s Updated as at 17 February 2017 This document outlines all standards issued by the AASB and the IASB which will be applicable for the first time or available for early adoption by for-profit entities (not-for-profit entities should refer to Not-for-profit Standards on Issue) for any financial year ending on or after 30 June 2015. It will assist preparers of financial reports to: ensure all AASBs and Interpretations that are mandatory for adoption have been applied in the correct period identify and consider AASBs and Interpretations not yet mandatory which may have relevance to an entity upon adoption. AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors requires specific disclosures to be made when the adoption of a new or revised AASB or Interpretation results in a change in existing policy or new policy that is significant. AASB 108 also requires disclosure of the possible impact of relevant AASBs and Interpretations on issue but not yet adopted. Tables 1 and 2 serve as a checklist to assist in the preparation of such disclosures. IASB awaiting approval by AASB Table 1: contains all standards and interpretation issued by the IASB that the AASB has yet to endorse. In order to claim compliance with IFRSs, entities must disclose the possible impact of relevant IASBs and IFRIC Interpretations on issue but not yet adopted. Accordingly, the impact of the IASBs and IFRICs in Table 1 would need to be included in such disclosures, if relevant. These standards and interpretation cannot be (early) adopted until made by the AASB. AASBs and interpretations currently on issue Table 2: includes all standards and interpretations available for early adoption at 30 June 2017. Table 3: contains all standards and interpretations that are mandatorily applicable for the first time for years ended 30 June 2017. Entities should ensure that they have adopted all of these standards in the 30 June 2017 financial statements. The standards and interpretations in Table 2 above are available for early adoption for entities preparing financial statements for this period. Table 4: includes all standards and interpretations applicable for the first time in years ending on or prior to 30 June 2015. The standards in Tables 2 and 3 above are generally available for early adoption for entities preparing financial statements for these periods. For those entities who have adopted AASB 1053 Applications of Tiers of Australian Accounting Standards Tables 2 and 3 only provides those standards, amendments and interpretations applicable to Tier 1 entities. For Tier 2 entities this document outlines those standards that will have an impact on recognition and measurement only. Further information Links to the relevant KPMG resources (IFRS News, In the Headlines or Reporting Updates) are included with each of the standards. In some cases the KPMG resources may not have been released as yet for all new standards and interpretations included in this edition of Standards on issue. Please refer to the KPMG website for the subsequent release of IFRS News and Reporting Updates as well as Reporting Updates on other financial reporting issues in Australia. 2017 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards 1
Table 1 IASB standards and interpretations awaiting approval by the AASB 1 IFRSs and IFRICs Application date KPMG publication Key requirements Transitional Provisions None at 17 February 2017 1 These standards and interpretations cannot be early adopted until made by the AASB. 2
Table 2 AASBs and interpretations available for early adoption for 30 June 2017 year ends AASBs and Interpretations KPMG publication Key requirements Transitional Provisions The items below are mandatory for years beginning on or after 1 January 2019 AASB 16 Leases New leases standard Introducing IFRS 16 The items below are mandatory for years beginning on or after 1 January 2018 AASB 9 Financial Instruments (December 2014) AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) AASB 2014-8 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) Application of AASB 9 (December 2009) and AASB 9 (December 2010) IFRS Financial Instruments AASB 16 removes the classification of leases as either operating leases or finance leases for the lessee effectively treating all leases as finance leases. Short-term leases (less than 12 months) and leases of low-value assets (such as personal computers) are exempt from the lease accounting requirements. There are also changes in accounting over the life of the lease. In particular, companies will now recognise a front-loaded pattern of expense for most leases, even when they pay constant annual rentals. Lessor accounting remains similar to current practice i.e. lessors continue to classify leases as finance and operating leases. The AASB has issued the complete AASB 9. The new standard includes revised guidance on the classification and measurement of financial assets, including a new expected credit loss model for calculating impairment, and supplements the new general hedge accounting requirements previously published. It supersedes AASB 9 (issued in December 2009 as amended) and AASB 9 (issued in December 2010 as amended). The application of the existing versions of AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010 including the hedging amendments made in December 2013)) from 1 February 2015 is limited to entities that have already early adopted them. Early adoption will be permitted for entities that also adopt AASB 15 Revenue from Contracts with Customers. Retrospective application with some exemptions. Early adoption is permitted for financial years beginning on or after 24 July 2014. The restatement of prior periods is not required, and is permitted only if information is available without the use of hindsight. 3
