Effective date and transitionEffective date and transition

Effective date and transition

1. The financial period in which an entity is first required to apply AASB S2 is specified in the Corporations Act as amended by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024. It specifies three application dates (financial years beginning on or after 1 January 2025, 1 July 2026 and 1 July 2027) for the various classes of entity, based on entity size or, for entities reporting under the National Greenhouse and Energy Reporting Scheme, on level of emissions.
2. To support the Corporations Act requirements, AASB S2 has an effective date of annual reporting periods beginning on or after 1 January 2025.
3. In selecting the effective date for the amendments set out in AASB S2025-1, the AASB considered the fact that there are existing transition reliefs applicable to greenhouse gas emissions disclosure requirements. Specifically, in the first annual reporting period in which an entity applies AASB S2, the following transition reliefs are available:
   1. if, in the annual reporting period immediately preceding the date of initial application the entity used a method for measuring its greenhouse gas emissions other than the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004), the entity is permitted to continue using that other method; and
   2. an entity is not required to disclose its Scope 3 greenhouse gas emissions, which includes, if the entity participates in asset management, commercial banking or insurance activities, the additional information about its financed emissions.
4. AASB S2025-1 has an effective date of annual reporting periods beginning on or after 1 January 2027, with earlier application permitted, which aligns with the effective date of the amendments to IFRS S2. However, entities required to comply with AASB S2 follow their application date as set out in the legislation. By permitting early application of AASB S2025-1, entities can apply the amendments to annual reporting periods beginning on or after 1 January 2025. Entities applying the amendments early need to disclose that fact.
5. The amending Standard also introduces transition provisions relating to comparative information that would apply to entities that apply the unamended AASB S2 to one reporting period and subsequently apply the amended AASB S2 to the next reporting period. These provisions have been included to align with IFRS S2. These transition provisions are not expected to be widely used by entities applying AASB S2 because Australian entities are generally expected to apply the amended AASB S2 at the earliest opportunity and transition reliefs are available in the first annual reporting period in which an entity applies AASB S2.