{"id":"F2024L00378","name":"Accounting Standard AASB 2024-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements: Tier 2 Disclosures","slug":"accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":105143,"registerId":"commonwealth-F2024L00378-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 2024\n\nThis AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce IFRS Foundation copyright material for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.\n\nISSN 1036-4803","sortOrder":1},{"sectionNumber":"Contents","sectionType":"part","heading":"Contents","content":"# Contents\n\nPREFACE\n\nACCOUNTING STANDARD\n\nAASB 2024-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements: Tier 2 Disclosures\n\nfrom paragraph\n\nOBJECTIVE 1\n\nAPPLICATION 3\n\nAMENDMENTS TO AASB 1060 5\n\nCOMMENCEMENT OF THE LEGISLATIVE INSTRUMENT 6\n\nBASIS FOR CONCLUSIONS\n\nAustralian Accounting Standard AASB 2024-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements: Tier 2 Disclosures is set out in paragraphs 1–6. All the paragraphs have equal authority.","sortOrder":2},{"sectionNumber":"Preface","sectionType":"part","heading":"Preface","content":"# Preface\n\n## Standards amended by AASB 2024-1\n\nThis Standard makes amendments to AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (March 2020).\n\n## Main features of this Standard\n\nMain requirements\n\nAASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements (June 2023) amended AASB 107 Statement of Cash Flows and AASB 7 Financial Instruments: Disclosures to introduce the requirement for an entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities, cash flows and exposure to liquidity risk.\n\nThis Standard amends AASB 1060 to require a Tier 2 entity to include in its financial statements the same specific disclosures that AASB 2023-1 requires in the financial statements of Tier 1 entities. Accordingly, Tier 2 entities will be required to disclose the terms and conditions of supplier finance arrangements, the carrying amount of the liabilities that are part of the arrangements, the carrying amounts of those liabilities for which the suppliers have already received payment from the finance providers, the range of payment due dates and the effect of non-cash changes.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2024 that end on or after 30 June 2024, with earlier application permitted.","sortOrder":3},{"sectionNumber":"Standards amended by AASB 2024-1","sectionType":"part","heading":"Standards amended by AASB 2024-1","content":"## Standards amended by AASB 2024-1\n\nThis Standard makes amendments to AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (March 2020).","sortOrder":4},{"sectionNumber":"Main features of this Standard","sectionType":"part","heading":"Main features of this Standard","content":"## Main features of this Standard\n\nMain requirements\n\nAASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements (June 2023) amended AASB 107 Statement of Cash Flows and AASB 7 Financial Instruments: Disclosures to introduce the requirement for an entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities, cash flows and exposure to liquidity risk.\n\nThis Standard amends AASB 1060 to require a Tier 2 entity to include in its financial statements the same specific disclosures that AASB 2023-1 requires in the financial statements of Tier 1 entities. Accordingly, Tier 2 entities will be required to disclose the terms and conditions of supplier finance arrangements, the carrying amount of the liabilities that are part of the arrangements, the carrying amounts of those liabilities for which the suppliers have already received payment from the finance providers, the range of payment due dates and the effect of non-cash changes.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2024 that end on or after 30 June 2024, with earlier application permitted.","sortOrder":5},{"sectionNumber":"Accounting Standard AASB 2024-1","sectionType":"part","heading":"Accounting Standard AASB 2024-1","content":"# Accounting Standard AASB 2024-1\n\nThe Australian Accounting Standards Board makes Accounting Standard AASB 2024-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements: Tier 2 Disclosures under section 334 of the Corporations Act 2001.\n\nKeith Kendall\n\nDated 7 March 2024 Chair – AASB","sortOrder":6},{"sectionNumber":"Objective","sectionType":"part","heading":"Objective","content":"## Objective\n\n1 This Standard amends AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (March 2020) to require a Tier 2 entity to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities, cash flows and exposure to liquidity risk.\n\n2 These amendments reflect the issuance of AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements, which amended AASB 107 Statement of Cash Flows (August 2015) and AASB 7 Financial Instruments: Disclosures (August 2015), to extend the disclosure requirements to Tier 2 entities.","sortOrder":8},{"sectionNumber":"Application","sectionType":"part","heading":"Application","content":"## Application\n\n3 The amendments set out in this Standard apply to entities and financial statements in accordance with the application of AASB 1060 set out in AASB 1057 Application of Australian Accounting Standards.