AASB 2009-11 - Amendments to Australian Accounting Standards arising from AASB 9 - December 2009
Amendments to AASB 7Amendments to AASB 7
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16 In paragraph 4 the references to ‘AASB 139’ and in paragraph 5 the first reference to ‘AASB 139’ are replaced with ‘AASB 139 and AASB 9’.
17 A heading and paragraphs 11A, 11B, 12B-12D, 20A and 44H-44J are added, paragraphs 12 and 12A are deleted and paragraphs 2, 3, 8, 9, 20, 29 and 30 are amended as follows:
2 The principles in this Standard complement the principles for recognising, measuring and presenting financial assets and financial liabilities in AASB 132 Financial Instruments: Presentation , and AASB 139 Financial Instruments: Recognition and Measurement and AASB 9 Financial Instruments.
3 This Standard shall be applied by all entities to all types of financial instruments, except:
(a) those interests in subsidiaries, associates or joint ventures that are accounted for in accordance with AASB 127 Consolidated and Separate Financial Statements, AASB 128 Investments in Associates or AASB 131 Interests in Joint Ventures. However, in some cases, AASB 127, AASB 128 or AASB 131 permits an entity to account for an interest in a subsidiary, associate or joint venture using AASB 139 and AASB 9; in those cases, entities shall apply the requirements of this Standard. Entities shall also apply this Standard to all derivatives linked to interests in subsidiaries, associates or joint ventures unless the derivative meets the definition of an equity instrument in AASB 132.
8 The carrying amounts of each of the following categories, as specified defined in AASB 9 or AASB 139, shall be disclosed either in the statement of financial position or in the notes:
(a) financial assets measured at fair value through profit or loss, showing separately (i) those designated as such upon initial recognition and (ii) those mandatorily classified as measured at fair value held for trading in accordance with AASB 9 AASB 139;.
(b)-(d) [deleted by the IASB]
(b) held-to-maturity investments;
(c) loans and receivables;
(d) available-for-sale financial assets;
(e) financial liabilities at fair value through profit or loss, showing separately (i) those designated as such upon initial recognition and (ii) those that meet the definition of classified as held for trading in accordance with AASB 139; and.
(f) financial assets liabilities measured at amortised cost.
(g) financial liabilities measured at amortised cost.
(h) financial assets measured at fair value through other comprehensive income.
9 If the entity has designated a loan or receivable (or group of loans or receivables) as measured at fair value through profit or loss a financial asset (or group of financial assets) that would otherwise be measured at amortised cost, it shall disclose:
Part Amendments to AASB 7 - AASB 2009-11 - Amendments to Australian Accounting Standards arising from AASB 9 - December 2009 - Amendments to AASB 7 | Zoe
(a) the maximum exposure to credit risk (see paragraph 36(a)) of the loan or receivable financial asset (or group of loans or receivables financial assets) at the end of the reporting period;
(b) the amount by which any related credit derivatives or similar instruments mitigate that maximum exposure to credit risk;
(c) the amount of change, during the period and cumulatively, in the fair value of the loan or receivable financial asset (or group of loans or receivables financial assets) that is attributable to changes in the credit risk of the financial asset determined either:
...
(d) the amount of the change in the fair value of any related credit derivatives or similar instruments that has occurred during the period and cumulatively since the loan or receivable financial asset was designated.
...
Financial assets measured at fair value through other comprehensive income
11A If an entity has designated investments in equity instruments to be measured at fair value through other comprehensive income, as permitted by paragraph 5.4.4 of AASB 9, it shall disclose:
(a) which investments in equity instruments have been designated to be measured at fair value through other comprehensive income.
(b) the reasons for using this presentation alternative.
(c) the fair value of each such investment at the end of the reporting period.
(d) dividends recognised during the period, showing separately those related to investments derecognised during the reporting period and those related to investments held at the end of the reporting period.
(e) any transfers of the cumulative gain or loss within equity during the period including the reason for such transfers.
11B If an entity derecognised investments in equity instruments measured at fair value through other comprehensive income during the reporting period, it shall disclose:
(a) the reasons for disposing of the investments.
(b) the fair value of the investments at the date of derecognition.
(c) the cumulative gain or loss on disposal.
