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7.1.11 AASB 18 issued in June 2024 amended paragraphs 5.6.5, 5.6.7, 5.7.10, 6.5.11, 6.5.12, 6.5.14, 6.5.15, 6.7.2, 7.2.1 and B4.1.2A. An entity shall apply those amendments when it applies AASB 18.
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Classification (Chapter 4)
Classification of financial assets (Section 4.1)
The entity’s business model for managing financial assets
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B4.1.2A An entity’s business model refers to how an entity manages its financial assets in order to generate cash flows. That is, the entity’s business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. Consequently, this assessment is not performed on the basis of scenarios that the entity does not reasonably expect to occur, such as so-called ‘worst case’ or ‘stress case’ scenarios. For example, if an entity expects that it will sell a particular portfolio of financial assets only in a stress case scenario, that scenario would not affect the entity’s assessment of the business model for those assets if the entity reasonably expects that such a scenario will not occur. If cash flows are realised in a way that is different from the entity’s expectations at the date that the entity assessed the business model (for example, if the entity sells more or fewer financial assets than it expected when it classified the assets), that does not give rise to a prior period error in the entity’s financial statements (see AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors) nor does it change the classification of the remaining financial assets held in that business model (ie those assets that the entity recognised in prior periods and still holds) as long as the entity considered all relevant information that was available at the time that it made the business model assessment. However, when an entity assesses the business model for newly originated or newly purchased financial assets, it must consider information about how cash flows were realised in the past, along with all other relevant information.
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph 7.2.1. New text is underlined.
2A 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.
Part Part 7 - Accounting Standard AASB 18 Presentation and Disclosure in Financial Statements - Effective date and transition | Zoe
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph C2. New text is underlined.
1A 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.
Paragraph AG1 in the Australian application guidance accompanying AASB 10 is amended. New text is underlined and deleted text is struck through.
Australian application guidance
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Exemption from presenting consolidated financial statements
AG1 The following table summarises the circumstances in which the exemption from presenting consolidated financial statements set out in paragraphs 4-Aus4.2 of this Standard may be available to a parent entity. The exemption is available only if the requirements of those paragraphs are satisfied. For example, the exemption is not available to a parent entity if it is a disclosing entity.
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\* The exemption would not be available by reference to the intermediate parent when it is a for-profit public sector entity unable to claim compliance with IFRSs – see paragraph Aus16.2 of AASB 101 Presentation of Financial Statements.
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AASB 11 Joint Arrangements (July 2015)
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph C1B. New text is underlined.
1A 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 12 Disclosure of Interests in Other Entities (August 2015)
Paragraph B14 is amended and paragraph C1E is added. New text is underlined and deleted text is struck through.
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Summarised financial information for subsidiaries, joint ventures and associates (paragraphs 12 and 21)
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B14 The summarised financial information disclosed presented in accordance with paragraphs B12 and B13 shall be the amounts included in the Australian-Accounting-Standards financial statements of the joint venture or associate (and not the entity’s share of those amounts). If the entity accounts for its interest in the joint venture or associate using the equity method:
(a) the amounts included in the Australian-Accounting-Standards financial statements of the joint venture or associate shall be adjusted to reflect adjustments made by the entity when using the equity method, such as fair value adjustments made at the time of acquisition and adjustments for differences in accounting policies.
(b) the entity shall provide a reconciliation of the summarised financial information disclosed presented to the carrying amount of its interest in the joint venture or associate.
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C1E AASB 18 Presentation and Disclosure in Financial Statements issued in June 2024 amended paragraphs B14 and C1D. An entity shall apply those amendments when it applies AASB 18.
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors’ in paragraph C1D. 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 13 Fair Value Measurement (August 2015)
Paragraph 51 is amended and paragraph C7 is added. New text is underlined and deleted text is struck through.
Measurement
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Application to financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk
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51 An entity shall make an accounting policy decision in accordance with AASB 108 Basis of Preparation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors to use the exception in paragraph 48. An entity that uses the exception shall apply that accounting policy, including its policy for allocating bid‑ask adjustments (see paragraphs 53–55) and credit adjustments (see paragraph 56), if applicable, consistently from period to period for a particular portfolio.
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C7 AASB 18 Presentation and Disclosure in Financial Statements issued in June 2024 amended paragraph 51. An entity shall apply those amendments when it applies AASB 18.
