Federal Register of Legislation - Australian Government

Primary content

AASB 12 Standards/Accounting & Auditing as made
This Accounting Standard is to require an entity to disclose information that enables users of its financial statements to evaluate the nature of, and risks associated with, its interests in other entities, and the effects of those interests on its financial position, financial performance and cash flows.
Administered by: Treasury
Exempt from sunsetting by the Legislative Instruments Regulations 2004 Sch 3 item 12
Registered 23 Sep 2011
Tabling HistoryDate
Tabled HR11-Oct-2011
Tabled Senate11-Oct-2011
Date of repeal 31 Dec 2015
Repealed by AASB 12 - Disclosure of Interests in Other Entities - August 2015

Explanatory Statement

 

 

Accounting Standard AASB 12
Disclosure of Interests in Other Entities

August2011

 

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EXPLANATORY STATEMENT

Reasons for Issuing AASB 12

The International Accounting Standards Board (IASB) has issued IFRS 12Disclosure of Interests in Other Entitiesfor annual reporting periods beginning on or after 1 January 2013.  The AASB needs to issue AASB 12Disclosure of Interests in Other Entitiesto enable Australian reporting entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity, to continue to satisfy the disclosure objectives of International Financial Reporting Standards.

Main Features of AASB 12

The Standard incorporates the disclosure requirements for entities that have an interest in a subsidiary, a joint arrangement, an associate, or an unconsolidated structured entity.

The Standard focuses on disclosures that would help users better assess the nature and financial effects of an entity’s involvement with other entities, and particularly enhance disclosures about consolidated and unconsolidated structured entities.

Application Date

AASB 12is applicable to annual reporting periods beginning on or after 1 January2013.  This Standard may be applied by for-profit entities, but not by not-for-profit entities, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013.  The AASB will consider promulgating additional guidance for not-for-profit entities by 2013.  If a for-profit entity applies this Standard to such an annual reporting period, it shall disclose that fact and apply AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 127 Separate Financial Statements (August 2011) and AASB 128 Investments in Associates and Joint Ventures (August 2011),at the same time.

Consultation Prior to Issuing this Standard

The AASB issued Exposure Draft ED 157 Joint Arrangementsin October 2007 and Exposure Draft ED 171 Consolidated Financial Statements in December 2008.ED 157 reproduced the proposals included in the IASB’s Exposure Draft ED 9 Joint Arrangements (September 2007) and ED 171 reproduced the proposals included in the IASB’s Exposure Draft ED 10Consolidated Financial Statements (December 2008) without amendment. 

The two Exposure Drafts included the proposed disclosure requirements of an entity with an interest in a joint arrangement and an entity with an interest in a subsidiary respectively.

The AASB received fifteen submissions from Australian constituents on the Exposure Drafts.  Submissions received were generally supportive.

Subsequently, upon identifying an opportunity to integrate and make consistent the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities, the IASB decided to present those requirements in a single disclosure Standard (IFRS 12) incorporating many of the disclosures proposed in the Exposure Drafts.

A Regulation Impact Statement has not been prepared in connection with the issuance of AASB 12 as the amendments made do not have a substantial direct or indirect impact on business or competition.