The Standard introduces several tightly specified concepts and links them to existing Standards. The principal concepts to master are: (1) what counts as a contract referencing nature‑dependent electricity; (2) the interaction with the AASB 9 “own‑use” scope exclusion (paras B2.7-B2.8 of AASB 9 are specifically referenced); (3) the narrow scope of required disclosures for Tier 2 entities; and (4) transitional relief and implementation timing.

1. Contract referencing nature‑dependent electricity. Paragraph 122A defines these contracts as those that “expose an entity to variability in the underlying amount of electricity because the source of electricity generation depends on uncontrollable natural conditions (for example, the weather).” The definition explicitly covers both contracts to buy or sell such electricity and financial instruments that reference such electricity (Amendments para 122A).

2. Interaction with AASB 9 own‑use/exclusion. The disclosure obligation targets contracts to buy nature‑dependent electricity that are outside the scope of AASB 9 under paragraphs B2.7-B2.8 (Amendments para 122A). Practically, this means the entity must determine whether the contract meets the ‘own‑use’ criteria or instead is a financial instrument within AASB 9; only those outside AASB 9’s scope trigger the Tier 2 disclosure. The Standard expressly cross‑references the AASB 9 scope treatment rather than re‑stating the own‑use criteria (Amendments para 122A; Background).

3. Required disclosures , qualitative focus. For contracts outside AASB 9’s scope and recognised as procurement contracts, Tier 2 entities must disclose, in a single note:

   • information about contractual features that expose the entity to (i) variability in the underlying amount of electricity and (ii) risk of being required to buy electricity during a delivery interval when it cannot be used (Amendments para 122A);
   • qualitative information about how the entity assesses whether a contract might become onerous, including the assumptions used (with a cross‑reference to AASB 137 Provisions, Contingent Liabilities and Contingent Assets) (Amendments para 122A);
   • qualitative information about the effects on the entity’s financial performance for the reporting period (Amendments para 122A).

The Board explicitly limited Tier 2 disclosures to qualitative items because it judged that quantitative requirements would be “excessive” for Tier 2 entities, as the preparer costs would likely outweigh user benefits (Relevance of the amendments to AASB 1060, para 2.2.2.2 subpara 2).

4. Hedge accounting and cross‑note cross‑referencing not extended. AASB 2025‑1 for Tier 1 permitted hedge accounting and added hedge disclosures; the Board chose not to extend those additional hedge‑specific disclosure requirements to AASB 1060 for Tier 2 entities (Relevance of the amendments to AASB 1060, para 2.2.2.2 subpara 3). Likewise, while full AASB standards were amended to require cross‑referencing between notes for entities holding multiple such contracts recognised in different ways, AASB 1060 retains its prior approach: general cross‑reference requirements remain but the Board did not require cross‑referencing between notes for Tier 2 (Relevance para 2.2.2.2 subpara 4).

5. Transitional and timing mechanics. The amendments waive comparative disclosure obligations for periods presented prior to first application (Amendments para 122B). In addition, 122C provides relief from certain quantitative items that would otherwise be required by paragraph 106(b) on initial adoption of AASB 2025‑1 (Amendments para 122C). Application and legal commencement dates are specified (Application; Commencement).

These concepts slot into existing reporting architectures: AASB 1060 is the simplified Tier 2 disclosure Standard; AASB 9 and AASB 7 are the instruments modified for Tier 1; AASB 137 is the reference point for onerousness assessment. The Board’s Basis for Conclusions documents these linkages and explains the principled trade‑offs behind the qualitative‑only approach for Tier 2 entities (Background; Relevance).

The Standard applies to Tier 2 entities that prepare general purpose financial statements in accordance with AASB 1060, as applied under AASB 1057 Application of Australian Accounting Standards (Application para 1). That encompasses both for‑profit and not‑for‑profit Tier 2 entities that meet the AASB’s Tier 2 criteria and prepare Tier 2 general purpose financial statements.