\n\n4 This Standard applies to annual periods beginning on or after 1 January 2024 that end on or after 30 June 2024. Earlier application is permitted.","sortOrder":9},{"sectionNumber":"Amendments to AASB 1060","sectionType":"part","heading":"Amendments to AASB 1060","content":"## Amendments to AASB 1060\n\n5 Paragraphs 119A–119C and a related heading are added.","sortOrder":10},{"sectionNumber":"Supplier finance arrangements","sectionType":"part","heading":"Supplier finance arrangements","content":"# Supplier finance arrangements\n\n    119A Supplier finance arrangements are characterised by one or more finance providers offering to pay amounts an entity owes its suppliers and the entity agreeing to pay according to the terms and conditions of the arrangements at the same date as, or a date later than, suppliers are paid. These arrangements provide the entity with extended payment terms, or the entity’s suppliers with early payment terms, compared to the related invoice payment due date. Supplier finance arrangements are often referred to as supply chain finance, payables finance or reverse factoring arrangements. Arrangements that are solely credit enhancements for the entity (for example, financial guarantees including letters of credit used as guarantees) or instruments used by the entity to settle directly with a supplier the amounts owed (for example, credit cards) are not supplier finance arrangements.\n    119B An entity shall disclose in aggregate for its supplier finance arrangements:\n    (a) the terms and conditions of the arrangements (for example, extended payment terms and security or guarantees provided). However, an entity shall disclose separately the terms and conditions of arrangements that have dissimilar terms and conditions;\n    (b) as at the beginning of and the end of the reporting period:\n    (i) the carrying amounts, and associated line items presented in the entity’s statement of financial position, of the financial liabilities that are part of a supplier finance arrangement;\n    (ii) the carrying amounts, and associated line items, of the financial liabilities disclosed under (i) for which suppliers have already received payment from the finance providers; and\n    (iii) the range of payment due dates (for example, 30–40 days after the invoice date) for both the financial liabilities disclosed under (i) and comparable trade payables that are not part of a supplier finance arrangement. Comparable trade payables are, for example, trade payables of the entity within the same line of business or jurisdiction as the financial liabilities disclosed under (i). If ranges of payment due dates are wide, an entity shall disclose explanatory information about those ranges or disclose additional ranges (for example, stratified ranges); and\n\n(c) the type and effect of non-cash changes in the carrying amounts of the financial liabilities disclosed under (b)(i). Examples of non-cash changes include the effect of business combinations, exchange differences or other transactions that do not require the use of cash or cash equivalents (see paragraph 86).\n\n119C In applying paragraphs 119A–119B, an entity is not required to disclose:\n\n(a) comparative information for any reporting periods presented before the beginning of the annual reporting period in which the entity first applies those requirements; and\n\n(b) the information otherwise required by paragraph 119B(b)(ii)–(iii) as at the beginning of the annual reporting period in which the entity first applies those requirements.","sortOrder":11},{"sectionNumber":"Commencement of the legislative instrume","sectionType":"part","heading":"Commencement of the legislative instrument","content":"## Commencement of the legislative instrument\n\n6 For legal purposes, this legislative instrument commences on 29 June 2024.","sortOrder":12},{"sectionNumber":"Introduction","sectionType":"part","heading":"Introduction","content":"## Introduction\n\nBC1 This Basis for Conclusions summarises the Australian Accounting Standards Board’s considerations in reaching the conclusions in this Standard. It sets out the reasons why the Board developed the Standard, the approach taken to developing the Standard and the bases for the key decisions made. In making decisions, individual Board members gave greater weight to some factors than to others.","sortOrder":13},{"sectionNumber":"Background","sectionType":"part","heading":"Background","content":"## Background\n\nTier 1 amendments\n\nBC2 In June 2023, the AASB issued AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements. The Standard amends AASB 107 Statement of Cash Flows and AASB 7 Financial Instruments: Disclosures to require an entity to provide additional disclosures about its supplier finance arrangements.\n\nBC3 The additional information will enable users of financial statements to assess how supplier finance arrangements affect an entity’s liabilities, cash flows and exposure to liquidity risk. The amendments require an entity to disclose the terms and conditions of the arrangements, the carrying amount of the liabilities that are part of the arrangements, the carrying amounts of those liabilities for which the suppliers have already received payment from the finance providers, the range of payment due dates and the effect of non-cash changes.\n\nBC4 These amendments arose from the issuance of International Financial Reporting Standard Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures) by the International Accounting Standards Board (IASB) in May 2023.\n\nBC5 The amendments made by AASB 2023-1 introduced disclosure requirements for entities applying Tier 1 reporting requirements. Therefore, it was appropriate for the Board to consider whether similar amendments to the Tier 2 Standard AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities were required.","sortOrder":14},{"sectionNumber":"Issue of Exposure Draft ED 328","sectionType":"part","heading":"Issue of Exposure Draft ED 328","content":"## Issue of Exposure Draft ED 328\n\nBC6 The Board’s proposals with respect to the amendments finalised in this Standard were exposed for public comment in December 2023 through Exposure Draft ED 328 Supplier Finance Arrangements: Tier 2 Disclosures.