Section 27 - Accounting Standard AASB 18 Presentation and Disclosure in Financial Statements - In most situations, the content of the discussion and analysis would cover at least the following areas: | Zoe
27 In most situations, the content of the discussion and analysis would cover at least the following areas:
(a) in relation to the statement (or statements) of financial performancestatement of profit or loss and other comprehensive income:
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AASB 1049 Whole of Government and General Government Sector Financial Reporting (October 2007)
Paragraphs 15, 27, 29, 33, 34A, 42 and 47 are amended. New text is underlined and deleted text is struck through.
Compliance with Australian Accounting St Compliance with Australian Accounting Standards and the ABS GFS Manual
Compliance with Australian Accounting Standards and the ABS GFS Manual
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15 Certain Australian Accounting Standards do not prescribe specific treatments for all items and issues within their scope. An example is AASB 101 AASB 18, which requires additional line items, headings and subtotals to be presented when such presentation is relevant to an understanding of the entity’s financial position if such presentations are necessary for a primary financial statement to provide a useful structured summary. The ABS GFS Manual specifies principles and rules for the presentation of a balance sheet prepared for GFS purposes. Those ABS GFS Manual principles and rules are required to be applied in the presentation of the whole of government statement of financial position and the GGS statement of financial position to the extent that they do not conflict with AASB 18AASB 101.
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Whole of government and GGS statements o Whole of government and GGS statements of financial position
Whole of government and GGS statements of financial position
27 The whole of government statement of financial position and the GGS statement of financial position, and notes thereto, shall be presented in a manner consistent with the requirements in AASB 18 AASB 101.
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Whole of government and GGS statements o Whole of government and GGS statements of comprehensive income
Whole of government and GGS statements of comprehensive income
29 The whole of government statement of comprehensive income and GGS statement of comprehensive income, and notes thereto, shall be presented in a manner consistent with the requirements for a single statement of comprehensive income in AASB 18AASB 101.
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33 Under AASB 18AASB 101, an entity may present a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections. The sections shall be presented together, with the profit or loss section presented first followed directly by the other comprehensive income section. An entity may present the profit or loss section in a separate statement of profit or loss. If so, the separate statement of profit or loss shall immediately precede the statement presenting comprehensive income. This Standard requires a single statement of profit or loss and other comprehensive income option to be adopted, and therefore requires all recognised income and expenses to be included in a single statement that presents the comprehensive result (total change in net worth [before transactions with owners in their capacity as owners, where they exist]).
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Whole of government and GGS statements o Whole of government and GGS statements of changes in equity
Whole of government and GGS statements of changes in equity
34A The whole of government statement of changes in equity and the GGS statement of changes in equity, and notes thereto, shall be presented in a manner consistent with the requirements in AASB 18 AASB 101.
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Notes Notes
Notes
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Other explanatory notes
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42 In relation to the requirements in paragraph 41(a)(i), differences in the key fiscal aggregates determined under the ABS GFS Manual and pursuant to paragraph 16 of this Standard arise from differences in definition, recognition, measurement and certain classification requirements. Each difference gives rise to the need for disclosure of a reconciliation and an explanation of the difference. Examples of such differences include:
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(b) in a whole of government context only:
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(ii) outgoing dividends – under the ABS GFS Manual, outgoing dividends are classified as an expense, whereas under AASB 18AASB 101 a dividend is treated as a distribution to owners.
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47 Paragraph 113 of AASB 18 112 of AASB 101 requires additional information to be provided disclosed in notes that is not presented in the statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows but is necessary for relevant to an understanding of them. Consistent with this, the components of aggregate numbers presented in those statements, including key fiscal aggregates, are disclosed in the notes where relevant.
Paragraph 20 is amended. New text is underlined and deleted text is struck through.
Disclosure of service costs and achievem Disclosure of service costs and achievements by government departments
Disclosure of service costs and achievements by government departments
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Identifying major activities of government departments
20 Judgement is required to identify those activities of a government department that warrant separate disclosure in the complete set of financial statements. Exercising this judgement involves a consideration of the following:
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(d) the concept of materiality. AASB 18 Presentation and Disclosure in Financial Statements AASB 101 Presentation of Financial Statements defines information as material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.
AASB 1053 Application of Tiers of Australian Accounting Standards (June 2010)
Paragraph 18A is amended. New text is underlined and deleted text is struck through.