AASB 14 Regulatory Deferral Accounts (June 2014)
Paragraphs 19, B13 and B14 are amended and paragraph C2 is added. The subheading before paragraph 9 is also amended. Paragraph 9 is not amended but is included for ease of reference. New text is underlined and deleted text is struck through.
Recognition, measurement, impairment and derecognition
Temporary exemption from paragraph 11 of AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors
9 An entity that has rate-regulated activities and that is within the scope of, and elects to apply, this Standard shall apply paragraphs 10 and 12 of AASB 108 when developing its accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances.
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Changes in presentation
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19 Notwithstanding the requirements in AASB 18 Presentation and Disclosure in Financial StatementsIn addition to the items that are required to be presented in the statement of financial position and in the statement(s) of profit or loss and other comprehensive income in accordance with AASB 101 Presentation of Financial Statements, an entity applying this Standard shall present all regulatory deferral account balances and the movements in those balances in accordance with paragraphs 20–26.
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Applicability of other Standards
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Application of AASB 133 Earnings per Share
B13 Paragraph 66 of AASB 133 requires some entities to present, in the statement of profit or loss and other comprehensive income, basic and diluted earnings per share both for profit or loss from continuing operations and profit or loss that is attributable to the ordinary equity holders of the parent entity. In addition, paragraph 68 of AASB 133 requires an entity that reports a discontinued operation to either present in the statement of profit or loss and other comprehensive income or disclose in the notes disclose the basic and diluted amounts per share for the discontinued operation, either in the statement of profit or loss and other comprehensive income or in the notes.
B14 For each earnings per share amount presented in accordance with AASB 133, an entity applying this Standard shall present additional basic and diluted earnings per share amounts that are calculated in the same way, except that those amounts shall exclude the net movement in the regulatory deferral account balances. Consistent with the requirement in paragraph 73 of AASB 133, Notwithstanding the requirements in paragraph 73C(c) of AASB 133, an entity shall present the earnings per share required by paragraph 26 of this Standard with equal prominence to the earnings per share required by AASB 133 for all periods presented.
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C2 AASB 18 issued in June 2024 amended paragraphs 19, B13 and B14 and the subheading before paragraph 9. An entity shall apply those amendments when it applies AASB 18.
AASB 15 Revenue from Contracts with Customers (December 2014)
| Paragraph 43 is amended and paragraph C1D is added. New text is underlined and deleted text is struck through. |
Recognition
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Satisfaction of performance obligations
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Measuring progress towards complete satisfaction of a performance obligation
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Methods for measuring progress
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43 As circumstances change over time, an entity shall update its measure of progress to reflect any changes in the outcome of the performance obligation. Such changes to an entity’s measure of progress shall be accounted for as a change in accounting estimate in accordance with AASB 108 Basis of Preparation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and Errors.
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C1D AASB 18 Presentation and Disclosure in Financial Statements issued in June 2024 amended paragraphs 43 and C3. An entity shall apply those amendments when it applies AASB 18.
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors,’ in paragraph C3(a). 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 16 Leases (February 2016)
| Paragraph 49 is amended and paragraph C1E is added. New text is underlined and deleted text is struck through. |
Lessee
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49 In the statement of profit or loss and other comprehensive income, a lessee shall present interest expense on the lease liability separately from the depreciation charge for the right-of-use asset. Paragraph 61 of AASB 18 Presentation and Disclosure in Financial Statements requires an entity to classify in the financing category of the statement of profit or loss interest Interest expense on the lease liability, identified by the entity applying paragraph 36(a)is a component of finance costs, which paragraph 82(b) of AASB 101 Presentation of Financial Statements requires to be presented separately in the statement of profit or loss and other comprehensive income.
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C1E AASB 18 issued in June 2024 amended paragraphs 49 and C5. An entity shall apply those amendments when it applies AASB 18.
A footnote is added to ‘AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors;’ in paragraph C5(a). 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 17 Insurance Contracts (July 2017)
Paragraphs 91, 96, 103 and B129 are amended and paragraph C2B is added. New text is underlined and deleted text is struck through.
Recognition and presentation in the statement(s) of financial performance (paragraphs B120–B136)
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Insurance finance income or expenses (see paragraphs B128–B136)