\n\nBC7 The significant issues considered by the Board in developing ED 328 are addressed in the following section.\n\nRelevance of the amendments to AASB 1060\n\nBC8 The AASB For-Profit Entity Standard-Setting Framework and the AASB Not-For-Profit Entity Standard-Setting Framework outline the approach adopted by the Board for considering whether to add to or amend disclosure requirements in AASB 1060 when the IASB makes amendments to full IFRS Standards.\n\nBC9 The standard-setting frameworks first consider whether the amendments introduce a significant recognition and measurement difference between full IFRS Standards and the IFRS for SMEs Accounting Standard. If they do not, the standard-setting frameworks state that no further action is required unless:\n\n(a) the disclosures address a matter of public policy;\n\n(b) the disclosures are of particular relevance in the Australian environment; or\n\n(c) the amendments clarify or reduce existing disclosure requirements in full IFRS Standards.\n\nBC10 The Board noted that the disclosure requirements were added to IFRS Standards to address users’ need for information relating to an entity’s liquidity position and cash flow. The feedback from Australian users reinforced the need for these disclosures.\n\nBC11 Although the Board had not received any feedback on whether these disclosures were of similar importance to users of Tier 2 financial statements, in deciding whether to propose adding disclosures about supplier finance arrangements to AASB 1060 the Board considered the principles it used when developing AASB 1060 and subsequently when considering whether to add to or amend the disclosure requirements.\n\nBC12 When developing and considering amendments to AASB 1060, the Board considers that information about short-term cash flows and obligations, commitments or contingencies, liquidity and solvency, measurement uncertainties, accounting policy choices and disaggregation of amounts presented in the financial statements would be particularly important to the users of Tier 2 financial statements.\n\nBC13 Therefore, the Board proposed amendments to AASB 1060 to require Tier 2 entities to disclose information relating to their supplier finance arrangements. The amendments would require a Tier 2 entity to include in its financial statements the same specific disclosures that AASB 2023-1 requires in the financial statements of entities applying Tier 1 reporting requirements. The Board considered the proposed disclosures would provide additional information about the cash flows, liquidity and solvency of Tier 2 entities.","sortOrder":15},{"sectionNumber":"Finalisation of ED 328 proposals","sectionType":"part","heading":"Finalisation of ED 328 proposals","content":"## Finalisation of ED 328 proposals\n\nBC14 Following the consultation period and after considering the comments received, the Board decided to proceed with issuing this Standard, with minimal changes from the proposals in ED 328. The Board noted the disclosures would need to be made only where material to the entity.\n\nFeedback from respondents on ED 328 and international alignment\n\nBC15 The Board received one formal comment letter on ED 328. The feedback received indicated that, in general, the stakeholder was supportive of the proposals. However, the stakeholder provided additional feedback.\n\nBC16 The stakeholder suggested that the disclosure objective in proposed paragraph 119A in ED 328 was unnecessary. The stakeholder observed that the IASB has not generally included disclosure objectives in the IFRS for SMEs Accounting Standard and, therefore, the Board generally has also not previously included disclosure objectives in AASB 1060\\. It also observed that not including disclosure objectives is consistent with the approach proposed by the IASB in its Subsidiaries without Public Accountability: Disclosures project.\n\nBC17 The Board noted that the IASB has tentatively decided not to include the disclosure objective in its proposed amendments to add supplier finance arrangement disclosures to the IFRS for SMEs Accounting Standard.\n\nBC18 The Board considered this feedback and decided that, for consistency with the IASB’s tentative approach, it would not add the disclosure objective proposed in ED 328 to this Standard. As AASB 1060 was developed based on the requirements in the IFRS for SMEs Accounting Standard, the Board considered that following the IASB’s tentative approach was appropriate. However, the Board noted its intention to monitor future IASB decisions about supplier finance arrangement disclosures in the IFRS for SMEs Accounting Standard and consider whether further amendments are required to AASB 1060 at that time.