12B An entity shall disclose if, in the current or previous reporting periods, it has reclassified any financial assets in accordance with paragraph 4.9 of AASB 9. For each such event, an entity shall disclose:
(a) the date of reclassification.
(b) a detailed explanation of the change in business model and a qualitative description of its effect on the entity’s financial statements.
(c) the cumulative amount reclassified into and out of each category.
12C For each reporting period following reclassification until derecognition, an entity shall disclose for assets reclassified so that they are measured at amortised cost in accordance with paragraph 4.9 of AASB 9:
(a) the effective interest rate determined on the date of reclassification; and
(b) the interest income or expense recognised.
12D If an entity has reclassified financial assets so that they are measured at amortised cost since its last annual reporting date, it shall disclose:
(a) the fair value of the financial assets at the end of the reporting period; and
(b) the fair value gain or loss that would have been recognised in profit or loss during the reporting period if the financial assets had not been reclassified.
20 An entity shall disclose the following items of income, expense, gains or losses either in the statement of comprehensive income or in the notes:
(a) net gains or net losses on:
(i) financial assets or financial liabilities measured at fair value through profit or loss, showing separately those on financial assets or financial liabilities designated as such upon initial recognition, and those on financial assets or financial liabilities that are mandatorily measured at fair value classified as held for trading in accordance with AASB 9 AASB 139;;
(ii)-(iv) [deleted by the IASB]
(ii) available-for-sale financial assets, showing separately the amount of gain or loss recognised in other comprehensive income during the period and the amount reclassified from equity to profit or loss for the period;
(iii) held-to-maturity investments;
(iv) loans and receivables; and
(v) financial liabilities measured at amortised cost at fair value through profit or loss, showing separately those on financial liabilities designated as such upon initial recognition, and those on financial liabilities that meet the definition of held for trading in AASB 139;
(vi) financial assets measured at amortised cost;
(vii) financial liabilities measured at amortised cost; and
(viii) financial assets measured at fair value through other comprehensive income.
(b) total interest income and total interest expense (calculated using the effective interest method) for financial assets or financial liabilities that are measured at amortised cost or financial liabilities not at fair value through profit or loss;
(c) fee income and expense (other than amounts included in determining the effective interest rate) arising from:
(i) financial assets or financial liabilities measured at amortised cost or financial liabilities that are not at fair value through profit or loss; and
(ii) trust and other fiduciary activities that result in the holding or investing of assets on behalf of individuals, trusts, retirement benefit plans, and other institutions;
(d) ...
20A An entity shall disclose an analysis of the gain or loss recognised in the statement of comprehensive income arising from the derecognition of financial assets measured at amortised cost, showing separately gains and losses arising from derecognition of those financial assets. This disclosure shall include the reasons for derecognising those financial assets.
29 Disclosures of fair value are not required:
(a) when the carrying amount is a reasonable approximation of fair value, for example, for financial instruments such as short-term trade receivables and payables;
(b) for an investment in equity instruments that do not have a quoted market price in an active market, or derivatives linked to investments in equity instruments that do not have a quoted market price in an active market that are such equity instruments, that is measured at cost in accordance with AASB 139 because its their fair value cannot be measured reliably; or
(c) for a contract containing a discretionary participation feature (as described in AASB 4) if the fair value of that feature cannot be measured reliably.
30 In the cases described in paragraph 29(b) and (c), an entity shall disclose information to help users of the financial statements make their own judgements about the extent of possible differences between the carrying amount of those financial assets or financial liabilities contracts and their fair value, including:
(a) ...
44H AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9, issued in December 2009, amended paragraphs 2,3, 8, 9, 20, 29 and 30, added paragraphs 11A, 11B, 12B-12D and 20A and deleted paragraphs 12 and 12A. It also amended the last paragraph of Appendix A (Defined terms) and paragraphs B1, B5, B10, B22 and B27, and deleted Appendix D (Amendments to AASB 7 if AASB 2005-4 Amendments to Australian Accounting Standards (relating to the fair value option) has not been applied). An entity shall apply those amendments when it applies AASB 9.
44I When an entity first applies AASB 9, it shall disclose for each class of financial assets at the date of initial application:
(a) the original measurement category and carrying amount determined in accordance with AASB 139;
(b) the new measurement category and carrying amount determined in accordance with AASB 9;
(c) the amount of any financial assets in the statement of financial position that were previously designated as measured at fair value through profit or loss but are no longer so designated, distinguishing between those that AASB 9 requires an entity to reclassify and those that an entity elects to reclassify.
