Explanatory Statement
Accounting Standard AASB 2013-6
Amendments to AASB 136 arising from Reduced Disclosure Requirements
September 2013
EXPLANATORY STATEMENT
Introduction
AASB 2013-6 Amendments to AASB 136 arising from Reduced Disclosure Requirements makes amendments to AASB 136 Impairment of Assets.
The amendments made by the Standard incorporate reduced disclosure requirements into the Standard for entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements.
Main Features of the Standard
Reduced Disclosure Requirements
This Standard amends the Australian Accounting Standards – Reduced Disclosure Requirements for AASB 136 Impairment of Assets. AASB 1053 provides further information regarding the differential reporting framework and the two tiers of reporting requirements for preparing general purpose financial statements.
Application Date
This Standard applies to annual reporting periods beginning on or after 1 January 2014. Earlier application of the Standard is permitted for annual reporting periods beginning on or after 1 July 2009 but before 1 January 2014, provided that AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets are also adopted for the same period.
Consultation Prior to Issuing the Standard
These amendments result from the application of the AASB’s ‘Tier 2 Disclosure Principles’ and are based on the proposals that were included in Tier 2 Supplement to ED 235 Recoverable Amount Disclosures for Non-Financial Assets.
The one submission received on the Exposure Draft was supportive of the proposals. The AASB considered the submission received in finalising AASB 2013-6.
A Regulation Impact Statement has not been prepared in connection with the issue of the 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.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
Accounting Standard AASB 2013-6
Amendments to AASB 136 arising from Reduced Disclosure Requirements
Overview of the Accounting Standard
AASB 2013-6 makes amendments to AASB 136 Impairment of Assets to incorporate reduced disclosure requirements into the Standard for entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements.
Human Rights Implications
This Standard is issued by the AASB in furtherance of the objective of facilitating the Australian economy. It does not diminish or limit any of the applicable human rights or freedoms, and thus does not raise any human rights issues.
Conclusion
This Standard is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
Accounting Standard AASB 2013-6 Amendments to AASB 136 arising from Reduced Disclosure Requirements, enacted in 2013, is an amendment to AASB 136 Impairment of Assets designed to incorporate reduced disclosure requirements for entities preparing general purpose financial statements under Australian Accounting Standards. This amendment aims to streamline the reporting process for certain entities by reducing the volume of information they need to disclose while maintaining the integrity and relevance of financial reporting. The Australian Accounting Standards Board (AASB), acting under the authority granted by the Parliament of Australia, developed this Standard to address the need for a more efficient disclosure regime without compromising the quality of financial information. The policy objective of the amendment is to facilitate the Australian economy by easing the reporting burden on qualifying entities, thereby encouraging compliance and enhancing the efficiency of financial reporting.
Scope and Application
The Accounting Standard AASB 2013-6, which amends AASB 136 Impairment of Assets, applies to entities preparing general purpose financial statements in accordance with Australian Accounting Standards, specifically under the Reduced Disclosure Requirements. The standard was designed to implement reduced disclosure requirements for entities subject to these specific accounting standards, and it applies to annual reporting periods beginning on or after 1 January 2014. Earlier application is permitted for periods beginning between 1 July 2009 and 31 December 2013, provided that other related standards, such as AASB 1053 and AASB 2013-3, are also adopted. This legislation is part of the broader framework of accounting standards aimed at ensuring that financial reporting is conducted in a consistent and transparent manner, facilitating the Australian economy by providing clear and comparable financial information. The standard does not introduce any exclusions or exemptions but operates within the established tiers of reporting requirements under AASB 1053.
Key Provisions
The primary operative sections of AASB 2013-6 Amendments to AASB 136 arising from Reduced Disclosure Requirements (sections 1 and 2) modify AASB 136 Impairment of Assets to integrate reduced disclosure requirements into the standard for entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements. This is done to streamline the financial reporting process for certain entities by reducing the amount of information they are required to disclose. The changes made by the standard are intended to apply to annual reporting periods that commence on or after 1 January 2014, with earlier application being allowed for periods starting on or after 1 July 2009 but before 1 January 2014, provided that AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets are also adopted for the same period.
The amendments introduced by AASB 2013-6 place certain obligations and requirements on entities that are subject to the standard. For instance, entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements are required to apply the reduced disclosure requirements to their financial statements. This means that these entities will need to comply with the reduced disclosure requirements set out in AASB 136, which may result in them disclosing less information about the impairment of their assets than they would have under the previous version of the standard. Additionally, entities that choose to apply the standard earlier than the specified application date must also adopt AASB 1053 and AASB 2013-3 for the same period.
There are no explicit offences, penalties, or civil or criminal consequences mentioned in the explanatory statement for breach of the provisions of AASB 2013-6. However, entities that fail to comply with the standard may face consequences such as financial penalties, reputational damage, or legal action from regulatory bodies or other parties affected by the non-compliance. The severity of these consequences will depend on the nature and extent of the non-compliance, as well as the specific circumstances of the case. It is important for entities subject to the standard to ensure that they comply with its requirements in order to avoid any potential negative consequences.