Section 20H - AASB 4 - Insurance Contracts - August 2015 - For the purposes of applying paragraph 20G, a change in an entity’s activities is a change that:

Section 20H - AASB 4 - Insurance Contracts - August 2015 - For the purposes of applying paragraph 20G, a change in an entity’s activities is a change that: | Zoe

20H For the purposes of applying paragraph 20G, a change in an entity’s activities is a change that:
(a) is determined by the entity’s senior management as a result of external or internal changes;
(b) is significant to the entity’s operations; and
(c) is demonstrable to external parties.
Accordingly, such a change occurs only when the entity begins or ceases to perform an activity that is significant to its operations or significantly changes the magnitude of one of its activities; for example, when the entity has acquired, disposed of or terminated a business line.
20I A change in an entity’s activities, as described in paragraph 20H, is expected to be very infrequent. The following are not changes in an entity’s activities for the purposes of applying paragraph 20G:
(a) a change in the entity’s funding structure that in itself does not affect the activities from which the entity earns income and incurs expenses.
(b) the entity’s plan to sell a business line, even if the assets and liabilities are classified as held for sale applying AASB 5 Non-current Assets Held for Sale and Discontinued Operations. A plan to sell a business line could change the entity’s activities and give rise to a reassessment in the future but has yet to affect the liabilities recognised on its statement of financial position.
20J If an entity no longer qualifies for the temporary exemption from AASB 9 as a result of a reassessment (see paragraph 20G(a)), then the entity is permitted to continue to apply the temporary exemption from AASB 9 only until the end of the annual period that began immediately after that reassessment. Nevertheless, the entity must apply AASB 9 for annual periods beginning on or after 1 January 2023. For example, if an entity determines that it no longer qualifies for the temporary exemption from AASB 9 applying paragraph 20G(a) on 31 December 2018 (the end of its annual period), then the entity is permitted to continue to apply the temporary exemption from AASB 9 only until 31 December 2019.
20K An insurer that previously elected to apply the temporary exemption from AASB 9 may at the beginning of any subsequent annual period irrevocably elect to apply AASB 9.

First-time adopter

20L A first-time adopter, as defined in AASB 1 First-time Adoption of Australian Accounting Standards, may apply the temporary exemption from AASB 9 described in paragraph 20A if, and only if, it meets the criteria described in paragraph 20B. In applying paragraph 20B(b), the first-time adopter shall use the carrying amounts determined applying Standards at the date specified in that paragraph.
20M AASB 1 contains requirements and exemptions applicable to a first-time adopter. Those requirements and exemptions (for example, paragraphs D16–D17 of AASB 1) do not override the requirements in paragraphs 20A–20Q and 39B–39J of this Standard. For example, the requirements and exemptions in AASB 1 do not override the requirement that a first-time adopter must meet the criteria specified in paragraph 20L to apply the temporary exemption from AASB 9.
20N A first-time adopter that discloses the information required by paragraphs 39B–39J shall use the requirements and exemptions in AASB 1 that are relevant to making the assessments required for those disclosures.

Temporary exemption from specific requirements in AASB 128

20O Paragraphs 35–36 of AASB 128 Investments in Associates and Joint Ventures require an entity to apply uniform accounting policies when using the equity method. Nevertheless, for annual periods beginning before 1 January 2023, an entity is permitted, but not required, to retain the relevant accounting policies applied by the associate or joint venture as follows:
(a) the entity applies AASB 9 but the associate or joint venture applies the temporary exemption from AASB 9; or
(b) the entity applies the temporary exemption from AASB 9 but the associate or joint venture applies AASB 9.

20HFor the purposes of applying paragraph 20G, a change in an entity’s activities is a change that:

Get a plain-English read of 20H