Section 4B - Accounting Standard AASB 18 Presentation and Disclosure in Financial Statements - When it issued AASB 18, the AASB changed the title of AASB 108. | Zoe
4B When it issued AASB 18, the AASB changed the title of AASB 108.
IG Example 11 in the Implementation guidance accompanying AASB 2 is amended. New text is underlined and deleted text is struck through.
Guidance on implementing
AASB 2 Share‑based Payment
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Equity‑settled share‑based payment transactions
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IG Example 11
Employee share purchase plan
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Application of requirements...
However, in some cases, the expense relating to an ESPP might not be material. AASB 108 Basis of Preparation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors states that the accounting policies in Australian Accounting Standards need not be applied when the effect of applying them is immaterial (AASB 108, paragraph 8). AASB 18 Presentation and Disclosure in Financial Statements also AASB 101 Presentation of Financial Statements states that information is 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. Materiality depends on the nature or magnitude of information, or both. An entity assesses whether information, either individually or in combination with other information, is material in the context of its financial statements taken as a whole (AASB 18, paragraphs B1–B5AASB 101, paragraph 7). Therefore, in this example, the entity should consider whether the expense of CU256,000 is material.
AASB 3 Business Combinations (August 2015)
Paragraphs 50 and B64 are amended. Paragraph 64R is added. New text is underlined and deleted text is struck through.
The acquisition method
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Measurement period
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50 After the measurement period ends, the acquirer shall revise the accounting for a business combination only to correct an error in accordance with AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors.
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64R AASB 18 Presentation and Disclosure in Financial Statements issued in June 2024 amended paragraphs 50 and B64. An entity shall apply those amendments when it applies AASB 18.
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Disclosures (application of paragraphs 59 and 61)
B64 To meet the objective in paragraph 59, the acquirer shall disclose the following information for each business combination that occurs during the reporting period:
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(q) the following information:
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If disclosure of any of the information required by this subparagraph is impracticable, the acquirer shall disclose that fact and explain why the disclosure is impracticable. This Standard uses the term ‘impracticable’ with the same meaning as in AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors.
AASB 4 Insurance Contracts (August 2015)
Paragraphs 13, 34 and 35J are amended. New text is underlined and deleted text is struck through. These amendments apply only if an entity applies AASB 18 early – to a period for which AASB 4 is applicable to the entity. AASB 4 is fully superseded by AASB 17 for periods beginning on or after 1 July 2026.
Recognition and measurement
Temporary exemption from some other Australian Accounting Standards
13 Paragraphs 10–12 of AASB 108 Basis of Preparation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors specify criteria for an entity to use in developing an accounting policy if no Standard applies specifically to an item. However, this Standard exempts an insurer from applying those criteria to its accounting policies for:
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Discretionary participation features
Discretionary participation features in insurance contracts
34 Some insurance contracts contain a discretionary participation feature as well as a guaranteed element. The issuer of such a contract:
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(c) may recognise all premiums received as revenue without separating any portion that relates to the equity component. The resulting changes in the guaranteed element and in the portion of the discretionary participation feature classified as a liability shall be recognised in profit or loss. If part or all of the discretionary participation feature is classified in equity, a portion of profit or loss may be attributable to that feature (in the same way that a portion may be attributable to noncontrolling interests). The issuer shall recognise the portion of profit or loss attributable to any equity component of a discretionary participation feature as an allocation of profit or loss, not as expense or income (see AASB 101 Presentation of Financial StatementsAASB 18 Presentation and Disclosure in Financial Statements).
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The overlay approach
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35J When an entity de-designates a financial asset applying paragraph 35I(a), it shall reclassify from accumulated other comprehensive income to profit or loss as a reclassification adjustment (see AASB 101AASB 18) any balance relating to that financial asset.
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AASB 5 Non‑current Assets Held for Sale and Discontinued Operations (August 2015)
Paragraphs 2, 3, 5A, 5B, 13, 17, 26A, 28, 33–36A, 38, 39 and 41, and the headings before paragraphs 31 and 38, are amended. Paragraph 31 is not amended but included for ease of reference. Paragraph 44N is added. New text is underlined and deleted text is struck through.
