Explanatory Statement

Accounting Standard AASB 2009-9 Amendments to Australian Accounting Standards – Additional Exemptions for First-time Adopters

September 2009

EXPLANATORY STATEMENT

Standard Amended by AASB 2009-9

This Standard makes amendments to Australian Accounting Standard AASB 1 First-time Adoption of Australian Accounting Standards.

These amendments arise from the issuance of Additional Exemptions for First-time Adopters (Amendments to IFRS 1) by the International Accounting Standards Board in July 2009.

Main Features of this Standard

Application Date

This Standard is applicable to annual reporting periods beginning on or after 1 January 2010.  Early adoption is permitted for annual reporting periods beginning on or after 1 January 2005 but before 1 January 2010.

Main Requirements

The amendments address the retrospective application of Australian Accounting Standards to ensure that entities applying Australian Accounting Standards for the first time will not face undue cost or effort in the transition process in particular situations.

The amendments:

(a) specify requirements for entities using the full cost method in place of retrospective application of Australian Accounting Standards for oil and gas assets; and

(b) exempt entities with existing leasing contracts from reassessing the classification of those contracts in accordance with Interpretation 4 Determining whether an Arrangement contains a Lease when the application of their previous accounting policies would have given the same outcome.

Consultation Prior to Issuing AASB 2009-9

The AASB issued Exposure Draft ED 168 Additional Exemptions for First-time Adopters: Proposed amendments to AASB 1 in October 2008.  ED 168 reproduced the proposals included in the IASB’s Exposure Draft Additional Exemptions for First-time Adopters (Proposed amendments to IFRS 1) (September 2008) without amendment. 

The AASB received two submissions from Australian constituents on ED 168.  Submissions received were generally supportive.  However, in its submission to the IASB, the AASB expressed particular concerns over the proposal to provide relief in respect of operations subject to rate regulation.  Those proposals were not included in the final IASB Standard.

A Regulation Impact Statement has not been prepared in connection with the issue of AASB 2009-9 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.