Explanatory Statement

Accounting Standard AASB 2009-7 Amendments to Australian Accounting Standards

June 2009

EXPLANATORY STATEMENT

Standards Amended by AASB 2009-7

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

1. AASB 5 Non-current Assets Held for Sale and Discontinued Operations;
2. AASB 7 Financial Instruments: Disclosures;
3. AASB 107 Statement of Cash Flows;
4. AASB 112 Income Taxes;
5. AASB 136 Impairment of Assets;
6. AASB 139 Financial Instruments: Recognition and Measurement; and
7. Interpretation 17 Distributions of Non-cash Assets to Owners.

These amendments arise from editorial corrections by the AASB and by the International Accounting Standards Board (IASB).

Main Features of this Standard

Application Date

This Standard is applicable to annual reporting periods beginning on or after 1 July 2009.  Early adoption is permitted for annual reporting periods beginning before 1 July 2009 that end on or after 1 July 2008.

Main Requirements

The amendments to AASB 5, AASB 7, AASB 139 and Interpretation 17 correct errors that occurred in AASB 2008-12 Amendments to Australian Accounting Standards – Reclassification of Financial Assets – Effective Date and Transition, AASB 2008-13 Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners and Interpretation 17 itself.  The other amendments reflect changes made by the IASB to its pronouncements.

These editorial amendments have no major impact on the requirements of the amended pronouncements.

Consultation Prior to Issuing AASB 2009-7

The AASB issued AASB 2009-7 after publishing a draft of the proposed Standard on its website prior to the Board meeting at which it made the Standard.  The Standard makes editorial corrections to a number of AASB pronouncements, most of which were themselves subject to consultation prior to issuance.  For example, prior to issuing Interpretation 17 and
AASB 2008-13 in December 2008, the AASB invited comments from Australian constituents on the proposals regarding distributions of non-cash assets to owners and the consequential amendments to other Australian Accounting Standards resulting from the International Financial Reporting Interpretations Committee (IFRIC) Draft Interpretation D23 Distributions of Non-cash Assets to Owners.

The AASB issued AASB 2008-12 in December 2008.  The amendments included in that Standard had been issued by the International Accounting Standards Board (IASB) without due process, in order to urgently clarify the effective date and transition requirements of the amendments made in October 2008 in relation to reclassifications of financial assets.  The AASB had decided at its October 2008 meeting that it could rapidly respond to the IASB’s amendments, to ensure that Australian constituents would have available, on a timely basis, the same treatments as constituents in other jurisdictions applying International Financial Reporting Standards (IFRSs).

A Regulation Impact Statement has not been prepared in connection with the issue of AASB 2009-7 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.