Press Release (PDF 103kb)

IAS Plus Project page


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards |  Interpretations | IASB/IFRIC | Corporations Act | Other

New and revised Interpretations

New or revised requirement When effective 30 June 2009 applicability More information
Full years Half years
Interpretation 12 Service Concession Arrangements, Interpretation 4 Determining whether an Arrangement contains a Lease (revised), Interpretation 129 Service Concession Arrangements: Disclosure (revised), AASB 2007-2 Amendments to Australian Accounting Standards arising from AASB Interpretation 12
Equivalent to IFRIC 12 of the same name. Addresses the appropriate accounting for service concession arrangements under which private sector entities participate in the development, financing, operation and maintenance of infrastructure for the provision of public services, such as transport, water and energy facilities.
Applies retrospectively (with limited exceptions) to annual reporting periods beginning on or after 1 January 2008 Mandatory Already implemented

IAS Plus Newsletter (December 2006, PDF 128kb)

Our overview analysis of AASB Interpretation 12 Service Concession Arrangements

Interpretation 13 Customer Loyalty Programmes
Requires customer loyalty awards (e.g. points, free goods or services, future discounts) to be treated as a separately identifiable component of the sales transactions in which they are granted. The fair value of the consideration received or receivable from the initial sale must be allocated on a fair value basis between the good or service provided and the loyalty award, with the loyalty amount deferred until it is redeemed, cancelled or expires.
Applies retrospectively to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/14

IAS Plus newsletter (June 2007, PDF 106kb)

IAS Plus project page

Interpretation 14 AASB 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
This Interpretation deals with the following issues:

  • when refunds or reductions in future contributions should be regarded as available in accordance with paragraph 58 of AASB 119 Employee Benefits
  • how a minimum funding requirement might affect the availability of reductions in future contributions
  • when a minimum funding requirement might give rise to a liability.
Applies from the beginning of the first period presented in the first financial statements for annual reporting periods beginning on or after 1 January 2008 Mandatory Already implemented

Accounting alert 2007/14

IAS Plus Newsletter (July 2007, 221kb)

IAS Plus project page

Interpretation 15 Agreements for the Construction of Real Estate

Addresses the accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors, specifically two (related) issues:

  • determining whether an agreement for the construction of real estate is within the scope of AASB 111 Construction Contracts or AASB 118 Revenue
  • when revenue from the construction of real estate should be recognised.
Applies retrospectively to annual reporting periods beginning on or after 1 January 2009 Optional Mandatory

IAS Plus Newsletter (July 2008, PDF 133kb)

IAS Plus project page

Interpretation 16 Hedges of a Net Investment in a Foreign Operation

Provides guidance on net investment hedging, including:

  • which foreign currency risks qualify for hedge accounting, and what amount can be designated
  • where within the group the hedging instrument can be held
  • what amount should be reclassified to profit or loss when the hedged foreign operation is disposed of.

Note: AASB 2009-4 amends this Interpretation to remove restrictions on the entity that can hold hedging instruments in the hedge relationship.

Applies prospectively to annual reporting periods beginning on or after 1 October 2008 Optional Mandatory

IAS Plus Newsletter (July 2008, PDF 122kb)

IAS Plus project page

Interpretation 17 Distributions of Non-Cash Assets to Owners and AASB 2008-13 Amendments to Australian Accounting Standards arising from AASB Interpretation 17 Distributions of Non-Cash Assets to Owners

Requires:

  • a dividend payable to be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity
  • an entity to measure the dividend payable at the fair value of the net assets to be distributed
  • an entity to recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss
  • an entity to provide additional disclosures if the net assets being held for distribution to owners meet the definition of a discontinued operation.

AASB 2008-13 makes consequential amendments to AASB 5 Non-current Assets Held for Sale and Discontinued Operations and AASB 110 Events After the Reporting Period.

Note: an entity early adopting Interpretation 17 must also apply AASB 3(2008), AASB 127(2008) and AASB 5 (as amended by AASB 2008-13).

Applies prospectively to annual reporting periods beginning on or after 1 July 2009 Optional
(see note regarding early adoption)
Optional
(see note regarding early adoption)
IAS Plus Newsletter (December 2008, PDF 104kb)

Interpretation 18 Transfers of Assets from Customers

The Interpretation clarifies the accounting for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water).

