{"id":"F2021L01793","name":"Accounting Standard AASB 2021-6 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards","slug":"accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":102218,"registerId":"commonwealth-F2021L01793-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a copy of this Accounting Stan","sectionType":"part","heading":"Obtaining a copy of this Accounting Standard","content":"# Obtaining a copy of this Accounting Standard\n\nThis Standard is available on the AASB website: www.aasb.gov.au.\n\nAustralian Accounting Standards Board\n\nPO Box 204\n\nCollins Street West\n\nVictoria 8007\n\nAUSTRALIA\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nWebsite: www.aasb.gov.au","sortOrder":0},{"sectionNumber":"Other enquiries","sectionType":"part","heading":"Other enquiries","content":"# Other enquiries\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nCOPYRIGHT\n\n© Commonwealth of Australia 2021\n\nThis work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission. Requests and enquiries concerning reproduction and rights should be addressed to The National Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nISSN 1036-4803","sortOrder":1},{"sectionNumber":"Contents","sectionType":"part","heading":"Contents","content":"# Contents\n\nPREFACE\n\nACCOUNTING STANDARD\n\nAASB 2021-6 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards\n\nfrom paragraph\n\nOBJECTIVE 1\n\nAPPLICATION 2\n\nAMENDMENTS TO AASB 1049 5\n\nAMENDMENTS TO AASB 1054 6\n\nAMENDMENTS TO AASB 1060 7\n\nCOMMENCEMENT OF THE LEGISLATIVE INSTRUMENT 8\n\nBASIS FOR CONCLUSIONS\n\nAustralian Accounting Standard AASB 2021-6 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards is set out in paragraphs 1 – 8. All the paragraphs have equal authority.","sortOrder":2},{"sectionNumber":"Standards amended by AASB 2021-6","sectionType":"part","heading":"Standards amended by AASB 2021-6","content":"## Standards amended by AASB 2021-6\n\nThis Standard makes amendments to AASB 1049 Whole of Government and General Government Sector Financial Reporting (October 2007), AASB 1054 Australian Additional Disclosures (May 2011) and AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (March 2020).\n\nMain features of this Standard\n\nMain requirements\n\nAASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates amended AASB 101 Presentation of Financial Statements and three other Standards to address disclosure of material accounting policy information rather than significant accounting policies. These amendments were designed to help entities provide accounting policy disclosures that are more useful to the users of their financial statements.\n\nConsistent with the amendments made by AASB 2021-2, this Standard amends:\n\n(a) AASB 1049, to require entities to disclose their material accounting policy information rather than their significant accounting policies;\n\n(b) AASB 1054, to reflect the updated terminology used in AASB 101; and\n\n(c) AASB 1060, to require entities to disclose their material accounting policy information rather than their significant accounting policies and to clarify that information about measurement bases for financial instruments is expected to be material to an entity’s financial statements.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2023, with earlier application permitted.","sortOrder":3},{"sectionNumber":"Accounting Standard AASB 2021-6","sectionType":"part","heading":"Accounting Standard AASB 2021-6","content":"# Accounting Standard AASB 2021-6\n\nThe Australian Accounting Standards Board makes Accounting Standard AASB 2021-6 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards under section 334 of the Corporations Act 2001.\n\n|                       | Keith Kendall |\n| --------------------- | ------------- |\n| Dated 8 December 2021 | Chair – AASB  |","sortOrder":4}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"This instrument aligns wording and clarifies expectations (apply \"material accounting policy information\" terminology and state that measurement bases for financial instruments are expected to be material). It implements the narrower procedural change begun in AASB 2021-2 rather than expanding the substantive scope of accounting requirements. It does not add new recognition or measurement rules, nor does it materially broaden which entities are covered — it primarily updates disclosure terminology and guidance across the three standards."},"complexity_factors":["Amendments are limited in length but applied across three separate Standards (AASB 1049, 1054, 1060).","AASB 1060 has multiple paragraph edits (25, 93, 95, 96, 112, 123, 125, 129, 160, 163, 221), plus a heading change and Appendix A amendment — ~12 distinct amendment points.","AASB 1049 and AASB 1054 each have several paragraph and illustrative/example edits (AASB 1049 paras 39–40 and Illustrative Example C; AASB 1054 para 9B and IG1, IG5 and heading), producing cross-document consistency tasks.","Reliance on defined terms and definitions from other standards (materiality concepts, and accounting policies as defined in AASB 108) increases cross-referencing.","Shift from a prescriptive phrase to a judgmental standard (materiality) increases interpretive complexity for preparers and auditors despite the limited textual change.","Typographical presentation (strikethroughs/underlines) used in the instrument to show amendments may require careful reading to identify operative text versus editorial markup (para 4)."],"plain_english_summary":"**What this Standard changes (mechanically)\n\n- Replaces the phrase \"significant accounting policies\" with \"material accounting policy information\" across three Australian Accounting Standards: AASB 1049 (Whole of Government and General Government Sector Financial Reporting), AASB 1054 (Australian Additional Disclosures) and AASB 1060 (Simplified Disclosures for Tier 2 entities). (see Objective, para 1; amendments in paras 5–7)\n- Clarifies that information about the measurement bases used for financial instruments is expected to be material and therefore should be disclosed. (AASB 1060 para 112)\n- Updates implementation guidance and illustrative examples to reflect the new terminology. (amendments to illustrative material in AASB 1049 and AASB 1054; multiple amendments in AASB 1060 and its Appendix A)\n- Applies to annual reporting periods beginning on or after 1 January 2023, with earlier application permitted; for legal purposes the instrument commences on 31 December 2022. (paras 3 and 8)\n\nWho is affected\n\n- All entities that prepare financial statements under the amended standards: whole-of-government and general government sector reporters (AASB 1049), entities that rely on AASB 1054 (including some not-for-profit private sector entities and certain special purpose statements where the entity elects to apply AASB 1054), and Tier 2 for‑profit and not‑for‑profit entities using AASB 1060 (simplified disclosures). (paras 1, 2, 6, 7)\n- Preparers (management) will make more judgments about which accounting policy information is material and therefore must be disclosed.