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AASB 101 Standards/Accounting & Auditing as amended, taking into account amendments up to AASB 2015-2 - Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 - January 2015
Administered by: Treasury
General Comments: The amendments made by AASB 2014-5 are no longer required to apply to annual reporting periods beginning on or after 1 January 2017 but before 1 January 2018, as a consequence of AASB 2015-8 deferring the effective date of AASB 15 (and its consequential amendments in AASB 2014-5) from 1 January 2017 to 1 January 2018.
Registered 27 May 2015
Start Date 28 Jan 2015
Date of repeal 31 Dec 2017
Repealed by AASB 101 - Presentation of Financial Statements - July 2015

Compiled AASB Standard

AASB 101

 

Presentation of Financial Statements

 

This compiled Standard applies to annual reporting periods beginning on or after 1 January 2018.  Early application is permitted for annual reporting periods beginning on or after 24 July 2014 but before 1 January 2018.  It incorporates relevant amendments made up to and including 28 January 2015.

Prepared on 31 March 2015 by the staff of the Australian Accounting Standards Board.

Title: Logo of the A A S B - Description: AASB logo with Australian crest and text identifying the Australian Government and the Australian Accounting Standards Board.


Obtaining Copies of Accounting Standards

Compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB website: www.aasb.gov.au.

Printed copies of original Standards and amending Standards are available for purchase by contacting:

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AUSTRALIA

 

 

 

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COPYRIGHT

© 2015 Commonwealth of Australia

This compiled AASB Standard contains IFRS Foundation copyright material.  Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source.  Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Director of Finance and Administration, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.

All existing rights in this material are reserved outside Australia.

Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.  Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.


CONTENTS

COMPILATION DETAILS

Comparison With IAS 1

Accounting Standard

AASB 101 Presentation of Financial Statements

 

Paragraphs

Objective                                                                                                                                                                                                   1

Application                                                                                                                                                                    Aus1.1 – Aus1.7

Reduced Disclosure Requirements                                                                                                                 Aus1.8 – Aus1.10

Scope                                                                                                                                                                                                  3 – 6

Definitions                                                                                                                                                                                       7 – 8A

Financial Statements

Purpose of Financial Statements                                                                                                                                                  9

Complete Set of Financial Statements                                                                                                                             10 – 14

General Features

Fair Presentation and Compliance with Standards                                                                                                15 – 24

Going Concern                                                                                                                                                               25 – 26

Accrual Basis of Accounting                                                                                                                                      27 – 28

Materiality and Aggregation                                                                                                                                       29 – 31

Offsetting                                                                                                                                                                        32 – 35

Frequency of Reporting                                                                                                                                               36 – 37

Comparative Information

Minimum Comparative Information                                                                                                             38 – 38B

Additional Comparative Information                                                                                                         38C – 38D

Change in Accounting Policy, Retrospective Restatement or Reclassification                                      40A – 44

Consistency of Presentation                                                                                                                                       45 – 46

Structure and Content

Introduction                                                                                                                                                                          47 – 48

Identification of the Financial Statements                                                                                                                      49 – 53

Statement of Financial Position

Information to be Presented in the Statement of Financial Position                                                                  54 – 59

Current/Non-current Distinction                                                                                                                                 60 – 65

Current Assets                                                                                                                                                                66 – 68

Current Liabilities                                                                                                                                                          69 – 76

Information to be Presented either in the Statement of Financial Position or in the Notes                         77 – 80A

Statement of Profit or Loss and Other Comprehensive Income                                                                    81A – 81B

Information to be Presented in the Profit or Loss Section or the Statement of Profit or Loss                                 82

Information to be Presented in the Other Comprehensive Income Section                                                   82A – 87

Profit or Loss for the Period                                                                                                                                        88 – 89

Other Comprehensive Income for the Period                                                                                                          90 – 96

Information to be Presented in the Statement(s) of Profit or Loss and Other Comprehensive Income or in the Notes                                                                                                                                                                                   97 – 105

Statement of Changes in Equity

Information to be Presented in the Statement of Changes in Equity                                                                        106

Information to be Presented in the Statement of Changes in Equity or in the Notes                               106A – 110

Statement of Cash Flows                                                                                                                                                          111

Notes

Structure                                                                                                                                                                     112 – 116

Disclosure of Accounting Policies                                                                                                                          117 – 124

Sources of Estimation Uncertainty                                                                                                                       125 – 133

Capital                                                                                                                                                                        134 – 136