AASBs and Interpretations KPMG publication Key requirements Transitional Provisions AASB 15 Revenue from Contracts with Customers AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 AASB 2015-8 Amendments to Effective Date of AASB 15 AASB 2016-3 Amendments to Clarifications to AASB 15 AASB 2014-10 Amendments to Sale or Contribution of Assets between an Investor and its Associate or Joint Venture AASB 2015-10 Amendments to Effective Date of Amendments to AASB 10 and AASB 128 AAB 2016-5 Amendments to Classification and Measurement of Share-based Payment Transactions IFRS Revenue Transfer of assets in transaction with associate or JV Clarifying sharebased payment accounting The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. The amendments require the full gain or loss to be recognised when the assets transferred meet the definition of a business under AASB 3 Business Combinations (whether housed in a subsidiary or not). The IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. Deferring the effective date indefinitely in the Australian jurisdiction may have unintended legal consequences given AASBs are legislative instruments. Accordingly, the AASB has deferred the effective date of the amendments to 1 January 2018. The amendments clarify: cash-settled share-based payments should be measured using the same approach as for equity-settled share-based payments i.e. the modified grant date method; classification of share-based payments settled net of tax withholdings; and accounting for a modification of a share-based payment from cash-settled to equity-settled. Choice of retrospective application, or as of the application date using the cumulative effect approach. Practical expedients are available to those taking a retrospective approach. Prospective application as a practical simplification. Retrospective, or early, application is permitted if have the required information. 4
AASBs and Interpretations KPMG publication Key requirements Transitional Provisions AASB 2017-1 Amendments to Transfers of Investment Property, Annual Improvements 2014 2016 Cycle and Other Amendments AASB 2017-1 Amendments to Transfers of Investment Property, Annual Improvements 2014 2016 Cycle and Other Amendments Interpretation 22 Foreign Currency Transactions and Advance Consideration AASB 2016-6 Amendments to Applying AASB 9 Financial Instruments with AASB 4 Insurance Contracts Annual improvements to IFRS Transfers to and from investment property IFRIC 22 clarifies the transaction date to determine the exchange rate Amendments to IFRS 4 Amendments to existing accounting standards, particularly in relation to: AASB 1 removes outdated exemptions for first-time adopters of AASBs. AASB 128 clarifies that: a venture capital organisation, or other qualifying entity has an investment-by-investment choice for measuring investees at fair value; and a non-investment entity investor may elect to retain fair value accounting applied by an investment entity associate or investment entity joint venture to its subsidiaries. The amendments clarify: an entity should transfer a property to, or from, investment property when, and only when, there is evidence of a change in use; and designate the list of evidence in paragraph 57(a) (d) as a non-exhaustive list of examples instead of the previous exhaustive list. IFRIC 22 clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency. The amendments permit certain insurance companies to apply temporary exemption from implementation of AASB 9 in 2018. Retrospective application for AASB 128. Prospective application for AASB 1. Early adoption permitted. Early adoption permitted. Choice of retrospective or prospective application. Early adoption permitted. Choice of retrospective or prospective application. Temporary exemption is permitted for annual periods beginning before 1 January 2021. 5
AASBs and Interpretations KPMG publication Key requirements Transitional Provisions The items below are mandatory for years beginning on or after 1 January 2017 AASB 2016-1 Amendments to Recognition of Deferred Tax Assets for Unrealised Losses Deferred tax assets on unrealised losses The amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset. Guidance on how to determine future taxable profit for the recognition test is also provided. Additional disclosures to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as effects of changes in foreign exchange rates and changes in fair values). Early adoption permitted. Retrospective application with limited relief for opening equity adjustment. AASB 2016-2 Amendments to Disclosure Initiative: Amendments to AASB 107 Disclosure on changes in financing liabilities Early adoption permitted. Comparative information not required in first year of adoption. AASB 2017-2 Amendments to Further Annual Improvements 2014-2016 Cycle Annual improvements to IFRS Clarification of the scope of AASB 12 the disclosure requirements for interests in other entities also apply to interests that are classified as held for sale or distribution. Retrospective application. 6
Table 3 AASBs and interpretations mandatorily applicable for the first time at 30 June 2017 AASBs and Interpretations KPMG publication Key requirements Transitional Provisions The items below are mandatory for years beginning on or after 1 July 2016 AASB 1056 Superannuation Entities Reporting Update 15RU-008 The items below are mandatory for years beginning on or after 1 January 2016 AASB 1057 Application of Australian Accounting Standards AASB 2015-9 Amendments to Scope and Application Paragraphs AASB 2015-5 Amendments to Investment Entities: Applying the Consolidation Exception Reporting Update 15RU-014 Investment entity amendments deal with application issues A new Australian specific Standard for superannuation entities that will replace AAS 25 Financial Reporting by Superannuation Plans for annual reporting periods beginning on or after 1 July 2016, with early adoption permitted. The standard applies to large superannuation entities regulated by the Australian Prudential Regulation Authority (APRA) and to public sector superannuation entities. It does not apply to selfmanaged superannuation funds or small APRA funds. The AASB has reissued most of its Standards (and Interpretations) that incorporate IFRSs to make editorial changes. The editorial changes will enable the AASB to issue Australian versions of IFRSs more efficiently. As part of the reissuance, the AASB has moved the application paragraphs that identify the reporting entities and general purpose financial statements to which the pronouncements apply to a new Standard, AASB 1057 Application of Australian Accounting Standards. However, the technical application requirements have not been amended. Under the amendments: an investment entity parent is required to fair value a subsidiary providing investment-related services that is itself an investment entity; Prospective application, except that on initial application superannuation entities need not present a statement of financial position as at the beginning of the earliest comparative period. Retrospective application. 7