More precisely, the disclosure obligation only affects Tier 2 entities that have contracts to buy nature‑dependent electricity which:

• are recognised as procurement contracts; and
• are outside the scope of AASB 9 under paragraphs B2.7-B2.8 of AASB 9 (Amendments para 122A).

Thus, a Tier 2 entity that (i) holds no contracts referencing nature‑dependent electricity, or (ii) holds such contracts that are within AASB 9’s scope as financial instruments, will not be required under this Standard to make the new single‑note disclosures. The Standard therefore targets a subset of reporting entities , those Tier 2 preparers that use procurement contracts to secure supply from nature‑dependent generation sources such as wind and solar, and whose contracts are treated outside AASB 9 as procurement arrangements.

The Board’s Basis for Conclusions shows its practical assessment of affected parties. It records that Australian user feedback (predominantly representing Tier 1 users) supported Tier 1 disclosures, but the Board received no feedback specifically about Tier 2 users (Relevance para 2.1.4). In deciding the content for Tier 2, the Board applied the Tier 2 standard‑setting frameworks and judged that qualitative procurement disclosures would be useful to users of Tier 2 financial statements (Relevance paras 2.2.1 and 2.2.2.2 subpara 1), while quantitative disclosures would impose excessive costs on preparers (Relevance para 2.2.2.2 subpara 2).

Administratively, the following parties will be operationally involved:

• preparers and finance teams of Tier 2 entities: need to identify qualifying contracts, assemble the single note, document assumptions used in onerousness assessments, and coordinate with auditors for opinion and disclosure review (Amendments para 122A; Relevance para 2.2);
• auditors and assurance providers: will evaluate whether the qualitative descriptions are supported by available evidence and whether the assessment methodology aligns with AASB 137 and applicable accounting policies (Amendments para 122A referencing AASB 137);
• users of financial statements: creditors, lenders, grantors, and other stakeholders who rely on Tier 2 financial statements for decisions related to cash flow and liquidity will receive new qualitative information on specific procurement contract risks (Relevance para 2.2.1).

Finally, the Standard permits earlier application, so an entity that wishes to adopt the new disclosures before annual periods beginning on or after 1 January 2026 may do so (Application para 1). The legislative instrument’s legal commencement is 31 December 2025 (Commencement para 1), after which entities will need to assess readiness for the reporting year starting 1 January 2026.

Duties imposed by the Standard are narrow and primarily disclosure‑focussed. The central duty is to present a single note in the financial statements that contains specified qualitative information for qualifying procurement contracts. The duty elements are:

• Identification duty: Entities must determine whether contracts they hold are “contracts referencing nature‑dependent electricity” and whether those contracts are outside the scope of AASB 9 in accordance with paragraphs B2.7-B2.8 (Amendments para 122A). This requires application of existing AASB 9 scope and own‑use criteria.

• Disclosure duty: For contracts to buy nature‑dependent electricity outside AASB 9’s scope and recognised as procurement contracts, the entity must disclose in a single note:

  1. information about contractual features that expose the entity to (a) variability in the underlying amount of electricity and (b) the risk of being required to buy electricity during a delivery interval when the entity cannot use it;
  2. qualitative information about how the entity assesses whether a contract might become onerous, including the assumptions used (with an explicit link to AASB 137); and
  3. qualitative information about the effects on the entity’s financial performance for the reporting period (Amendments para 122A).

• Transitional duties: On first application, entities are relieved from providing comparative information for prior reporting periods (Amendments para 122B) and, in the reporting period of first applying AASB 2025‑1, are not required to disclose the quantitative information that would otherwise be required by paragraph 106(b) of AASB 1060 (Amendments para 122C). Entities must understand the contours of paragraph 106(b) in AASB 1060 to apply the relief correctly.

Rights or protections in the Standard are procedural and limited:

• The Board permits earlier application, so entities have the right to adopt the disclosure requirements prior to 1 January 2026 (Application para 1).
• The transitional relief operates as a limited protection from retrospective comparative burdens (Amendments paras 122B-122C).