The key requirements of the Interpretation include:

  • an asset is only recognised where it meets the definition of an asset in the Framework
  • transferred assets that meet the definition of an asset are initially recognised at fair value
  • revenue arising from the recognition of the transferred assets is recognised in accordance with the requirements of AASB 118 Revenue. Revenue may involve one or more services in exchange for the transferred item, such as connecting the customer to a network, providing the customer with ongoing access to a supply of goods or services, or both.

Note: Earlier application of Interpretation 18 is permitted provided the valuations and other information needed to apply the Interpretation to past transfers were obtained at the time those transfers occurred.

Applies to transfers of assets from customers received on or after 1 July 2009 Optional
(see note regarding early adoption)
Optional
(see note regarding early adoption)

IAS Plus Update Newsletter (February 2009, PDF 107kb)

IAS Plus summary

Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities (revised)
This revised Interpretation differs from UIG Interpretation 1038 in that it does not apply to government controlled not-for-profit entities or for-profit government departments in respect of a restructure of administrative arrangements. This Interpretation has also been updated for changes as a result of AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101.
Applies to annual reporting periods beginning on or after 1 July 2008 Mandatory Mandatory

Accounting alert 2007/19

Accounting alert 2007/20


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

Pronouncements approved by the IASB/IFRIC where an equivalent pronouncement has not been issued by the AASB

New or revised requirement When effective 30 June 2009 applicability More information
Full years Half years

IFRS 1 First-time Adoption of International Financial Reporting Standards (reissued 2008)
A new version of IFRS 1 resulting from the 2007 annual improvements process which retains the substance of the previous version, but within a changed structure to make it easier for the reader to understand and to better accommodate future changes.

Note: The revised Standard originally required application where an entity's first IFRS financial statements are for a period beginning on or after 1 January 2009, with earlier application permitted. However, at its December 2008 meeting, the IASB decided to change the effective date to 1 July 2009, correcting a potential technical problem arising from the interaction of IFRS 1 and other Standards. 

[UPDATE] Note: The AASB made an equivalent standard, AASB 1 'First-time Adoption of Australian Accounting Standards', in May 2009.

Applies to an entity's first IFRS financial statements that are for a period beginning on or after 1 July 2009 n/a
(optional only for first-time adopters)
n/a
(optional only for first-time adopters)
IAS Plus Newsletter [updated]
(December 2008,
PDF 113kb)

Improvements to International Financial Reporting Standards (2009)

Implements changes to 12 IFRSs as part of the IASB's program of annual improvements to its standards.

The amendments are largely technical, such as clarifying the particular terms, making changes to scope requirements to bring them into line between standards or eliminating unintended consequences.

Other changes are more substantial, such as the current/non-current classification of convertible instruments, the classification of expenditures on unrecognised assets in the statement of cash flows, the classification of leases of land and buildings and guidance on distinguishing a principal from an agent.

[UPDATE] Note: The AASB made AASB 2009-4 'Amendments to Australian Accounting Standards arising from the Annual Improvements Process' and AASB 2009-5 'Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process' in May 2009 to implement equivalent amendments in the Australian context.

The amendments are effective for annual periods beginning on or after either 1 July 2009 or 1 January 2010 Optional Optional IAS Plus Update Newsletter (April 2009, PDF 104kb)

[NEW] Group Cash-settled Share-based Payment Transactions - Amendments to IFRS 2

Amends IFRS 2 Share-based Payment to clarify the accounting for group cash-settled share-based payment transactions. An entity that receives goods or services in a share-based payment arrangement must account for those goods or services no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash.

The amendments to IFRS 2 also incorporate guidance previously included in IFRIC 8 Scope of IFRS 2 and IFRIC 11 IFRS 2 - Group and Treasury Share Transactions. As a result, the IASB has withdrawn IFRIC 8 and IFRIC 11.

[UPDATE] Note: The AASB made AASB 2009-8 'Amendments to Australian Accounting Standards - Group Cash-settled Share-based Payment Transactions' in July 2009 to implement equivalent amendments in the Australian context.

The amendments are effective for annual periods beginning on or after 1 January 2010 and must be applied retrospectively. Optional Optional

IASB Press Release (PDF 103kb)

IAS Plus Project page

[NEW] International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs)

This Standard provides an alternative framework that can be applied by eligible entities in place of the full set of International Financial Reporting Standards (IFRSs) on issue.

