Explanatory Statement

Accounting Standard AASB 2010-1 Amendments to Australian Accounting Standards – Limited Exemption from Comparative AASB 7 Disclosures for First-time Adopters

February 2010

EXPLANATORY STATEMENT

Reasons for Issuing AASB 2010-1

AASB 2010-1 makes amendments to the following Australian Accounting Standards:

1. AASB 1 First-time Adoption of Australian Accounting Standards
2. AASB 7 Financial Instruments: Disclosures.

These amendments principally give effect to extending the transition provisions of AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments to first-time adopters of Australian Accounting Standards.

Main Features of AASB 2010-1

Application Date

This Standard is applicable to annual reporting periods beginning on or after 1 July 2010.  Early adoption is permitted for annual reporting periods beginning on or after I January 2005 but before 1 July 2010.  If an entity applies this Standard to such an annual reporting period, it shall disclose that fact.

Main Requirements

First-time adopters of Australian Accounting Standards are permitted to use the same transition provisions permitted for existing preparers of financial statements prepared in accordance with Australian Accounting Standards that are included in AASB 2009-2.

Consultation Prior to Issuing AASB 2010-1

The AASB issued Exposure Draft ED 190 Limited Exemption from Comparative AASB 7 Disclosures for First-time Adopters, the Australian equivalent to the IASB Exposure Draft Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters, in November 2009.

Two submissions were received in respect of the proposals in the ED and there was support for adopting the proposed IASB revision in Australian Accounting Standards.

A Regulatory Impact Statement has not been prepared in connection with the issue of this Standard 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.