Operational implications of the duties:

• The identification duty forces an accounting classification choice: whether a contract is treated as “own‑use” (outside AASB 9) or as a financial instrument within AASB 9. The Standard does not alter the own‑use criteria; it cross‑references AASB 9 for that assessment (Amendments para 122A; Background).
• The onerousness disclosure duty requires preparers to adopt or apply AASB 137 assessment methods and to disclose the key assumptions used in those assessments (Amendments para 122A).
• The single‑note requirement centralises information about qualifying procurement contracts, which changes where and how entities capture and present procurement risk information.

What the Standard does not impose:

• it does not impose quantitative disclosure requirements for Tier 2 entities for these contracts (Relevance para 2.2.2.2 subpara 2);
• it does not change recognition and measurement for these contracts beyond existing AASB 9 and AASB 1060 rules (Background para 3);
• it does not introduce new mandatory hedge accounting disclosures for Tier 2 entities (Relevance para 2.2.2.2 subpara 3).

These duties should be understood as additions to the existing legal reporting framework; the Standard is made under section 334 of the Corporations Act 2001, so the resulting disclosure obligations form part of the statutory accounting standards applicable in Australian financial reporting (Accounting Standard preamble).

The Standard is issued by the Australian Accounting Standards Board under section 334 of the Corporations Act 2001 (Accounting Standard AASB 2025‑3 header). That statutory provenance means the Standard is a legislative instrument within the Australian financial reporting framework and applies to entities required by law to comply with Australian Accounting Standards (Application para 1). The text of the Standard itself does not set out penalty provisions or enforcement mechanisms.

Enforcement in practice stems from the broader statutory and regulatory architecture:

• compliance with Australian Accounting Standards is a legal requirement for entities subject to the Corporations Act reporting regime; failure to comply can affect an entity’s statutory obligations to prepare general purpose financial statements in accordance with the Corporations Act and associated regulations. The Standard’s issuance under s334 places it within that regime (Accounting Standard header).
• audit and assurance functions: auditors will assess compliance with the disclosure requirements as part of the financial statement audit or review procedures. The Standard will therefore be operationally enforced through audit opinions and associated regulatory oversight of auditors and audited entities.
• market and stakeholder pressures: lenders, investors, grantors, and counterparties may rely on statutory compliance and may apply contractual covenants or market discipline where statutory disclosures are inadequate or absent.

The Standard itself provides transitional relief (paras 122B-122C) rather than any penalty relief; it does not specify enforcement sanctions, disciplinary processes, or civil penalties. Users and preparers must therefore rely on the usual enforcement channels that apply to Australian Accounting Standards , auditing, regulator oversight (for example, Australian Securities and Investments Commission for Corporations Act‑regulated entities), and contractual or market consequences of non‑compliance. These enforcement channels are not described in the Standard text but follow from its statutory placement under s334.

Entities should therefore treat the new disclosures as binding accounting obligations from the effective dates indicated (Application; Commencement) and ensure their financial statements and audit processes incorporate the new single‑note requirements if they have qualifying contracts.

This Standard is expressly integrated with the existing Australian accounting and legal architecture. The instrument references and interacts with four main standards and legal touchpoints:

1. AASB 1060. The Standard amends AASB 1060 by inserting paragraphs 122A-122C and a new sub‑heading within the “Other Financial Instrument Issues” section (Amendments to AASB 1060). AASB 1060 is the Tier 2 simplified disclosure Standard; these amendments therefore become part of the Tier 2 disclosure set.

2. AASB 9 Financial Instruments and AASB 7 Financial Instruments: Disclosures. The Standard is a downstream, Tier 2 adaptation of amendments the Board made to those full‑GAAP Standards in AASB 2025‑1 (Preface; Background). Critically, the new Tier 2 disclosure obligation only applies to contracts that are outside AASB 9 in accordance with paragraphs B2.7-B2.8 , the own‑use scope exclusion of AASB 9 (Amendments para 122A). Entities must therefore apply AASB 9’s scope guidance to classify contracts and determine whether the AASB 1060 disclosure duty is triggered.