Puttable Financial Instruments Classified as Equity                                                                                                 136A

Other Disclosures                                                                                                                                                      137 – 138

Transition and Effective Date                                                                                                                              Aus139A.1 – 139P

DELETED IAS 1 TEXT                                                                                                                                                             Page 34

BASIS FOR CONCLUSIONS ON IAS 1

(available on the AASB website)

IMPLEMENTATION GUIDANCE ON IAS 1

(available on the AASB website)

TABLE OF CONCORDANCE FOR IAS 1

(available on the AASB website)

Australian Accounting Standard AASB 101 Presentation of Financial Statements (as amended) is set out in paragraphs 1 – 139P.  All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  Terms defined in this Standard are in italics the first time they appear in the Standard.  AASB 101 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation of Standards, which identifies the Australian Accounting Interpretations.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.


compilation details

Accounting Standard AASB 101 Presentation of Financial Statements as amended

This compiled Standard applies to annual reporting periods beginning on or after 1 January 2018.  It takes into account amendments up to and including 28 January 2015 and was prepared on 31 March 2015 by the staff of the Australian Accounting Standards Board (AASB).

This compilation is not a separate Accounting Standard made by the AASB.  Instead, it is a representation of AASB 101 (September 2007) as amended by other Accounting Standards, which are listed in the Table below.

Table of Standards

Standard

Date made

Application date
(annual reporting periods … on or after …)

Application, saving or transitional provisions

AASB 101

24 Sep 2007

(beginning) 1 Jan 2009

see (a) below

AASB 2007-9

13 Dec 2007

(beginning) 1 Jul 2008

see (b) below

AASB 2008-2

5 Mar 2008

(beginning) 1 Jan 2009

see (a) below

AASB 2008-3

6 Mar 2008

(beginning) 1 Jul 2009

see (c) below

AASB 2008-5

24 Jul 2008

(beginning) 1 Jan 2009

see (d) below

AASB 2009-5

21 May 2009

(beginning) 1 Jan 2010

see (e) below

AASB 2009-6

25 Jun 2009

(beginning) 1 Jan 2009
and (ending) 30 Jun 2009

see (f) below

AASB 2009-11

7 Dec 2009

(beginning) 1 Jan 2018

see (g) below

AASB 2010-4

23 Jun 2010

(beginning) 1 Jan 2011

see (h) below

AASB 2010-2

30 Jun 2010

(beginning) 1 Jul 2013

see (i) below

AASB 2010-5

27 Oct 2010

(beginning) 1 Jan 2011

see (h) below

AASB 2010-7

6 Dec 2010

(beginning) 1 Jan 2018

see (j) below

AASB 2011-1

11 May 2011

(beginning) 1 Jul 2011

see (k) below

AASB 2011-2

11 May 2011

(beginning) 1 Jul 2013

see (l) below

AASB 2011-7

29 Aug 2011

(beginning) 1 Jan 2013

see (m) below

AASB 2011-8

2 Sep 2011

(beginning) 1 Jan 2013

see (n) below

AASB 2011-9

5 Sep 2011

(beginning) 1 Jul 2012

see (o) below

AASB 2011-10

5 Sep 2011

(beginning) 1 Jan 2013

see (p) below

AASB 2012-5

29 Jun 2012

(beginning) 1 Jan 2013

see (q) below

AASB 2012-7

10 Sep 2012

(beginning) 1 Jul 2013

see (r) below

AASB 2012-10

18 Dec 2012

(beginning) 1 Jan 2013

see (s) below

AASB 2013-9

20 Dec 2013

Pt A (ending) 20 Dec 2013

Pt B (beginning) 1 Jan 2014

see (t) below

see (u) below

AASB 2014-1

4 Jun 2014

Pt E (beginning) 1 Jan 2018

see (v) below

AASB 2014-5

12 Dec 2014

(beginning) 1 Jan 2017

see (w) below

AASB 2014-6

12 Dec 2014

(beginning) 1 Jan 2016

see (x) below

AASB 2014-7

17 Dec 2014

(beginning) 1 Jan 2018

see (y) below

AASB 2015-2

28 Jan 2015

(beginning) 1 Jan 2016

see (x) below

 

(a)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009.

(b)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2008, provided that the Standards and Interpretation listed in paragraph 6 of AASB 2007-9 are also applied to such periods.

(c)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 30 June 2007 but before 1 July 2009, provided that AASB 3 Business Combinations (March 2008) and AASB 127 Consolidated and Separate Financial Statements (March 2008) are also applied to such periods.