AASBs and Interpretations KPMG publication Key requirements Transitional Provisions Standards on Issue an intermediate parent owned by an investment entity group is exempt from preparing consolidated financial statements; and when a non-investment entity investor applies the equity method, it is permitted to retain the fair value accounting applied by its investment entity associate or joint venture. The amendments do not require any significant change to current practice, but should facilitate improved reporting, including an emphasis on only including material disclosures, clarity on the aggregation and disaggregation of line items, the presentation of subtotals, the ordering of notes and the identification of significant accounting policies. Amendments to existing accounting standards, particularly in relation to: AASB 5 guidance on changes in method of disposal AASB 7 clarifies continuing involvement for servicing contracts AASB 7 clarifies offsetting disclosures are not specifically required in interim financial statements, but may be included under the general requirements of IAS 34 AASB 119 clarifies that discount rates used should be in the same currency as the benefits are to be paid AASB 134 clarifies that disclosures may be incorporated in the interim financial statements by cross-reference to another part of the interim financial report. AASB 2015-2 Amendments to Disclosure Initiative: Amendments to AASB 101 Making financial statements more relevant AASB 2015-1 Amendments to Annual Improvements to Australian Accounting Standards 2012-2014 Cycle The Balancing Items Issue 7 Generally retrospective application for AASB 7, AASB 119 and AASB 134. General provisions of AASB 108 apply, with some transitional provisions. Prospective application for AASB 5. Early adoption of amendments to individual standards permitted. 8
AASBs and Interpretations KPMG publication Key requirements Transitional Provisions AASB 2014-9 Amendments to Equity method in Separate Financial Statements AASB 2014-6 Amendments to Agriculture: Bearer Plants AASB 14 Regulatory Deferral Accounts AASB 2014-1 Amendments to Part D: Consequential Amendments arising from AASB 14 AASB 2014-4 Amendments to Clarification of Acceptable Methods of Depreciation and Amortisation AASB 2014-3 Amendments to Accounting for Acquisitions of Interests in Joint Operations Separate financial statements Equity method In the Headlines 2014/12 In the Headlines 2014/01 In the Headlines 2014/08 Business combinations Interest in a joint operation Allows the use of the equity method in separate financial statements in the accounting for associates, joint ventures and subsidiaries. Bearer plants are now in the scope of AASB 116 Property, Plant and Equipment for measurement and disclosure purposes. Therefore, a company can elect to measure bearer plants at cost. However, the produce growing on bearer plants will continue to be measured at fair value less costs to sell under AASB 141 Agriculture. Interim guidance permitting first-time adopters of AASBs to continue using previous GAAP to account for regulatory deferral account balances while the IASB completes its comprehensive project in this area. Introduces a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate. Limited opportunity for presumption to be overcome. Clarifies that revenue-based depreciation for property, plant and equipment cannot be used. Business combination accounting required to be applied to acquisitions of interests in a joint operation that meets the definition of a business under AASB 3 Business Combinations. Retrospective application. Standards on Issue On transition, a company can elect to use the fair value of bearer plants as at the beginning of the earliest comparative reporting period as deemed cost at that date. 9
Table 4 AASBs and interpretations applicable 30 June 2016 and prior AASBs and Interpretations Application date The items below are mandatory for years ended on or after 30 June 2016 AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality 1 July 2015 AASB 2015-4 Amendments to Financial Reporting Requirements for Australian Groups with a Foreign Parent 1 July 2015 The items below are mandatory for years ended on or after 30 June 2015 AASB 2014-1 Amendments to Part A: Annual Improvements 2010-2012 and 2011-2013 Cycles 1 July 2014 AASB 2014-1 Amendments to Part B: Defined Benefit Plans: Employee Contributions (Amendments to AASB 119 Employee Benefits) 1 July 2014 AASB 2014-1 Amendments to Part C: Materiality 1 July 2014 AASB 2014-2 Amendments to AASB 1053 Transition to and between Tiers, and related Tier 2 Disclosure Requirements 1 July 2014 The items below are mandatory for years ended on or after 31 December 2014 AASB 2012-3 Amendments to Offsetting Financial Assets and Financial Liabilities 1 January 2014 AASB 2013-3 Amendments to AASB 136 Recoverable Amount Disclosures for Non-Financial Assets 1 January 2014 AASB 2013-4 Amendments to Novation of Derivatives and Continuation of Hedge Accounting 1 January 2014 AASB 2013-5 Amendments to Investment Entities 1 January 2014 AASB 2013-7 Amendments to AASB 1038 arising from AASB 10 in relation to consolidation and interests of policyholders 1 January 2014 AASB 2013-8 Amendments to Australian Implementation Guidance for Not-for-Profit Entities Control and Structured Entities 1 January 2014 AASB 2013-9 Amendments to Conceptual Framework, Materiality and Financial Instruments (December 2013) Part B Materiality 1 January 2014 Interpretation 21 Levies 1 January 2014 Contact Us If you would like to discuss any of these standards or interpretations further, please contact your KPMG advisor. a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards 10