3. AASB 137 Provisions, Contingent Liabilities and Contingent Assets. The Standard requires qualitative disclosure about how the entity assesses whether a contract might become onerous and explicitly references AASB 137 as the standard governing onerousness assessment (Amendments para 122A). This mandates cross‑standards application in preparing that part of the single note.

4. AASB 1057 Application of Australian Accounting Standards. The Application section specifies that the amendments apply in accordance with the application of AASB 1060 set out in AASB 1057 (Application para 1). In practice, AASB 1057 governs when and how new Australian Accounting Standards take effect and how they interact with other transitional and application rules, so entities must apply those rules when adopting AASB 2025‑3.

The Board also considered the relationship between full IFRS Standards and the IFRS for SMEs Accounting Standard. The Basis for Conclusions states the amendments did not introduce significant recognition and measurement differences between full IFRS and the IFRS for SMEs Standard, so no further action was required except in cases where a disclosure is of particular relevance in the Australian environment (Relevance para 2.2.1). That background explains why the Tier 2 approach diverges in its content (qualitative only) from the Tier 1 amendments.

Practical interaction issues to note:

• scope classification under AASB 9 is the gating mechanism. Misclassification of contracts (treating them as own‑use when they are financial instruments, or vice versa) will directly determine whether the AASB 1060 disclosure duty applies (Amendments para 122A; Background).
• the Standard does not change recognition or measurement rules in AASB 9 or AASB 1060; it only adds disclosure requirements. Entities must therefore apply measurement and hedge accounting rules of AASB 9 (including any Tier 1 architecture if the entity is not Tier 2) independently from these disclosure additions (Background).
• the Standard sits as a legislative instrument under the Corporations Act (Accounting Standard header). Compliance therefore interacts with statutory reporting requirements under corporate law and with audit and regulatory oversight under that regime.
• cross‑referencing expectations differ between full Standards and AASB 1060. The Board explicitly decided not to require note cross‑referencing in respect of eligible contracts within AASB 1060 (Relevance para 2.2.2.2 subpara 4), so entities should not assume Tier 1 cross‑note mechanics when applying Tier 2.

These interactions require coordinated application across multiple accounting Standards and with the Corporations Act reporting framework to ensure correct classification, measurement, disclosure, and timing of adoption.

AASB 2025‑3 is the product of a discrete amendment process, itself responding to international changes and an earlier set of AASB amendments. The chain and key milestones in the amendment history, as recorded in the Standard and its Basis for Conclusions, are:

• International origin. The IASB issued “Contracts Referencing Nature‑dependent Electricity (Amendments to IFRS 9 and IFRS 7)” in December 2024. Those amendments prompted the AASB to develop corresponding Australian amendments (Background para 1).

• Tier 1 adoption. In February 2025 the AASB issued AASB 2025‑1 Amendments to Australian Accounting Standards - Contracts Referencing Nature‑dependent Electricity, which amended AASB 7 and AASB 9 for Tier 1 entities. AASB 2025‑1 clarified own‑use application, permitted hedge accounting for such contracts as hedging instruments, and added disclosure requirements for users to understand these contracts’ effect on financial performance and cash flows (Preface; Background para 1).

• Relevance assessment for Tier 2. The AASB considered whether the Tier 1 amendments required corresponding changes to AASB 1060 when using the Board’s Tier 2 standard‑setting frameworks. The Board found the recognition and measurement changes did not create significant differences between full IFRS Standards and the IFRS for SMEs Accounting Standard, but it undertook a targeted assessment of whether certain disclosures should be added to Tier 2 given the Australian environment and user needs (Relevance).