(d)       Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009.

(e)       Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2010.

(f)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 101 Presentation of Financial Statements (September 2007) is also applied to such periods, and to annual reporting periods beginning on or after 1 January 2009 that end before 30 June 2009.

(g)       AASB 2009-11 has been amended by AASB 2010-10 (made 31 December 2010) and AASB 2012-6 (made 10 September 2012).  Part E of AASB 2014-1 (made 4 June 2014) updated the application date of the amendments in this Standard to 1 January 2018.

           Entities may elect to apply the amendments in this Standard to annual reporting periods ending on or after 31 December 2009 that begin before 1 January 2018, provided that AASB 9 (2009) Financial Instruments is also applied to such periods.

(h)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2011.

(i)        Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 July 2009 but before 1 July 2013, provided that AASB 1053 Application of Tiers of Australian Accounting Standards is also applied to such periods.

(j)        AASB 2010-7 has been amended by AASB 2010-10 (made 31 December 2010) and AASB 2012-6 (made 10 September 2012).  Part E of AASB 2014-1 (made 4 June 2014) updated the application date of the amendments in this Standard to 1 January 2018.

           Entities may elect to apply the amendments in this Standard as set out in paragraph 6 of AASB 2010-7.

(k)       Entities may elect to apply this Standard, or its amendments to individual pronouncements, to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2011, provided that AASB 1054 Australian Additional Disclosures is, or its relevant individual disclosure requirements are, also applied to such periods.

(l)        Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 July 2009 but before 1 July 2013, provided that AASB 1053 Application of Tiers of Australian Accounting Standards, AASB 1054 Australian Additional Disclosures and AASB 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project are also applied to such periods.

(m)      AASB 2011-7 has been amended by AASB 2012-6 (made 10 September 2012) and AASB 2012-10 (made 18 December 2012).

           For-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013.  The Standard applies for not-for-profit entities to annual reporting periods beginning on or after 1 January 2014.  Not-for-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2013 but before 1 January 2014.  If an entity elects to apply this Standard to such annual reporting periods, it shall also apply AASB 10 Consolidated Financial Statements and associated Standards to such periods.

(n)       AASB 2011-8 has been amended by AASB 2011-10 (made 5 September 2011) and AASB 2012-6 (made 10 September 2012).

           Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013, provided that AASB 13 Fair Value Measurement is also applied to such periods.

(o)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2012.

(p)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013, provided that AASB 119 Employee Benefits (September 2011) is also applied to such periods.

(q)       Entities may elect to apply this Standard, or its amendments to individual pronouncements, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013.

(r)       Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 July 2009 but before 1 July 2013, provided that AASB 1053 Application of Tiers of Australian Accounting Standards and the other Standards listed in paragraph 5 of this Standard (as relevant) are also applied to such periods.

(s)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013.

(t)        Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 that end before 20 December 2013, provided that AASB CF 2013-1 Amendments to the Australian Conceptual Framework and AASB 1048 Interpretation of Standards (December 2013) are also applied to the such periods.

(u)       Early application of Part B of this Standard is not permitted.

(v)       Entities may elect to apply Part E of this Standard to annual reporting periods ending on or after 31 December 2009 that begin before 1 January 2018, provided that AASB 9 Financial Instruments (2009) or AASB 9 Financial Instruments (2010) is also applied to such periods.

(w)      Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2017, provided that AASB 15 Revenue from Contracts with Customers is also applied to such periods.

(x)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016.

(y)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 24 July 2014 but before 1 January 2018, provided that AASB 9 Financial Instruments (2014) is also applied to such periods.

Table of Amendments

Paragraph affected

How affected

By … [paragraph]

Aus1.4

deleted

AASB 2013-9B [37, 38]

Aus1.5

amended

AASB 2012-10 [44]

Aus1.8 (preceding heading)

added

AASB 2010-2 [20]

Aus1.8

added

amended

amended

amended

amended

AASB 2010-2 [20]

AASB 2011-2 [6]

AASB 2012-7 [10]

AASB 2014-1E [83]

AASB 2015-2 [12]

Aus1.9-Aus1.10

added

AASB 2010-2 [20]

4

amended

AASB 2011-7 [27]

7

amended

amended

amended

amended

amended

amended

amended

amended

amended

AASB 2009-11 [21]

AASB 2010-5 [20]

AASB 2010-7 [7, 22]

AASB 2011-9 [14]

AASB 2011-10 [14]

AASB 2013-9A [23]

AASB 2013-9B [49]

