Explanatory Statement

Accounting Standard AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127

March 2008

EXPLANATORY STATEMENT

Standards Amended by AASB 2008-3

This Standard makes amendments to the following Australian Accounting Standards and Interpretations:

1. AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards
2. AASB 2 Share-based Payment
3. AASB 4 Insurance Contracts
4. AASB 5 Non-current Assets Held for Sale and Discontinued Operations
5. AASB 7 Financial Instruments: Disclosures
6. AASB 101 Presentation of Financial Statements
7. AASB 107 Statement of Cash Flows
8. AASB 112 Income Taxes
9. AASB 114 Segment Reporting
10. AASB 116 Property, Plant and Equipment
11. AASB 121 The Effects of Changes in Foreign Exchange Rates
12. AASB 128 Investments in Associates
13. AASB 131 Interests in Joint Ventures
14. AASB 132 Financial Instruments: Presentation
15. AASB 133 Earnings per Share
16. AASB 134 Interim Financial Reporting
17. AASB 136 Impairment of Assets
18. AASB 137 Provisions, Contingent Liabilities and Contingent Assets
19. AASB 138 Intangible Assets
20. AASB 139 Financial Instruments: Recognition and Measurement
21. Interpretation 9 Reassessment of Embedded Derivatives
22. Interpretation 107 Introduction of the Euro.

These amendments arise from the issuance in March 2008 of the revised AASB 3 Business Combinations and the amended AASB 127 Consolidated and Separate Financial Statements, which correspond to the revised IFRS 3 Business Combinations and IAS 27 Consolidated and Separate Financial Statements, which were issued by the International Accounting Standards Board (IASB) in January 2008.

Main Features of AASB 2008-3

Application Date

This Standard is applicable to annual reporting periods beginning on or after 1 July 2009, with early adoption permitted for annual reporting periods beginning on or after 30 June 2007 but before 1 July 2009 provided the revised AASB 3 and amended AASB 127 are also adopted early for the same period.  This Standard shall only be applied when AASB 3 (March 2008) and AASB 127 (March 2008) are applied.

Main Requirements

This Standard gives effect to consequential changes arising from revised AASB 3 and amended AASB 127.  The Prefaces to those Standards summarise the main requirements of those Standards.

Consultation Prior to Issuing AASB 2008-3

The AASB issued Exposure Drafts ED 139 “Proposed Amendments to AASB 3 Business Combinations” and ED 141 Proposed Amendments to AASB 127 Consolidated and Separate Financial Statements” in July 2005, which invited comments from Australian constituents on proposed amendments to Australian equivalents to IFRSs relating to accounting for business combinations and consolidated and separate financial statements and consequential amendments to other Australian accounting Standards.  Submissions received were generally supportive.

A Regulatory Impact Statement has not been prepared in connection with the issue of AASB 2008-3 as the amendments made do not have a substantial direct or indirect impact on business or competition, are of a minor or machinery nature or clarify existing requirements.