APRA's clean sale and separation requirements are set out in APS 120 Funds Management and Securitisation and related Guidance Notes AGN 120.3 Purchase and Supply of Assets (including Securities Issued by SPVs) and AGN 120.1 Disclosure and Separation. Whenever the clean sale and separation requirements are not met, all the assets, liabilities, revenues and expenses of the SPV are to be consolidated with the ADI’s reported amounts.
Reporting period
For locally incorporated banks and foreign ADIs, the form is to be completed for the three months ending the last day of the stated reporting quarter. The completed form should be submitted to APRA within 25 business days after the end of the relevant reporting quarter.
For SSPs, Credit Unions, Cairns Penny Savings & Loans Limited, Building Societies and SCCIs, the form is to be completed as at the last day of the stated reporting quarter on a financial year-to-date basis of the ADI. SSPs should submit the completed form to APRA within 25 business days after the end of the relevant reporting quarter. Credit Unions, Cairns Penny Savings & Loans Limited, Building Societies and SCCIs should submit the completed form to APRA within 15 business days after the end of the relevant reporting quarter.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).
The general requirements of AASB 121 for translation are:
- foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date;[2]
- foreign currency non-monetary items that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction;[3]
- foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 Financial Instruments: Recognition and Measurement (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss; and
- translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
- Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
- Translation of financial reports should otherwise follow the requirements in AASB 121.
Specific instructions
Wages and salaries including provisions for employee entitlements
Note:
- Refers to gross earnings before taxation and other deductions.
- Report wages and salaries as recorded in this business’ financial or management accounts, including provisions for employee entitlements (i.e. on an accruals basis).
- Report wages and salaries paid in each State/Territory in which this business operates.
Include:
- severances, terminations and redundancies;
- salaries and fees of directors and executives;
- retainers and commissions of persons who received a retainer;
- bonuses; and
- recreation and other types of leave.
Exclude:
- salary sacrifice (include in relevant expense items);
- payments to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer; and
- payroll and fringe benefits tax.
Employer contributions to superannuation including salary sacrifice
Include:
- all contributions paid or payable (gross of contributions tax) to any superannuation fund during the quarter;
- contributions made in respect of award, superannuation guarantee and enterprise bargaining agreements; and
- contributions arising from salary sacrifice agreements.