AASB 2014-1E [83]

AASB 2014-7 [35]

Aus7.1

deleted

AASB 2011-1 [10]

Aus7.2

added

AASB 2008-3 [22]

8A

added

AASB 2008-2 [8]

10

amended

amended

amended

AASB 2011-9 [15]

AASB 2012-5 [11]

AASB 2015-2 [13]

10A

added

AASB 2011-9 [15]

12

deleted

AASB 2011-9 [15]

13-14

amended

AASB 2012-10 [45]

15 (preceding heading)

amended

AASB 2012-10 [45]

15

amended

amended

AASB 2012-10 [45]

AASB 2013-9A [24]

RDR15.1

added

AASB 2010-2 [20]

Aus15.1

renumbered as Aus15.3 and amended

deleted

AASB 2010-2 [21]

 

AASB 2011-1 [10]

Aus15.2

renumbered as Aus15.1 and amended

deleted

AASB 2010-2 [22]

 

AASB 2011-1 [10]

Aus15.3

renumbered as Aus15.2 and amended

deleted

AASB 2010-2 [23]

 

AASB 2011-1 [10]

Aus15.4

deleted

AASB 2011-1 [10]

RDR16.1

added

amended

AASB 2010-2 [20]

AASB 2011-2 [7]

Aus16.1

deleted

AASB 2011-1 [10]

Aus16.2

amended

AASB 2007-9 [14]

17

amended

AASB 2011-1 [11]

19

added

AASB 2011-1 [12]

Aus19.1

added

AASB 2011-1 [12]

20-22

added

AASB 2011-1 [12]

28

amended

AASB 2013-9A [25]

30A

added

AASB 2015-2 [13]

31

amended

AASB 2015-2 [13]

33

amended

AASB 2013-9B [49]

34

amended

AASB 2014-5 [26]

38

amended

heading added

AASB 2012-5 [11]

AASB 2012-5 [11]

38A-38B

added

AASB 2012-5 [11]

38C-38D (and preceding heading)

added

AASB 2012-5 [11]

39-40

deleted

AASB 2012-5 [11]

40A-40D (and preceding heading)

added

AASB 2012-5 [11]

41

amended

AASB 2012-5 [11]

47

amended

AASB 2013-9B [49]

Aus50.1

deleted

AASB 2011-1 [10]

54

amended

amended

amended

AASB 2008-3 [8]

AASB 2014-6 [13]

AASB 2015-2 [13]

55

amended

AASB 2015-2 [13]

55A

added

AASB 2015-2 [13]

68

amended

amended

amended

AASB 2008-5 [14]

AASB 2009-11 [21]

AASB 2010-7 [7, 22]

69

amended

AASB 2009-5 [11]

71

amended

amended

AASB 2008-5 [14]

AASB 2010-7 [22]

73

amended

AASB 2009-6 [32]

80A

added

AASB 2008-2 [9]

81 (preceding heading)

amended

AASB 2011-9 [16]

81

deleted

AASB 2011-9 [16]

81A-81B

added

AASB 2011-9 [16]

82 (preceding heading)

amended

AASB 2011-9 [16]

82

amended

amended

amended

amended

AASB 2009-11 [21]

AASB 2010-7 [7, 22]

AASB 2011-9 [16]

AASB 2014-7 [35]

82A (preceding heading)

added

AASB 2011-9 [16]

82A

added

amended

AASB 2011-9 [16]

AASB 2015-2 [13]

83

amended

amended

deleted

AASB 2009-6 [33]

AASB 2008-3 [8]

AASB 2011-9 [16]

84

deleted

AASB 2011-9 [16]

85

amended

amended

AASB 2011-9 [17]

AASB 2015-2 [13]

85A-85B

added

AASB 2015-2 [13]

86-87

amended

AASB 2011-9 [17]

89

amended

AASB 2013-9A [25]

90-91

amended

AASB 2011-9 [17]

93

amended

amended

AASB 2009-11 [21]

AASB 2010-7 [7, 22]

94

amended

AASB 2011-9 [17]

95

amended

amended

amended

AASB 2009-11 [21]

AASB 2010-7 [7, 22]

AASB 2014-1E [83]

96

amended

amended

AASB 2011-10 [15]

AASB 2014-1E [83]

97 (preceding heading)

amended

AASB 2011-9 [17]

100

amended

AASB 2011-9 [17]

106 (preceding heading)

added

AASB 2010-4 [11]

106

amended

amended

amended

AASB 2008-3 [23]

