Explanatory Statement
Accounting Standard AASB 2015-1
Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards
2012–2014 Cycle
January 2015
EXPLANATORY STATEMENT
Reasons for Issuing AASB 2015-1
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle makes amendments to various Australian Accounting Standards arising from the issuance of International Financial Reporting Standard Annual Improvements to IFRSs 2012–2014 Cycle in September 2014 by the IASB, and editorial corrections. The IASB’s Annual Improvements process provides a vehicle for making non-urgent but necessary amendments to Standards.
Main Features of AASB 2015-1
Main Requirements
The subjects of the principal amendments to the Standards are set out below:
Standard | Subject of amendment |
AASB 5 Non-current Assets Held for Sale and Discontinued Operations | Changes in methods of disposal. |
AASB 7 Financial Instruments: Disclosures | Servicing contracts. |
Applicability of the amendments to AASB 7 to condensed interim financial statements. |
AASB 119 Employee Benefits | Discount rate: regional market issue. |
AASB 134 Interim Financial Reporting | Disclosure of information ‘elsewhere in the interim financial report’. |
This Standard also makes various editorial corrections to Australian Accounting Standards.
Application Date
AASB 2015-1 applies to annual reporting periods beginning on or after 1 January 2016. Earlier application is permitted for annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016.
Consultation Prior to Issuing this Standard
The AASB issued Exposure Draft ED 247 Annual Improvements to IFRSs 2012–2014 Cycle in December 2013 for comment by 27 February 2014. Three submissions were received by the AASB in respect of the proposals in ED 247 and there was general support for adopting the proposals in Australian Accounting Standards. The AASB considered the comments it received on ED 247 in making its submission to the IASB and in finalising AASB 2015-1.
The AASB also considered comments received by the AASB in respect of proposals exposed for comment in Exposure Draft ED 256 Removal of Cross-References from Financial Statements to Other Documents in finalising AASB 2015-1.
A Regulation Impact Statement (RIS) has not been prepared in connection with the issue of AASB 2015-1 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 2015-1
Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle
Overview of the Accounting Standard
The amendments in AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle makes amendments to various Australian Accounting Standards arising from the International Accounting Standards Board’s (IASB) Annual Improvements process, and for editorial corrections.
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 2015-1, enacted in 2015, addresses the need to update Australian Accounting Standards to reflect the changes resulting from the International Financial Reporting Standards (IFRS) Annual Improvements process and to incorporate necessary editorial corrections. This amendment was issued by the Australian Accounting Standards Board (AASB), operating under the Australian Securities and Investments Commission (ASIC), to align Australian standards with international practices and to ensure clarity and consistency in financial reporting. The policy objective is to facilitate the Australian economy by providing a robust and internationally aligned framework for financial reporting, which supports informed decision-making by investors, regulators, and other stakeholders. The standard is designed to be applied to annual reporting periods beginning on or after 1 January 2016, with earlier application permitted under certain conditions.
Scope and Application
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle applies to entities that prepare financial reports under Australian Accounting Standards. This includes entities that report under the Corporations Act 2001 and other entities that are required to comply with Australian Accounting Standards. The amendments affect the accounting treatment of various financial items, including non-current assets held for sale and discontinued operations, financial instruments, employee benefits, and interim financial reporting. The amendments apply to annual reporting periods beginning on or after 1 January 2016, and earlier application is permitted for annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016. The amendments do not apply to consolidated financial statements, interim financial reports, or other financial information that is not required to be prepared in accordance with Australian Accounting Standards. The AASB considered submissions on the proposals in Exposure Draft ED 247 Annual Improvements to IFRSs 2012–2014 Cycle before finalising AASB 2015-1. This Standard is compatible with human rights, as it does not diminish or limit any of the applicable human rights or freedoms.
Key Provisions
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle (section 2) amends several Australian Accounting Standards to align with the International Financial Reporting Standards Annual Improvements to IFRSs 2012–2014 Cycle issued by the IASB. The main changes include amendments to AASB 5 regarding the changes in methods of disposal for non-current assets held for sale and discontinued operations, AASB 7 focusing on financial instruments disclosures, particularly in relation to servicing contracts, and AASB 119 concerning the discount rate for employee benefits. Additionally, AASB 134 is amended to require disclosure of information elsewhere in the interim financial report. These amendments apply to annual reporting periods beginning on or after 1 January 2016, with earlier application permitted.
The entities governed by AASB 2015-1 are required to implement these changes in their accounting practices and financial reporting. This includes ensuring that any financial instruments disclosures comply with the updated requirements, particularly in relation to servicing contracts. Entities must also review their methods for calculating the discount rate for employee benefits and adjust their interim financial reports to include the necessary disclosures. The standard also mandates the incorporation of editorial corrections to existing Australian Accounting Standards, ensuring clarity and consistency in financial reporting.
Breaches of AASB 2015-1 may not explicitly outline specific offences, penalties, or civil/criminal consequences within the standard itself. However, non-compliance with accounting standards generally could lead to consequences under broader corporate law, including potential fines, legal action, and reputational damage. While the specific penalties are not detailed in AASB 2015-1, entities must adhere to the requirements to avoid any legal repercussions associated with non-compliance with accounting standards.