An entity shall present these quantitative disclosures in tabular format unless another format is more appropriate.
44J When an entity first applies AASB 9, it shall disclose qualitative information to enable users to understand:
(a) how it applied the classification requirements in AASB 9 to those financial assets whose classification has changed as a result of applying AASB 9.
(b) the reasons for any designation or de-designation of financial assets or financial liabilities as measured at fair value through profit or loss.
18 In Appendix A (Defined terms), the last paragraph is amended as follows:
The following terms are defined in paragraph 11 of AASB 132 or paragraph 9 of AASB 139 and are used in this Standard with the meaning specified in AASB 132 and AASB 139.
(a) amortised cost of a financial asset or financial liability
(b) available-for-sale financial assets
(b)(c) derecognition
(c)(d) derivative
(d)(e) effective interest method
(e)(f) equity instrument
(f)(g) fair value
(g)(h) financial asset
(h)(i) financial asset or financial liability at fair value through profit
or loss
(j) financial asset or financial liability held for trading
(i)(k) financial guarantee contract
(j)(l) financial instrument
(k)(m) financial liability
(l)(n) forecast transaction
(m)(o) hedging instrument
(n)(p) held for trading
(p) held-to-maturity instruments
(q) loans and receivables
(o)(r) regular way purchase or sale
19 In Appendix B (Application guidance), paragraphs B1, B5, B10, B22 and B27 are amended as follows:
B1 Paragraph 6 requires an entity to group financial instruments into classes that are appropriate to the nature of the information disclosed and that take into account the characteristics of those financial instruments. The classes described in paragraph 6 are determined by the entity and are, thus, distinct from the categories of financial instruments specified in AASB 139 and AASB 9 (which determine how financial instruments are measured and where changes in fair value are recognised).
B5 Paragraph 21 requires disclosure of the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements. For financial instruments, such disclosure may include:
(a) for financial assets or financial liabilities designated as at fair value through profit or loss:
(i) the nature of the financial assets or financial liabilities the entity has designated as at fair value through profit or loss;
(ii) the criteria for so designating such financial assets or financial liabilities on initial recognition; and
(iii) how the entity has satisfied the conditions in paragraph 9, 11A or 12 of AASB 139 for such designation. For instruments designated in accordance with paragraph (b)(i) of the definition of a financial asset or financial liability at fair value through profit or loss in AASB 139, that disclosure includes a narrative description of the circumstances underlying the measurement or recognition inconsistency that would otherwise arise. For instruments designated in accordance with paragraph (b)(ii) of the definition of a financial asset or financial liability at fair value through profit or loss in AASB 139, that disclosure includes a narrative description of how designation at fair value through profit or loss is consistent with the entity’s documented risk management or investment strategy.
(aa) for financial assets designated as measured at fair value through profit or loss:
(i) the nature of the financial assets the entity has designated as measured at fair value through profit or loss;
(ii) how the entity has satisfied the criteria in paragraph 4.5 of AASB 9 for such designation.
(b) [deleted by the IASB] the criteria for designating financial assets as available for sale.
(c) ...
B10 Activities that give rise to credit risk and the associated maximum exposure to credit risk include, but are not limited to:
(a) granting loans and receivables to customers and placing deposits with other entities. In these cases, the maximum exposure to credit risk is the carrying amount of the related financial assets.
(b) ...
B22 Interest rate risk arises on interest-bearing financial instruments recognised in the statement of financial position (e.g. loans and receivables and debt instruments acquired or issued) and on some financial instruments not recognised in the statement of financial position (e.g. some loan commitments).
B27 In accordance with paragraph 40(a), the sensitivity of profit or loss (that arises, e.g. for example, from instruments measured classified as at fair value through profit or loss and impairments of available-for-sale financial assets) is disclosed separately from the sensitivity of other comprehensive income equity (that arises, e.g. for example, from investments in equity instruments whose changes in fair value are presented in other comprehensive income classified as available for sale).
20 Appendix D (Amendments to AASB 7 if AASB 2005-4 Amendments to Australian Accounting Standards (relating to the fair value option) has not been applied) is deleted.