AASB 2010-4 [11]

AASB 2014-1E [83]

106A (and preceding heading)

added

AASB 2010-4 [11]

107

amended

AASB 2010-4 [11]

113-114

amended

amended

AASB 2013-9B [49]

AASB 2015-2 [13]

115

amended

deleted

AASB 2011-9 [17]

AASB 2015-2 [13]

117

amended

AASB 2015-2 [13]

119

amended

amended

AASB 2011-7 [27]

AASB 2015-2 [13]

120

deleted

AASB 2015-2 [13]

122

amended

AASB 2015-2 [13]

123

amended

amended

amended

AASB 2010-7 [22]

AASB 2011-7 [27]

AASB 2014-7 [35]

124

amended

AASB 2011-7 [27]

128

amended

AASB 2011-8 [38]

133

amended

AASB 2011-8 [38]

136A (and preceding heading)

added

AASB 2008-2 [10]

138

amended

AASB 2008-2 [11]

Aus138.1

deleted

AASB 2011-1 [10]

Aus138.2

amended

deleted

AASB 2010-5 [21]

AASB 2011-1 [10]

Aus138.3-Aus138.6

deleted

AASB 2011-1 [10]

139A

note added

AASB 2008-3 [24]

Aus139A.1

added

AASB 2008-3 [25]

139B

note added

AASB 2008-2 [12]

139C

added

AASB 2008-5 [15]

139D

added

AASB 2009-5 [12]

139E

added

deleted

AASB 2009-11 [21]

AASB 2010-7 [7, 22]

139F

added

AASB 2010-4 [11]

139G

added

deleted

AASB 2010-7 [22]

AASB 2014-1E [83]

139H

added

AASB 2011-7 [27]

139I

added

AASB 2011-8 [39]

139J

added

amended

AASB 2011-9 [17]

AASB 2013-9B [50]

139K

added

AASB 2011-10 [15]

139L

added

AASB 2012-5 [11]

139M

added

deleted

AASB 2014-1E [83]

AASB 2014-7 [35]

139N

added

AASB 2014-5 [26]

139O

added

AASB 2014-7 [35]

139P

added

AASB 2015-2 [13]

 

The Australian Implementation Guidance was deleted as a consequence of the deletion of paragraphs Aus138.3-Aus138.5, to which the guidance related.

 


Comparison with IAS 1

AASB 101 and IAS 1

AASB 101 Presentation of Financial Statements as amended incorporates IAS 1 Presentation of Financial Statements as issued and amended by the International Accounting Standards Board (IASB).  Paragraphs that have been added to this Standard (and do not appear in the text of IAS 1) are identified with the prefix “Aus” or “RDR”, followed by the number of the preceding IASB paragraph and decimal numbering.

Compliance with IAS 1

For-profit entities that comply with AASB 101 as amended will simultaneously be in compliance with IAS 1 as amended. 

Not-for-profit entities using the added “Aus” paragraphs in the Standard that specifically apply to not-for-profit entities may not be simultaneously complying with IAS 1.  Whether a not-for-profit entity will be in compliance with IAS 1 will depend on whether the “Aus” paragraphs provide additional guidance for not-for-profit entities or contain requirements that are inconsistent with the corresponding IASB Standard and will be applied by the not-for-profit entity.

Entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements will not be in compliance with IAS 1.


aCCOUNTING STANDARD AASB 101

The Australian Accounting Standards Board made Accounting Standard AASB 101 Presentation of Financial Statements under section 334 of the Corporations Act 2001 on 24 September 2007.

 

This compiled version of AASB 101 applies to annual reporting periods beginning on or after 1 January 2018.  It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 28 January 2015 (see Compilation Details).

 

aCCOUNTING STANDARD AASB 101

Presentation of Financial Statements

Objective

1         This Standard prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities.  It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

Application

Aus1.1          This Standard applies to:

(a)      each entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act;

(b)      general purpose financial statements of each reporting entity; and

(c)       financial statements that are, or are held out to be, general purpose financial statements.

Aus1.2          This Standard applies to annual reporting periods beginning on or after 1 January 2009.
[Note:  For application dates of paragraphs changed or added by an amending Standard, see Compilation Details.]

Aus1.3          This Standard may be applied to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009.  If an entity adopts this Standard for an earlier period, it shall disclose that fact.

Aus1.4          [Deleted by the AASB]

Aus1.5          When applicable, this Standard supersedes AASB 101 Presentation of Financial Statements (October 2006), as amended.

