AASB Amendments: Transition Reliefs and Not-For-Profits
Two new amending Australian Accounting standards were released by the Australian Accounting Standards Board (AASB) in May 2022:
- AASB 2022-2 Amendments to Australian Accounting Standards - Extending Transition Relief under AASB 1
- AASB 2022-3 Amendments to Australian Accounting Standards - Illustrative Examples for Not-for-Profit Entities accompanying AASB 15
Extending Transition Relief under AASB 1
AASB 1 option exemption extended to include IFRS Standards
Under this standard, it will allow a subsidiary preparing general purpose financial statements for the first time to apply the optional exemption in paragraph D16(a) and measure its assets and liabilities at the carrying amounts that would be included in the parent's consolidated financial statement where the parent has already adopted either Australian Accounting Standards (AAS) or International Financial Reporting Standards (IFRS).
Additionally, an entity that becomes a first-time adopter of AAS in its consolidated financial statements later than its subsidiary (or associate of joint venture) to use the amounts included in the subsidiary's separate financial statements where the subsidiary has already adopted AAS or IFRS.
The purpose of the amendment is to provide clarity to a foreign parent that could have applied IFRS accounting standards, which previously only referred to AAS.
Relief under AASB 1 for entities transitioning to consolidated GPFS
This amendment allows for-profit private sector entities transitioning from unconsolidated Tier 2 - Reduced Disclosure Requirements GPFS to Tier 2 - Simplified Disclosures GPFS to apply AASB 1 when preparing consolidated financial statements for the first time.
AASB 2022-2 applies to annual periods ending on or after 30 June 2022, with earlier application permitted.
AASB 2022-3: Not-For-Profit Entities accompanying AASB 15
For the income of not-for-profit (NFP) entities, AASB 2022-3 adds the proposed improved Illustrative Example 7A to AASB 15. This updated example shows how AASB 15
Revenue from Contracts with Customers relates to the recognition and measurement of up-front fees provided to customers or members by NFP companies.
This amendment was to address comments from stakeholders in the NFP sector following concerns on the implementation of AASB 15
Revenue from Contracts with Customers and AASB 1058
Income of Not-for profit Entities.
AASB 2022-3 is effective for annual reporting periods beginning on or after 1 July 2022, with earlier application permitted.
Should you require any assistance in regarding the above, please contact our Corporate Advisory team.