\n- Auditors and regulators (e.g. ASIC, ACNC where relevant) will assess whether disclosures meet the materiality-based requirement.\n\nWhy it matters (AASB's stated aim and a practical test of effects)\n\n- Stated aim: These amendments implement the AASB's change (from AASB 2021-2) to encourage disclosure of accounting policies that are \"material\" (i.e. likely to influence primary users' decisions), rather than publishing all \"significant\" policies which had produced boilerplate and less useful disclosures. (Objective, main requirements)\n\n- Practical consequences and trade-offs:\n  - Who pays: Preparers bear the immediate cost of exercising more judgement (time to assess materiality, document decisions, and update notes). Auditors and regulators bear monitoring/enforcement costs.\n  - Behaviour change: Management must identify and disclose accounting policy information that is material in the context of the entity's financial statements, and explicitly disclose measurement bases for financial instruments because that is expected to be material (AASB 1060 para 112). Entities may shorten generic policy disclosures and emphasise policies that affect users' decisions.\n  - Compliance burden and implementation risk: The standard shifts effort from rule-checking (list all significant policies) to judgement-based assessment (what is material). That can reduce repetitive disclosure but increases the need for documented judgment, creating potential variability between entities and greater scope for disagreement with auditors/regulators.\n  - Incentives and capture risks: Entities gain flexibility to reduce disclosure volume where policies are immaterial, concentrating benefits for preparers (lower disclosure cost). Users and comparability may bear diffuse costs if different entities apply materiality differently. Regulators or auditors may need to exercise discretion to restore comparability, adding administrative overhead.\n  - Effects on private enterprise and competition: The change does not alter recognition or measurement rules; it only changes disclosure scope and presentation. It can reduce reporting cost for smaller entities using Tier 2 disclosure concessions (AASB 1060) but may also make cross‑entity comparisons harder if materiality judgments vary.\n  - Opportunity costs and substitution effects: Time spent determining material policies and documenting judgments displaces other reporting work. Some entities may adopt conservative disclosure practices (disclose more to avoid scrutiny), offsetting intended disclosure reduction.\n\nKey implementation points to watch (practical mechanics)\n\n- Materiality is assessed in context (see AASB 1060 para 95 definition-style wording). Management decides what is material; auditors/regulators review those decisions.\n- Appendix A of AASB 1060 and multiple note-structure paragraphs have been reworded to reflect \"material accounting policy information\"; these amendments should be followed when preparing notes and illustrative examples. (AASB 1060 amendments listed in paras under \"Amendments to AASB 1060\")\n- Entities preparing special purpose financial statements that are not required to comply with AASB 1054 may elect not to adopt the implementation guidance, but the AASB encourages application. (AASB 1054 IG1)\n\nSelected references in the Standard: Objective and scope (para 1), application dates (paras 2–4), detailed amendments to AASB 1049 (para 5), AASB 1054 (para 6) and AASB 1060 (para 7), and legal commencement (para 8)."},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This instrument remains tightly scoped to its original purpose: aligning disclosure terminology across three specific standards with the broader changes made by AASB 2021-2. It does not expand beyond accounting policy disclosures or introduce new substantive requirements beyond the terminology shift from 'significant' to 'material'."},"complexity_factors":["Amendment-style structure requiring cross-referencing to three other standards (AASB 1049, AASB 1054, AASB 1060) to understand full context","Use of typographical conventions (strikethrough for deletions, underlining for insertions) that must be mentally processed to understand final text","8 operative paragraphs but amendments scattered across multiple sections of target standards","Requires understanding of \"materiality\" concept from AASB 101 and AASB 108, though these are not fully defined within this instrument","Conditional application based on entity type (for-profit vs not-for-profit, Tier 1 vs Tier 2, public sector vs private sector)","Specific carve-out for land under roads acquired before 2007 (paragraph 221), creating a temporal exception"],"plain_english_summary":"This amendment replaces “significant accounting policies” with “material accounting policy information” in three standards (AASB 1049, 1054, 1060), affecting government entities, not‑for‑profit private sector entities and Tier 2 reporters. It narrows required policy disclosures to what could reasonably influence users’ decisions, cutting boilerplate and highlighting material items (eg, measurement of financial instruments). Applies to annual periods beginning on/after 1 Jan 2023 (earlier adoption permitted)."}},"importantCases":[],"_links":{"self":"/api/acts/accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti","history":"/api/acts/accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti/history","analysis":"/api/acts/accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti/analysis","conflicts":"/api/acts/accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti/conflicts","importantCases":"/api/acts/accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti/important-cases","documents":"/api/acts/accounting-standard-aasb-2021-6-amendments-to-australian-accounting-standards-disclosure-of-accounti/documents"}}