• Exposure Draft. The Board issued Exposure Draft ED 337 Contracts Referencing Nature‑dependent Electricity: Tier 2 Disclosures in March 2025, proposing: (a) qualitative disclosure amendments to AASB 1060 for eligible procurement contracts; (b) no additional quantitative disclosures for Tier 2; (c) no additional hedge disclosure requirements for Tier 2; (d) no note cross‑referencing requirement; and (e) transitional relief (Relevance para 2.2.2.3). The exposure draft proposed the same effective date as AASB 2025‑1 , annual periods beginning on or after 1 January 2026 (Effective date para 1).

• Consultation outcome. The Board received no comment letters on ED 337 (Finalisation of ED 337 proposals para 1). Given no submissions, the Board proceeded to issue the Standard with no changes from ED 337, aside from clarifying transitional relief provisions (Finalisation para 1).

• Final Standard and dates. AASB 2025‑3 was made by the AASB on 19 August 2025 (Accounting Standard header signed by Chair Keith Kendall). The Standard applies to annual periods beginning on or after 1 January 2026, earlier application permitted (Application para 1; Effective date para 1). For legal purposes, the legislative instrument commences on 31 December 2025 (Commencement para 1).

• Relation to AASB 1060. The Standard formally amends AASB 1060 by adding the new heading and paragraphs 122A-122C (Amendments to AASB 1060).

The amendment history demonstrates a concise, tightly circumscribed domestic response to international IFRS changes, with a separate Tier 1 package (AASB 2025‑1) and a pared‑down Tier 2 implementation (AASB 2025‑3). The Board’s materials show conscious choices to limit Tier 2 obligations to qualitative items and to provide transitional relief, based on cost‑benefit considerations recorded in the Basis for Conclusions.

The Standard’s text and accompanying Basis for Conclusions do not reference any litigation. The only consultative record noted is that the Board received no comment letters on Exposure Draft ED 337 (Finalisation para 1). The Basis for Conclusions summarises the Board’s deliberations, user feedback for Tier 1 (predominantly Tier 1 users) and the lack of submissions on the ED for Tier 2 (Relevance; Finalisation).

Because the Standard was finalised with no changes from the Exposure Draft (other than clarifying transitional relief), and because no stakeholder objections are recorded in the provided materials, there is no litigation history, no administrative appeals, and no contested proceedings cited in the instrument or in the Basis for Conclusions. Users should therefore assume the Standard has not, as of the material provided, been subject to court or tribunal proceedings documented within this instrument.

If future litigation arises (for example on classification of contracts as within or outside AASB 9, or on adequacy of qualitative disclosures), that would not be recorded in this instrument. Entities and advisers should therefore treat the Standard as a new reporting obligation established by the AASB and enforceable through the usual statutory and audit channels, not as a matter with existing adjudicated interpretations.

Several practical pitfalls and implementation traps follow directly from the Standard’s wording and the Board’s rationale. These are the concrete “watch‑outs” that preparers, auditors, and advisers should flag:

1. The scope gate is AASB 9’s own‑use exclusion. The disclosure duty applies only to contracts to buy nature‑dependent electricity that are outside the scope of AASB 9 under paras B2.7-B2.8 (Amendments para 122A). Misapplication of AASB 9 scope paragraphs will mis‑trigger or miss the disclosure obligation. Entities must document the scope analysis , why a contract is “own‑use” (outside AASB 9) or why it is a financial instrument under AASB 9 , because the disclosure duty depends on that classification (Amendments para 122A; Background).

2. “Single note” requirement is prescriptive. The Standard requires disclosure in a “single note” (Amendments para 122A). Aggregation and presentation choices matter: scattering relevant qualitative descriptions across multiple notes may fail the single‑note requirement. Preparers should consolidate the required items into one note to avoid audit challenge.

