Government loansGovernment loans

Government loans

B10 A first-time adopter shall classify all government loans received as a financial liability or an equity instrument in accordance with AASB 132 Financial Instruments: Presentation. Except as permitted by paragraph B11, a first-time adopter shall apply the requirements in AASB 9 Financial Instruments and AASB 120 Accounting for Government Grants and Disclosure of Government Assistance prospectively to government loans existing at the date of transition to Australian Accounting Standards and shall not recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequently, if a first-time adopter did not, under its previous GAAP, recognise and measure a government loan at a below-market rate of interest on a basis consistent with Australian-Accounting-Standards requirements, it shall use its previous GAAP carrying amount of the loan at the date of transition to Australian Accounting Standards as the carrying amount of the loan in the opening Australian-Accounting-Standards statement of financial position. An entity shall apply AASB 9 to the measurement of such loans after the date of transition to Australian Accounting Standards.

B11 Despite paragraph B10, an entity may apply the requirements in AASB 9 and AASB 120 retrospectively to any government loan originated before the date of transition to Australian Accounting Standards, provided that the information needed to do so had been obtained at the time of initially accounting for that loan.

B12 The requirements and guidance in paragraphs B10 and B11 do not preclude an entity from being able to use the exemptions described in paragraphs D19-D19D relating to the designation of previously recognised financial instruments at fair value through profit or loss.