AASB 2015-9 - Amendments to Australian Accounting Standards – Scope and Application Paragraphs - November 2015

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Legislation au F2015L01832 Not in force Legislative Instrument

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Explanatory Statement

Accounting Standard AASB 2015-9
Amendments to Australian Accounting Standards –
Scope and Application Paragraphs

November 2015

 

 

EXPLANATORY STATEMENT

Reasons for Issuing AASB 2015-9

AASB 2015-9 makes amendments to the following Australian Accounting Standards:

(a) AASB 8 Operating Segments;

(b) AASB 133 Earnings per Share; and

(c) AASB 1057 Application of Australian Accounting Standards.

Main Features of AASB 2015-9

Main Requirements

This Standard inserts scope paragraphs into AASB 8 and AASB 133 in place of application paragraph text in AASB 1057.

The AASB reissued AASB 8, AASB 133 and most of the Australian Accounting Standards that incorporate International Financial Reporting Standards (issued by the International Accounting Standards Board) in July and August 2015, to make editorial changes.  Those new principal versions do not include Australian application paragraphs, which were included instead in a new Standard, AASB 1057.

The application paragraphs in the previous versions of AASB 8 and AASB 133 covered scope paragraphs that appear separately in the corresponding IFRS 8 Operating Segments and IAS 33 Earnings per Share.  In moving those application paragraphs to AASB 1057 when AASB 8 and AASB 133 were reissued in August, the AASB inadvertently deleted the scope details from AASB 8 and AASB 133.  This amending Standard puts the scope details into those Standards, and removes the related text from AASB 1057.

Consequently, there is no change to the requirements or the applicability of AASB 8 and AASB 133.

Application Date

This Standard applies to annual periods beginning on or after 1 January 2016.  Early application is permitted.

Consultation Prior to Issuing this Standard

Public consultation was carried out in developing the versions of AASB 8 and AASB 133 prior to their editorial reissue in August 2015, including amendments made to them through other amending Standards.  Since the revised AASB 8 and AASB 133, in conjunction with the application requirements in AASB 1057, are the same in substance as the previous versions of the Standards, no specific consultation has been required in relation to these amendments.

A Regulation Impact Statement has not been prepared in connection with the issue of AASB 2015-9 as the amendments made are of a minor or machinery nature.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011

Accounting Standard AASB 2015-9
Amendments to Australian Accounting Standards – Scope and Application Paragraphs

Overview of the Accounting Standard

AASB 2015-9 inserts scope paragraphs into AASB 8 Operating Segments and AASB 133 Earnings per Share in place of application paragraph text in AASB 1057 Application of Australian Accounting Standards.

The AASB reissued AASB 8, AASB 133 and most of the Australian Accounting Standards that incorporate International Financial Reporting Standards (issued by the International Accounting Standards Board) in July and August 2015, to make editorial changes.  Those new principal versions do not include Australian application paragraphs, which were included instead in a new Standard, AASB 1057.

The application paragraphs in the previous versions of AASB 8 and AASB 133 covered scope paragraphs that appear separately in the corresponding IFRS 8 Operating Segments and IAS 33 Earnings per Share.  In moving those application paragraphs to AASB 1057 when AASB 8 and AASB 133 were reissued in August, the AASB inadvertently deleted the scope details from AASB 8 and AASB 133.  This amending Standard puts the scope details into those Standards, and removes the related text from AASB 1057.

Consequently, there is no change to the requirements or the applicability of AASB 8 and AASB 133.

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

The Accounting Standards Board (AASB) introduced AASB 2015-9 in November 2015 to address an oversight in the reissuance of AASB 8 Operating Segments and AASB 133 Earnings per Share. These standards were reissued in July and August 2015 to incorporate editorial changes, but in the process, scope details were inadvertently deleted. AASB 2015-9 aims to rectify this by inserting the scope paragraphs into AASB 8 and AASB 133 and removing the related text from AASB 1057 Application of Australian Accounting Standards. This change ensures there is no alteration to the requirements or applicability of AASB 8 and AASB 133. The standard applies to annual periods beginning on or after 1 January 2016, with early application permitted. The AASB has determined that no specific consultation was required for these amendments, as they maintain the substance of the previous standards, and a Regulation Impact Statement was not prepared due to the minor nature of the changes.

Scope and Application

Accounting Standard AASB 2015-9 pertains to amendments to Australian Accounting Standards concerning the scope and application paragraphs of AASB 8 Operating Segments and AASB 133 Earnings per Share. This Act applies to entities that prepare and present general-purpose financial statements in accordance with Australian Accounting Standards. The scope of the Act extends to all entities, including public benefit entities, for-profit entities, and not-for-profit entities, that must comply with Australian Accounting Standards. The Standard does not apply to special purpose financial reports prepared in accordance with AASB 1055 Special Purpose Financial Reporting. AASB 2015-9 is applicable across Australia and is not limited to any specific state or territory. The application date for this Standard is for annual periods beginning on or after 1 January 2016, with early application permitted. The amendments made by AASB 2015-9 are of a minor nature and do not affect the requirements or applicability of AASB 8 and AASB 133. The Standard aligns 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, thus ensuring its compatibility with human rights.

Key Provisions

AASB 2015-9, as outlined in the explanatory statement, addresses the inadvertent omission of scope details from AASB 8 Operating Segments and AASB 133 Earnings per Share when these standards were reissued in August 2015. This amendment inserts the missing scope paragraphs back into the relevant standards and removes the related text from AASB 1057 Application of Australian Accounting Standards (section 1). The main requirement of this amendment is to rectify the editorial oversight by restoring the correct scope details to AASB 8 and AASB 133, ensuring these standards remain unchanged in terms of their requirements and applicability (section 3). The entities governed by AASB 2015-9, primarily those preparing financial reports under AASB 8 and AASB 133, are required to ensure their financial statements comply with the scope details provided in these standards. This means that entities must adhere to the specific conditions and criteria set out in the scope paragraphs to determine whether they need to apply the provisions of AASB 8 and AASB 133 to their financial reporting. These standards mandate that entities must report on operating segments and earnings per share in accordance with the scope details specified, which include the types of entities and circumstances under which these standards apply (section 3). There are no specific offences, penalties, or civil or criminal consequences outlined in AASB 2015-9 for non-compliance with the scope details of AASB 8 and AASB 133. However, entities that fail to comply with the scope provisions could potentially face scrutiny and financial reporting issues, as their financial statements may not meet the necessary accounting standards. This could lead to questions about the accuracy and reliability of their financial reporting, which could have broader implications for stakeholders and the entity’s reputation (section 4).

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