\n\nBC19 In considering the IASB’s tentative approach and proposed amendments to the IFRS for SMEs Accounting Standard and the forthcoming Subsidiaries without Public Accountability: Disclosures Standard, the Board observed that the IASB is not proposing to include:\n\n(a) transition relief in the IFRS for SMEs Accounting Standard. The IASB does not consider transition relief necessary as it expects to issue the amendments at least two years before their application date. (The IASB has not yet considered whether transition relief may be required in the Subsidiaries without Public Accountability: Disclosures Standard.) The Board, however, considered that it is necessary to add transition relief to AASB 1060 given the short time frame between the issue of these amendments and their application date. Consequently, the transition reliefs proposed in ED 328 are included in paragraph 119C of this Standard; and\n\n(b) the final sentence in paragraph 119A of this Standard in the IFRS for SMEs Accounting Standard. However, the IASB has tentatively decided to include this sentence in proposed amendments to the Subsidiaries without Public Accountability: Disclosures Standard. The Board considered the additional information about some finance arrangements that are outside the scope of supplier finance arrangements is useful for Tier 2 entities and decided to retain this information.","sortOrder":16},{"sectionNumber":"Effective date","sectionType":"part","heading":"Effective date","content":"## Effective date\n\nBC20 The Board decided that the amendments should be made effective for annual periods beginning on or after 1 January 2024 that end on or after 30 June 2024, with earlier application permitted, as proposed in ED 328. This is consistent with the effective date of AASB 2023-1 for most Tier 1 entities.","sortOrder":17}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation remains tightly scoped to its original purpose. It is a narrow, consequential amendment designed specifically to align Tier 2 disclosure requirements with Tier 1 requirements regarding supplier finance arrangements. There is no scope creep; the standard does not introduce new recognition or measurement requirements, nor does it expand beyond the specific disclosure topic addressed in AASB 2023-1."},"complexity_factors":["Short, focused amendment (only 6 operative paragraphs plus Basis for Conclusions)","Single targeted change: extending existing Tier 1 disclosure requirements to Tier 2 entities via amendment to AASB 1060","Minimal defined terms (relies on existing definitions in AASB 1060 and cross-referenced standards)","Straightforward conditional logic: applies to Tier 2 entities preparing general purpose financial statements under AASB 1060","Limited exceptions: only transitional relief provisions in paragraph 119C (exempting comparative information and certain opening balance disclosures in first year)","Heavy reliance on external references (AASB 2023-1, AASB 1060, AASB 107, AASB 7) requiring readers to consult multiple standards for full context"],"plain_english_summary":"AASB 2024‑1 requires Tier 2 Australian entities to disclose material supplier finance arrangements—where a financier pays suppliers early and the entity pays the financier later. Affected entities must explain terms, amounts owed, suppliers paid by the financier, payment due date ranges and non‑cash changes. The change improves transparency about hidden liquidity and supply‑chain risk for users of financial statements. It applies for reporting periods starting on/after 1 Jan 2024 (early adoption permitted)."},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":true,"description":"This instrument expands the scope of AASB 1060 by extending supplier finance arrangement disclosures, previously required for Tier 1 entities, to Tier 2 entities (para 1; paras 119A–119C). It also introduces transition relief for first‑time application and retains an explanatory sentence about arrangements outside the supplier finance scope that the IASB did not include (BC19(a)–(b)). The requirement is subject to materiality and applies to annual periods beginning on or after 1 January 2024 (para 4; BC14)."},"complexity_factors":["Cross‑references to multiple standards and instruments (AASB 1060, AASB 2023‑1, AASB 107, AASB 7, AASB 1057) increasing research and application effort (Preface; BC2; para 3).","Technical accounting concepts required for disclosure (carrying amounts, financial liabilities, non‑cash changes, comparability of trade payables) that require preparer judgement (paras 119B(b)(i)–(iii), 119B(c)).","Aggregation and disaggregation rules and exceptions (aggregate disclosure, separate disclosure for dissimilar terms, stratified ranges if wide) that affect presentation choices (para 119B(a), 119B(b)(iii)).","Transition relief and limited comparative relief for first‑time adopters which impose timeline interpretation tasks (para 119C; BC19(a)).","Scope and exclusion definitions (what counts as supplier finance arrangements versus credit enhancements or payment instruments) that require entity‑specific assessment (para 119A).","Materiality qualifier (disclosures required only where material) introducing further judgment about whether to apply the requirements (BC14)."],"plain_english_summary":"This Standard amends AASB 1060 so Tier 2 entities must disclose supplier finance arrangements — the arrangements’ terms, the carrying amounts of related liabilities (including amounts already paid by finance providers), payment‑due date ranges, and non‑cash changes — for annual periods from 1 Jan 2024 (paras 1, 5, 119A–119C). Users gain more information about liquidity and cash‑flow effects. Preparers (Tier 2 entities) bear the compliance work and disclosure costs; the AASB extended Tier 1 requirements to Tier 2 while adding limited transition relief (BC19(a))."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran","history":"/api/acts/accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran/history","analysis":"/api/acts/accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran/analysis","conflicts":"/api/acts/accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran/conflicts","importantCases":"/api/acts/accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran/important-cases","documents":"/api/acts/accounting-standard-aasb-2024-1-amendments-to-australian-accounting-standards-supplier-finance-arran/documents"}}