The IFRS for SMEs is a self-contained Standard, incorporating accounting principles that are based on full IFRSs but that have been simplified to suit the entities within its scope (known as SMEs). By removing some accounting treatments permitted under full IFRSs, eliminating topics and disclosure requirements that are not generally relevant to SMEs, and simplifying requirements for recognition and measurement, the IFRS for SMEs reduces the volume of accounting requirements applicable to SMEs by more than 90 per cent when compared with the full set of IFRSs.

The IASB has not set an effective date for the Standard because the decision as to whether to adopt the IFRS for SMEs (and also, therefore, the timing for adoption) is a matter for each jurisdiction The AASB has not yet decided if, and if so, how, the IFRS for SMEs will be implemented in Australia The AASB has not yet decided if, and if so, how, the IFRS for SMEs will be implemented in Australia

IAS Plus 
Update 
Newsletter
(PDF 86kb)

The complete IFRS
for SMEs (free)

[NEW] Additional Exemptions for First-time Adopters - Amendments to IFRS 1

Provides additional exemptions and modifications on transition to IFRS in relation to certain oil and gas assets in development or production, decommissioning, restoration and similar liabilities related to those assets, and IFRIC 4 assessments made under equivalent requirements of pre-transition GAAP.

Applies to an entity's first IFRS financial statements that are for a period beginning on or after 1 January 2010. n/a
(optional only for first-time adopters once an equivalent amendment is made by the AASB)
n/a
(optional only for first-time adopters once an equivalent amendment is made by the AASB)
IASB Press release


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

Corporations Act 2001 developments

The following developments related to the Corporations Act 2001 during the last 12 months have direct or indirect impacts on financial reporting:

Development When effective More information

ASIC Class Order [CO 08/618] Variation to wholly-owned entities class order
Varies Class Order [CO 98/1418] Wholly owned entities by:

  • removing condition (h)(i) so that asset values in the holding entity's consolidated financial statements are determined in accordance with accounting standards
  • allowing for the substitution of one trustee for another trustee under condition (s) as contemplated by the pro forma deed of cross guarantee
  • providing greater clarity as to when comparative information is required in note disclosures required for the holding entity's consolidated financial statements.
Effective from 14 August 2008 -

ASIC Regulatory Guide 43 Financial reports and audit relief

ASIC has reissued this regulatory guide (also known as Policy Statement 43) based on legislation and regulations as at 9 October 2008. The guide explains how ASIC may exercise its powers to grant relief from the financial reporting and audit requirements of Pt 2M.2, 2M.3 and 2M.4 (other than Div 4) of the Corporations Act 2001.

Reissued and updated 9 October 2008 -


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other

Other developments

The following are other developments that may have direct or indirect impacts on financial reporting:

  • [NEW] in late June 2009, ASIC released a press release announcing its areas of focus for the June financial reporting season, including going concern, impairment, fair value measurements, off balance sheet arrangements, financial instrument disclosures and other matters. The media release is available from the ASIC website
  • the ASX has released their revised Corporate Governance Principles and Recommendations (the Principles). The new Principles continue the non-prescriptive 'if not, why not' disclosure-based approach to Australian Corporate Governance. The new ASX Principles will apply for financial years beginning on or after 1 January 2008 (i.e. first applied by companies with June year ends at 30 June 2009). More information on the revised Principles is available by clicking here.
  • in mid-March 2009, guidance was issued by The Australian Institute of Company Directors (AICD) and Financial Services Institute of Australia (Finsia) in relation to 'non-statutory profit' disclosures to the market. Concern had been raised about widespread use of different 'non-statutory profit' disclosures, which nonetheless can be valuable information for users of financial information disclosed to the market. The AICD and Finsia guidance seeks to encourage companies to disclose any non-statutory measure of profit in a responsible and consistent manner. The press release is available by clicking here. Key aspects of the guidance include:
    • the recommendation that any non-statutory measure of profit disclosed be termed 'underlying profit'
    • the establishment of seven principles to reporting underlying profit, including a principle that 'underlying profit' be reconciled to net profit after tax (NPAT) included in statutory financial reports
    • examples of the common items that adjust NPAT to arrive at underlying profit
    • a suggestion that companies following the guidance should disclose that fact


Top | Big picture issues | IFRS-equivalent Standards | Domestic Standards | Amending Standards | Interpretations | IASB/IFRIC | Corporations Act | Other 

Share

 
Follow us



 

Talk to us