Amendments to AASB 139Amendments to AASB 139

Amendments to AASB 139

51 Paragraphs 2(a) and AG36-AG38 are amended (new text is underlined and deleted text is struck through) and paragraph 103P is added as follows:

2 This Standard shall be applied by all entities to all types of financial instruments except:

(a) those interests in subsidiaries, associates and joint ventures that are accounted for under in accordance with AASB 10 Consolidated Financial Statements, AASB 127 Consolidated and Separate Financial Statements; or AASB 128 Investments in Associates and Joint Ventures; or AASB 131 Interests in Joint Ventures. However, entities shall apply this Standard to an interest in a subsidiary, associate or joint venture that according to AASB 127, or AASB 128 or AASB 131 is accounted for under this Standard. …

103P AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards, issued in August 2011, amended paragraphs 2(a), 15, AG3, AG4I(a) and AG36-AG38. An entity shall apply those amendments when it applies AASB 10 and AASB 11.

In paragraph AG36, ‘(including any SPE)’ in the first box of the flowchart is deleted.

AG37 The situation described in paragraph 18(b) (when an entity retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients) occurs, for example, if the entity is a special purpose entity or trust, and issues to investors beneficial interests in the underlying financial assets that it owns and provides servicing of those financial assets. In that case, the financial assets qualify for derecognition if the conditions in paragraphs 19 and 20 are met.

AG38 In applying paragraph 19, the entity could be, for example, the originator of the financial asset, or it could be a group that includes a consolidated special purpose entity subsidiary that has acquired the financial asset and passes on cash flows to unrelated third party investors.

52 Paragraphs 15 and AG3 are amended to read as follows:

15 In consolidated financial statements, paragraphs 16-23 and Appendix A paragraphs AG34-AG52 are applied at a consolidated level. Hence, an entity first consolidates all subsidiaries in accordance with AASB 10, and then applies paragraphs 16-23 and Appendix A paragraphs AG34-AG52 to the resulting group.

AG3 Sometimes, an entity makes what it views as a ‘strategic investment’ in equity instruments issued by another entity, with the intention of establishing or maintaining a long-term operating relationship with the entity in which the investment is made. The investor or joint venturer entity uses AASB 128 to determine whether the equity method of accounting is appropriate for such an investment. If the equity method is not appropriate, the entity applies this Standard to that strategic investment.