3. Qualitative nature of disclosures is both relief and risk. The Board removed quantitative requirements for Tier 2 because it judged preparer cost would outweigh benefits (Relevance para 2.2.2.2 subpara 2). But qualitative items (onerousness assessment methodology and assumptions; effects on financial performance) require narrative and may invite follow‑up questions from users. Preparers must be prepared to substantiate the assumptions and the assessment process used under AASB 137.

4. Onerousness disclosure cross‑links to AASB 137. The Standard requires qualitative information about how the entity assesses whether a contract might become onerous, including the assumptions used, and explicitly references AASB 137 (Amendments para 122A). Entities that do not have robust provisioning or estimation processes consistent with AASB 137 will face difficulty producing credible qualitative disclosures.

5. Transitional relief is limited and specific. Para 122B waives comparative information for periods before first application, but 122C limits only certain quantitative items (those otherwise required by paragraph 106(b) of AASB 1060) in the first reporting period of applying AASB 2025‑1 (Amendments paras 122B-122C). Entities must check AASB 1060 para 106(b) to understand the scope of the limited relief. Misreading the transitional relief could lead to omission of required presentational items.

6. Hedge accounting consequences are not covered for Tier 2. AASB 2025‑1 permitted hedge accounting treatment for Tier 1 entities for certain contracts, with hedge disclosures. AASB 2025‑3 does not extend additional hedge disclosure requirements to Tier 2 (Relevance para 2.2.2.2 subpara 3). Tier 2 entities that are hedging exposures using those contracts should not expect the extra Tier 1 hedge disclosures to automatically apply; they must apply existing AASB 1060 hedge disclosure rules and consider whether hedge accounting is available under AASB 9.

7. Cross‑note cross‑referencing not required. The Board deliberately did not require note cross‑referencing for Tier 2 (Relevance para 2.2.2.2 subpara 4). Entities with complex portfolios of such contracts recognised in different ways should not assume cross‑note tracing will be compulsory; however, omission of cross‑referencing can make the single note less informative unless preparers include sufficient signposts.

8. Timing and legal commencement. The Standard legally commences 31 December 2025 but applies to annual periods beginning on or after 1 January 2026, with earlier application permitted (Commencement para 1; Application para 1). Entities with non‑calendar reporting years must map their reporting period start dates carefully to determine whether they must apply the new disclosure for the 2026 reporting year and should plan disclosure drafting accordingly.

9. Documentation and audit trail expectations. Because the disclosures are qualitative and rely on assumptions and assessments, auditors will expect documented methodologies, assumptions, scenario analyses, and governance notes showing who made the underpinning decisions. The Board’s rationale that quantitative disclosures would be costly does not remove the need for substantive evidence supporting qualitative statements.

10. Interaction with contracts drafted for physical delivery or financial settlement. The Standard covers both contracts to buy or sell nature‑dependent electricity and financial instruments that reference such electricity (Amendments para 122A). Careful contract analysis is required to determine the legal and accounting nature of the contract (for example, whether contractual terms effectively result in physical procurement or in financial exposure), because the required disclosure depends on that distinction.

These “gotchas” derive directly from the amendment text and the Basis for Conclusions; preparing for them will reduce the risk of incomplete disclosure or audit qualification.

Below is a practical compliance checklist and step‑by‑step procedure, grounded in the Standard’s wording and transitional rules. It is written for Tier 2 preparers, finance teams, and their auditors or advisers.

1. Governance and project scoping

   • Appoint a responsible officer (CFO or senior accounting manager) to lead the assessment of existing electricity contracts and oversee disclosure drafting (Amendments para 122A).
   • Establish a cross‑functional team including procurement, legal, treasury, and energy‑contract managers to identify all contracts referencing nature‑dependent electricity and to gather contract terms and delivery profiles.

2. Contract inventory and classification

   • Compile a complete register of contracts that reference nature‑dependent electricity (both physical procurement and financial references) and map each contract to: a) whether it is a contract to buy nature‑dependent electricity or a financial instrument referencing such electricity (Amendments para 122A); b) whether it is recognised as a procurement contract; and c) whether it falls outside AASB 9 under paras B2.7-B2.8 (apply AASB 9 own‑use criteria).
   • Document the AASB 9 scope analysis for each contract and retain legal and commercial evidence supporting the classification, as the disclosure duty depends on the outcome (Amendments para 122A).

