Amendments to AASB 7Amendments to AASB 7

Amendments to AASB 7

Scope

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5 This Standard applies to contracts to buy or sell a non-financial item that are within the scope of AASB 9.
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5B Paragraph 30A applies only to contracts to buy nature-dependent electricity that satisfy the requirements in paragraph 2.3A of AASB 9 and are outside the scope of that Standard in accordance with paragraphs B2.7–B2.8 of AASB 9.
5C Paragraph 30B applies only to contracts that satisfy the requirements in paragraph 2.3A of AASB 9 and have been designated in a cash flow hedging relationship in accordance with paragraph 6.10.1 of AASB 9.
5D Paragraph 30C applies only to contracts that satisfy the requirements in paragraph 2.3A of AASB 9 and have been entered into with regards to an entity’s electricity purchases. These contracts comprise those:
(a) within the scope of AASB 9; and
(b) outside the scope of AASB 9 in accordance with paragraph 2.4 of that Standard, including those excluded in accordance with paragraphs B2.7–B2.8 of that Standard.
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Significance of financial instruments for financial position and performance

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Other disclosures

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Contracts referencing nature-dependent electricity

30A An entity shall disclose in a single note in its financial statements information about contracts that meet the criteria set out in paragraph 5B. In particular, the entity shall disclose information that enables users of its financial statements to understand the effects these contracts have on the amount, timing and uncertainty of its future cash flows and on its financial performance. To meet these objectives, an entity shall disclose:
(a) information about contractual features that expose the entity to:
(i) variability in the underlying amount of electricity (see paragraph 2.3A of AASB 9); and
(ii) the risk that the entity would be required to buy electricity during a delivery interval in which the entity cannot use the electricity (see paragraph B2.7 of AASB 9).
(b) information about unrecognised commitments arising from such contracts as at the reporting date, including:
(i) the estimated future cash flows from buying electricity under these contracts. The entity shall apply its judgement when identifying the appropriate time bands within which to disclose the estimated future cash flows.
(ii) qualitative information about how the entity assesses whether a contract might become onerous (see AASB 137 Provisions, Contingent Liabilities and Contingent Assets), including the assumptions the entity uses in making this assessment.
(c) qualitative and quantitative information about effects on the entity’s financial performance for the reporting period. The disclosure is based on the information that is applicable to the reporting period that the entity used to assess whether it has been a net purchaser of electricity (see paragraph B2.8 of AASB 9). An entity shall disclose information for the reporting period about:
(i) the costs arising from purchases of electricity made under the contracts, disclosing separately how much of the purchased electricity was unused at the time of delivery;
(ii) the proceeds arising from sales of unused electricity; and
(iii) the costs arising from purchases of electricity made to offset sales of unused electricity.
30B An entity shall disaggregate, for its contracts that meet the criteria set out in paragraph 5C, the information the entity discloses, by risk category, about the terms and conditions of hedging instruments in accordance with paragraph 23A.
30C If an entity discloses information about other contracts referencing nature-dependent electricity as described in paragraph 5D (including those contracts described in paragraph 30B) in other notes in its financial statements, the entity shall include cross-references to those notes in the single note required by paragraph 30A.
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