Application of AASB 1
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First-time Adoption of Australian Accounting Standards
18A When applying Tier 2 reporting requirements for the first time, an entity that prepared its most recent previous financial statements in the form of special purpose financial statements:
(a) without applying, or only selectively applying, applicable recognition and measurement requirements of Australian Accounting Standards, including, if a parent entity, without presenting consolidated financial statements prepared in accordance with AASB 10 Consolidated Financial Statements (unless exempt), shall apply either:
(i) all the relevant requirements of AASB 1; or
(ii) Tier 2 reporting requirements directly using the requirements in AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors;
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| In paragraph 9, footnote 1 is amended. New text is underlined and deleted text is struck through. |
1 Under AASB 18 Presentation and Disclosure in Financial StatementsAASB 101 Presentation of Financial Statements, a complete set of financial statements includes a statement of financial position as at the beginning of the earliest comparative period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors’ in paragraph E3. New text is underlined.
1 When it issued AASB 18 Presentation and Disclosure in Financial Statements in June 2024, the AASB changed the title of AASB 108 to Basis of Preparation of Financial Statements.
AASB 1054 Australian Additional Disclosures (May 2011)
Paragraphs 9B and 17 are amended. Paragraphs IG1, IG5, IG14 and IG21 in the Implementation guidance accompanying AASB 1054 are amended. New text is underlined and deleted text is struck through.
General Purpose or Special Purpose Finan General Purpose or Special Purpose Financial Statements
General Purpose or Special Purpose Financial Statements
Information about special purpose financial statements
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9B Implementation guidance and illustrative examples for not-for-profit private sector entities accompanies this Standard. It illustrates the application of the requirements in paragraph 9A and their relationship to the requirements in AASB 101 Presentation of Financial Statements AASB 18 Presentation and Disclosure in Financial Statements for the disclosure of an entity’s material accounting policy information.
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IFRS Standard Not Yet Issued in Australia
17 When an IFRS Accounting Standard has been issued by the International Accounting Standards Board but the equivalent Australian Accounting Standard has yet to be issued by the AASB, an entity intending to comply with IFRS Accounting Standards shall disclose the information specified in paragraphs 30 and 31 of AASB 108 Basis of Preparation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors in relation to that IFRS Accounting Standard.
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Implementation guidance and illustrative examples for not-for-profit private sector entities
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IG1 The AASB has prepared this guidance and examples to explain and illustrate the application of the requirements in paragraph 9A of this Standard and their relationship to the requirements in AASB 101 Presentation of Financial Statements AASB 18 Presentation and Disclosure in Financial Statements for the disclosure of a not-for-profit private sector entity’s material accounting policy information. These requirements apply to entities applying this Standard, including those required by legislation to comply. An entity preparing special purpose financial statements that is not specifically required to comply with AASB 1054 may elect not to comply with these requirements, however, is encouraged to do so.
Disclosure of accounting policy information
IG5 Not-for-profit private sector entities required to apply AASB 1054 in their special purpose financial statements (including those lodged with ASIC or the ACNC), whether consolidated or unconsolidated, are also required to apply AASB 101 AASB 18 and AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors, including:
(a) paragraph 15 of AASB 101 6A of AASB 108, which requires the fair presentation of financial statements;
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(c) paragraph 117 of AASB 101 27A of AASB 108, which requires disclosure of material accounting policy information comprising the measurement basis (or bases) and the other accounting policies used that are relevant to an understanding of the financial statements.
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Application of the consolidation and equity accounting requirements
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IG14 The following examples illustrate how an entity might apply the disclosure requirements in paragraph 9A of this Standard within the context of the requirements in AASB 101 AASB 18 and AASB 108 referred to in paragraph IG5 above to the special purpose financial statements they prepare, on the basis of the limited facts presented. Although some aspects of the examples might be present in actual fact patterns, all relevant facts and circumstances of a particular fact pattern need to be evaluated when applying disclosure requirements of this Standard.
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Implementation guidance and illustrative examples for certain for-profit private sector entities
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Disclosure of accounting policies
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IG21 The disclosure of this information may be required by another Australian Accounting Standard, such as AASB 101 Presentation of Financial Statements AASB 18 Presentation and Disclosure in Financial Statements or AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors. Where this is the case, the entity also complies with the requirements of the other Standard.
AASB 1055 Budgetary Reporting (March 2013)
Paragraphs 6 and 10 are amended. New text is underlined and deleted text is struck through.
Budgetary Information Budgetary Information
Budgetary Information
6 Where an entity’s budgeted:
(a) statement of financial position;
(b) statement (or statements) of financial performancestatement of profit or loss and other comprehensive income;
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10 Under AASB 18 Presentation and Disclosure in Financial Statements AASB 101 Presentation of Financial Statements an entity may shall present a its statement(s) of financial performance profit or loss and other comprehensive income as either:
(a) a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections; or
(b) the profit or loss section in a separate statement of profit or loss, and a separate statement presenting comprehensive income that begins with profit or loss.