2 The classification, and presentation and disclosure requirements of this Standard apply to all recognised non‑current assets1 and to all disposal groups of an entity. The measurement requirements of this Standard apply to all recognised non‑current assets and disposal groups (as set out in paragraph 4), except for those assets listed in paragraph 5 which shall continue to be measured in accordance with the Standard noted.
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3 Assets classified as non‑current in accordance with AASB 18 Presentation and Disclosure in Financial Statements AASB 101 Presentation of Financial Statements shall not be reclassified as current assets until they meet the criteria to be classified as held for sale in accordance with this Standard. Assets of a class that an entity would normally regard as non‑current that are acquired exclusively with a view to resale shall not be classified as current unless they meet the criteria to be classified as held for sale in accordance with this Standard.
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5A The classification, presentation, and measurement and disclosure requirements in this Standard applicable to a non‑current asset (or disposal group) that is classified as held for sale apply also to a non‑current asset (or disposal group) that is classified as held for distribution to owners acting in their capacity as owners (held for distribution to owners).
5B This Standard specifies the disclosures required in respect of non‑current assets (or disposal groups) classified as held for sale or discontinued operations. Disclosures in other Standards do not apply to such assets (or disposal groups) unless those Standards require:
(a) specific disclosures in respect of non‑current assets (or disposal groups) classified as held for sale or discontinued operations; or
(b) disclosures about measurement of assets and liabilities within a disposal group that are not within the scope of the measurement requirement of AASB 5 and such disclosures are not already provided in the other notes to the financial statements.
Additional disclosures about non‑current assets (or disposal groups) classified as held for sale or discontinued operations may be necessary to comply with the disclosure general requirements of AASB 18 and the requirements of AASB 108 Basis of Preparation of Financial StatementsAASB 101, in particular paragraphs 6A and 31A of AASB 108 15 and 125 of that Standard.
Classification of non‑current assets (or disposal groups) as held for sale or as held for distribution to owners
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Non‑current assets that are to be abandoned
13 An entity shall not classify as held for sale a non‑current asset (or disposal group) that is to be abandoned. This is because its carrying amount will be recovered principally through continuing use. However, if the disposal group to be abandoned meets the criteria in paragraph 32(a)–(c), the entity shall present or disclose the results and cash flows of the disposal group as discontinued operations in accordance with paragraphs 33 and 34 at the date on which it ceases to be used. Non‑current assets (or disposal groups) to be abandoned include non‑current assets (or disposal groups) that are to be used to the end of their economic life and non‑current assets (or disposal groups) that are to be closed rather than sold.
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Measurement of non‑current assets (or disposal groups) classified as held for sale
Measurement of a non‑current asset (or disposal group)
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17 When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value. Any increase in the present value of the costs to sell that arises from the passage of time shall be classified presented in profit or loss applying the requirements in AASB 18 relating to income and expenses arising from the remeasurement of a non‑current asset (or disposal group) classified as held for saleas a financing cost.
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Changes to a plan of sale or to a plan of distribution to owners
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26A If an entity reclassifies an asset (or disposal group) directly from being held for sale to being held for distribution to owners, or directly from being held for distribution to owners to being held for sale, then the change in classification is considered a continuation of the original plan of disposal. The entity:
(a) shall not follow the guidance in paragraphs 27–29 to account for this change. The entity shall apply the classification, presentation, and measurement and disclosure requirements in this Standard that are applicable to the new method of disposal.
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28 The entity shall include any required adjustment to the carrying amount of a non‑current asset that ceases to be classified as held for sale or as held for distribution to owners in profit or loss6 from continuing operations in the period in which the criteria in paragraphs 7–9 or 12A, respectively, are no longer met. Financial statements for the periods since classification as held for sale or as held for distribution to owners shall be amended accordingly if the disposal group or non‑current asset that ceases to be classified as held for sale or as held for distribution to owners is a subsidiary, joint operation, joint venture, associate, or a portion of an interest in a joint venture or an associate. The entity shall present that adjustment in the same line item caption in the statement of comprehensive income used to present a gain or loss, if any, recognised in accordance with paragraph 37.
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Presentation and disclosure
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Discontinued Presenting discontinued operations
31 A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. In other words, a component of an entity will have been a cash-generating unit or a group of cash-generating units while being held for use.
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