3. Determine disclosure population

   • Select contracts that meet the three gating conditions: contract referencing nature‑dependent electricity, recognised as procurement, and outside AASB 9 scope (Amendments para 122A).
   • For contracts within AASB 9, follow existing financial instrument disclosure frameworks; AASB 1060 does not add new Tier 2 obligations for those contracts under this Standard.

4. Prepare the single note

   • Draft one consolidated note covering all qualifying contracts, as the Standard requires a “single note in its financial statements” (Amendments para 122A).
   • Include the following qualitative descriptions: a) contractual features exposing the entity to variability in the underlying electricity quantity (for example, variability in generation due to weather, firming requirements, take‑or‑pay or minimum delivery clauses) and the risk of being required to buy electricity during delivery intervals when the entity cannot use it (Amendments para 122A); b) how the entity assesses whether a contract might become onerous, referencing the methodology under AASB 137 and listing key assumptions used (Amendments para 122A; reference to AASB 137); c) qualitative description of the effects on the entity’s financial performance for the reporting period (Amendments para 122A).
   • Avoid presenting quantitative metrics unless voluntary: Tier 2 disclosure requirements are qualitative only, and the Board has explicitly judged that quantitative requirements would be excessive (Relevance para 2.2.2.2 subpara 2).

5. Support with evidence and documentation

   • Maintain written records of assumptions, scenario analysis, and governance sign‑offs supporting the onerousness assessment and the qualitative statements about financial effects (Amendments para 122A).
   • Where relevant, produce supporting schedules for internal use and for auditor inspection, showing contractual delivery profiles, historical dispatch variability and evidence of inability to use electricity in specific delivery intervals.

6. Apply transitional relief correctly

   • If this is the entity’s first year applying the Tier 2 disclosure requirements, do not present comparative qualitative disclosures for reporting periods before first application (Amendments para 122B).
   • If the entity is first applying AASB 2025‑1 in the reporting period, the entity is not required to disclose the quantitative information that would otherwise be required by paragraph 106(b) in the reporting period of first application (Amendments para 122C). Review AASB 1060 para 106(b) to understand what quantitative items are covered by this relief.

7. Coordinate with audit and external reporting timetables

   • Present the draft single note to auditors early, with complete supporting evidence, to address any auditor queries about scope classification and the AASB 137 assessment process.
   • Reconcile language in the single note about financial performance effects with the financial statements’ primary statements and other notes to ensure consistency and avoid apparent contradictions.

8. Consider voluntary enhancements

   • Although the Standard requires only qualitative disclosures for Tier 2, management may choose to provide selective quantitative information voluntarily if it materially aids user understanding. If so, document the basis for quantification and ensure it is prepared with the same rigour as required financial numbers.

9. Update policies and templates

   • Amend financial statement note templates and accounting policies to incorporate the new single‑note structure and to reference AASB 9 scope testing and AASB 137 methodology.
   • Train preparers on the AASB 9 own‑use scope tests and on the needed documentation for onerousness assessments.

10. Timeline mapping

• For annual periods beginning on or after 1 January 2026, ensure the single note is included in financial statements for that reporting period (Application para 1; Effective date para 1).
• Consider earlier application if operationally ready (Application para 1).

By following these steps, a Tier 2 entity will meet the disclosure duties set out in paragraphs 122A-122C. The emphasis should be on robust contract classification, consistent application of AASB 137 methodology for onerousness assessment, and clear narrative exposition of how qualifying contracts affect financial performance and cash flows for the reporting period.

Compliance will reduce the risk of omission or audit queries and ensure the entity’s financial statements meet the narrow, qualitative disclosure expectations established by AASB 2025‑3.