AASB 1049 Whole of Government and General Government Sector Financial Reporting limits the presentation of the statement of financial performance profit or loss and other comprehensive income of a GGS and a whole of government to the format described in (a) above. Accordingly, if a GGS or whole of government budget presented to parliament is in the format described in (b), in accordance with paragraph 6(e) of this Standard, that budgeted information would need to be restated for disclosure purposes to align with the format described in (a).
AASB 1056 Superannuation Entities (December 2023)
Paragraphs AG3, AG5, AG7, AG8, AG11, AG17, AG21, AG22 and AG38 are amended. New text is underlined and deleted text is struck through.
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Compliance with principles and requirements in other Australian Accounting Standards (paragraphs 6 and 7)
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AG3 When the recognition, measurement and disclosure principles and requirements in this Standard address the same items or events as the recognition, measurement and disclosure principles and requirements in other Australian Accounting Standards, a superannuation entity need not apply those other Standards. For example, a superannuation entity applying this Standard would
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(b) disclose information about expenses in accordance with paragraphs 9 and 22 and need not disclose information in accordance with paragraphs 78–83 and B80 of AASB 18 Presentation and Disclosure in Financial Statements 99-105 of AASB 101 Presentation of Financial Statements regarding an analysis of expenses
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AG5 When a superannuation entity applies the recognition and measurement principles and requirements in other Australian Accounting Standards, the entity would also apply any relevant disclosure principles and requirements contained in those other Standards unless they are specifically modified by this Standard. Australian Accounting Standards that contain disclosure principles and requirements, some or all of which a superannuation entity would apply, when relevant, include but are not limited to the following:
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(c) AASB 18 Presentation and Disclosure in Financial StatementsAASB 101 Presentation of Financial Statements;
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(e) AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors;
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Presentation of financial statements (pa Presentation of financial statements (paragraphs 8 to 12)
Presentation of financial statements (paragraphs 8 to 12)
AG7 Consistent with AASB 18AASB 101, alternative titles can be used for the financial statements to suit the circumstances. For example, the statement of changes in equity might be better described as a statement of changes in reserves in some circumstances.
AG8 Where a superannuation entity’s total assets differs from its total liabilities (including defined contribution member liabilities, defined benefit member liabilities and any obligations to employer-sponsors), the difference is classified as equity and presented in accordance with applicable Australian Accounting Standards. In these circumstances, consistent with paragraph 24 of AASB 1855 of AASB 101, the entity may need to present additional line items, headings and subtotals in the statement of financial position when such presentation is necessary for relevant to an understanding of the entity’s financial position.
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AG11 Superannuation entities would be expected to present the various classes of their investments in a meaningful way, consistent with the requirements of AASB 18AASB 101.
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Income statement
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AG17 A superannuation entity that presents an income statement in accordance with this Standard does not present a single statement of profit or loss and comprehensive income, or a statement of profit or loss and a separate income statement presenting and statement of comprehensive income, in accordance with AASB 18AASB.
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Statement of changes in equity/reserves
AG21 Under this Standard, the interests of members of superannuation entities are liabilities and are not regarded as meeting the definition of an ‘equity instrument’ in paragraph 11 of AASB 132 Financial Instruments: Presentation, which is “any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities”. Superannuation entities would not disclose ‘equity’ information equivalent to that required by paragraphs 130(a) and 131 of AASB 18 79(a) and 80 of AASB 101, in relation to member liabilities.
AG22 Paragraph 7 of AASB 18 6 of AASB 101 notes: entities that do not have equity as defined in AASB 132 may need to adapt the financial statement presentation of members’ interests. Consistent with this notion, superannuation entities need to exercise judgement in preparing the statement of changes in equity/reserves, including the title and content of that statement.
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Disclosures (paragraphs 20 to 32) Disclosures (paragraphs 20 to 32)
Disclosures (paragraphs 20 to 32)
AG38 In complying with the comparative information requirements of AASB 18 AASB 101 a superannuation entity discloses:
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AASB 1057 Application of Australian Accounting Standards (July 2015)
Paragraphs 7 and 20C are amended. New text is underlined and deleted text is struck through.
Application of Australian Accounting Standards
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7 Except as specified in paragraph 20C, AASB 18 Presentation and Disclosure in Financial StatementsAASB 101 Presentation of Financial Statements, AASB 107 Statement of Cash Flows, AASB 108 Basis of Preparation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors and AASB 1048 Interpretation of Standards apply to:
(a) each not-for-profit entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act;
(b) general purpose financial statements of each not-for-profit entity that is a reporting entity;
(c) each entity that elects to prepare financial statements that are, or are held out to be, general purpose financial statements;
(d) for-profit private sector entities that are required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards; and
(e) other for-profit private sector entities that are required only by their constituting document or another document to prepare financial statements that comply with Australian Accounting Standards, provided that the relevant document was created or amended on or after 1 July 2021.