What's new in the December 2009 financial reporting cycle

AASB 101 Presentation of Financial Statements (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)
• 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.

AASB 123 Borrowing Costs (June 2007), 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'.

[NEW] AASB 124 Related Party Disclosures (2009), AASB 2009-12 Amendments to Australian Accounting Standards

Amends the requirements of the previous version of AASB 124 to:

• Provide a partial exemption from related party disclosure requirements for government-related entities
• Clarify the definition of a related party
• Include an explicit requirement to disclose commitments involving related parties.

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.

AASB 3 Business Combinations (2008), AASB 127 Consolidated and Separate Financial Statements (2008), 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).

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

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.

[NEW] AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9

AASB 9 introduces new requirements for classifying and measuring financial assets, as follows:

• Debt instruments meeting both a 'business model' test and a 'cash flow characteristics' test are measured at amortised cost (the use of fair value is optional in some limited circumstances)
• Investments in equity instruments can be designated as 'fair value through other comprehensive income' with only dividends being recognised in profit or loss
• All other instruments (including all derivatives) are measured at fair value with changes recognised in the profit or loss
• The concept of 'embedded derivatives' does not apply to financial assets within the scope of the Standard and the entire instrument must be classified and measured in accordance with the above guidelines.

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.

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.

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 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

AASB 2009-6 Amendments to Australian Accounting Standards and Erratum General Terminology Changes (October 2009)

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. The Erratum makes a number of additional terminology-related and editorial changes.

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

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.

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 Interpretation 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.

[NEW] AASB 2009-9 Amendments to Australian Accounting Standards - Additional Exemptions for First-time Adopters

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

[NEW] AASB 2009-10 Amendments to Australian Accounting Standards - Classification of Rights Issues

Amends AASB 132 Financial Instruments: Presentation to require a financial instrument that gives the holder the right to acquire a fixed number of the entity's own equity instruments for a fixed amount of any currency to be classified as an equity instrument if, and only if, the entity offers the financial instrument pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Prior to this amendment, rights issues (rights, options, or warrants) denominated in a currency other than the functional currency of the issuer were accounted for as derivative instruments.

[NEW] AASB 2009-14 Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement

Makes limited-application amendments to Interpretation 14 AASB 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The amendments apply when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements, permitting the benefit of such an early payment to be recognised as an asset.

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.

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.

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.

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).

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.

[NEW] Interpretation 19 Extinguishing Liabilities with Equity Instruments

Requires the extinguishment of a financial liability by the issue of equity instruments to be measured at fair value (preferably using the fair value of the equity instruments issued) with the difference between the fair value of the instrument issued and the carrying value of the liability extinguished being recognised in profit or loss. The Interpretation does not apply where the conversion terms were included in the original contract (such as in the case of convertible debt) or to common control transactions.

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.

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.

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.

[UPDATE] Note: The AASB approved AASB 2009-9 'Amendments to Australian Accounting Standards - Additional Exemptions for First-time Adopters' at its September 2009 meeting. This Amending Standard was made publicly available in late October 2009.

Classification of Rights Issues - Amendment to IAS 32

Amends IAS 32 Financial Instruments: Presentation to require a financial instrument that gives the holder the right to acquire a fixed number of the entity's own equity instruments for a fixed amount of any currency to be classified as an equity instrument if, and only if, the entity offers the financial instrument pro rata to all of its existing owners of the same class of its own non-derivative equity instruments.

Prior to this amendment, rights issues (rights, options, or warrants) denominated in a currency other than the functional currency of the issuer were accounted for as derivative instruments.

[UPDATE] Note: The AASB issued an equivalent Amending Standard, AASB 2009-10 'Amendments to Australian Accounting Standards - Classification of Rights Issues', in late October 2009.

[NEW] IAS 24 Related Party Disclosures (revised 2009)

Amends the requirements of the previous version of IAS 24 to:

• Provide a partial exemption from related party disclosure requirements for government-related entities
• Clarify the definition of a related party
• Include an explicit requirement to disclose commitments involving related parties.

[UPDATE] Note: The AASB issued equivalent Standards, AASB 124 'Related Party Disclosures' and AASB 2009-12 'Amendments to Australian Accounting Standards', in late December 2009.

[NEW] IFRS 9 Financial Instruments

First step in the IASB's project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measuring financial assets, as follows:

• Debt instruments meeting both a 'business model' test and a 'cash flow characteristics' test are measured at amortised cost (the use of fair value is optional in some limited circumstances)
• Investments in equity instruments can be designated as 'fair value through other comprehensive income' with only dividends being recognised in profit or loss
• All other instruments (including all derivatives) are measured at fair value with changes recognised in the profit or loss
• The concept of 'embedded derivatives' does not apply to financial assets within the scope of the Standard and the entire instrument must be classified and measured in accordance with the above guidelines.

Note: The IASB intends to expand IFRS 9 during 2010 to add new requirements for classifying and measuring financial liabilities, derecognition of financial instruments, impairment, and hedge accounting. By the end of 2010, the IASB intends IFRS 9 to be a complete replacement for IAS 39.

[UPDATE] Note: The AASB issued AASB 9 'Financial Instruments' and AASB 2009-11 'Amendments to Australian Accounting Standards arising from AASB 9', in early December 2009.

[NEW] Prepayments of a Minimum Funding Requirement (Amendments to IFRIC 14)

Makes limited-application amendments to IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The amendments apply when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements, permitting the benefit of such an early payment to be recognised as an asset.

[UPDATE] Note: The AASB made equivalent amendments to AASB Interpretation 14, through the issue of AASB 2009-14 'Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement', in late December 2009.

[NEW] IFRIC 19 Extinguishing Liabilities with Equity Instruments

Requires the extinguishment of a financial liability by the issue of equity instruments to be measured at fair value (preferably using the fair value of the equity instruments issued) with the difference between the fair value of the instrument issued and the carrying value of the liability extinguished being recognised in profit or loss. The Interpretation does not apply where the conversion terms were included in the original contract (such as in the case of convertible debt) or to common control transactions.

[UPDATE] Note: The AASB issued Interpretation 19 'Financial Instruments' and AASB 2009-13 'Amendments to Australian Accounting Standards arising from Interpretation 19', in late December 2009.

[NEW] ELimited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters - Amendment to IFRS 1

Provides additional exemption on IFRS transition in relation to IFRS 7 Financial Instruments: Disclosures. To avoid the potential use of hindsight and to ensure that first-time adopters are not disadvantaged as compared with current IFRS preparers, the IASB decided that first-time adopters should be permitted to use the same transition provisions permitted for existing preparers of financial statements prepared in accordance with IFRSs that are included in Improving Disclosures about Financial Instruments (Amendments to IFRS 7).

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.

ASIC Class Order [CO 09/626] Financial reporting relief - changes to notice lodging

Implements changes to form-lodging arrangements for companies wishing to take advantage of relief under Class Order 98/98 Small proprietary companies which are controlled by a foreign company but which are not part of a large group and Class Order 98/1418 Wholly-owned entities. The changes mean that companies relying on relief in [CO 98/98] will be able to lodge opt-in and opt-out forms at any time during a 19-month period commencing three months before the start of the relevant financial year and ending four months after the end of the financial year.