Aus1.6          Notwithstanding paragraph Aus1.1(a), the application of paragraphs 134-136 is limited to each entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is a reporting entity.

Aus1.7          Notwithstanding paragraphs Aus1.1 and Aus1.6, a not‑for‑profit entity need not present the disclosures required by paragraphs 134-136.

Reduced Disclosure Requirements

Aus1.8          The following do not apply to entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements:

(a)      paragraphs 10(f), 15, 16, Aus16.3, 40A-40D, 42(b), 61, 65, 80A, 82(aa), 85B, 90, 92, 94, 104, 131 and 134-138; and

(b)      in paragraph 107, the text “, and the related amount of dividends per share”.

Entities applying Australian Accounting Standards – Reduced Disclosure Requirements may elect to comply with some or all of these excluded requirements.

Aus1.9          The requirements that do not apply to entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements are identified in this Standard by shading of the relevant text.

Aus1.10        RDR paragraphs in this Standard apply only to entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements.

Scope

2         [Deleted by the AASB]

3         Other Australian Accounting Standards set out the recognition, measurement and disclosure requirements for specific transactions and other events.

4         This Standard does not apply to the structure and content of condensed interim financial statements prepared in accordance with AASB 134 Interim Financial Reporting.  However, paragraphs 15-35 apply to such financial statements.  This Standard applies equally to all entities, including those that present consolidated financial statements in accordance with AASB 10 Consolidated Financial Statements and those that present separate financial statements in accordance with AASB 127 Separate Financial Statements.

5         This Standard uses terminology that is suitable for profit-oriented entities, including public sector business entities.  If entities with not-for-profit activities in the private sector or the public sector apply this Standard, they may need to amend the descriptions used for particular line items in the financial statements and for the financial statements themselves.

6         Similarly, entities that do not have equity as defined in AASB 132 Financial Instruments: Presentation (e.g. some mutual funds) and entities whose share capital is not equity (e.g. some co-operative entities) may need to adapt the financial statement presentation of members’ or unitholders’ interests.

Definitions

7         The following terms are used in this Standard with the meanings specified:

General purpose financial statements (referred to as ‘financial statements’) are those intended to meet the needs of users who are not in a position to require an entity to prepare reports tailored to their particular information needs.

Impracticable – Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so.

International Financial Reporting Standards (IFRSs) are Standards and Interpretations issued by the International Accounting Standards Board (IASB).  They comprise:

(a)      International Financial Reporting Standards;

(b)      International Accounting Standards;

(c)       IFRIC Interpretations; and

(d)      SIC Interpretations.[1]

Material – Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements.  Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances.  The size or nature of the item, or a combination of both, could be the determining factor.

Assessing whether an omission or misstatement could influence economic decisions of users, and so be material, requires consideration of the characteristics of those users.  The Framework for the Preparation and Presentation of Financial Statements states in paragraph 25[2] that ‘users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence’.  Therefore, the assessment needs to take into account how users with such attributes could reasonably be expected to be influenced in making economic decisions.

Notes contain information in addition to that presented in the statement of financial position, statement(s) of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows.  Notes provide narrative descriptions or disaggregations of items presented in those statements and information about items that do not qualify for recognition in those statements.

Other comprehensive income comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other Australian Accounting Standards.

The components of other comprehensive income include:

(a)   changes in revaluation surplus (see AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets);

(b)   remeasurements of defined benefit plans (see AASB 119 Employee Benefits);

(c)   gains and losses arising from translating the financial statements of a foreign operation (see AASB 121 The Effects of Changes in Foreign Exchange Rates);

(d)   gains and losses from investments in equity instruments designated at fair value through other comprehensive income in accordance with paragraph 5.7.5 of AASB 9 Financial Instruments;

(da)                        gains and losses on financial assets measured at fair value through other comprehensive income in accordance with paragraph 4.1.2A of AASB 9;

(e)   the effective portion of gains and losses on hedging instruments in a cash flow hedge and the gains and losses on hedging instruments that hedge investments in equity instruments measured at fair value through other comprehensive income in accordance with paragraph 5.7.5 of AASB 9 (see Chapter 6 of AASB 9);

(f)   for particular liabilities designated as at fair value through profit or loss, the amount of the change in fair value that is attributable to changes in the liability’s credit risk (see paragraph 5.7.7 of AASB 9);

(g)   changes in the value of the time value of options when separating the intrinsic value and time value of an option contract and designating as the hedging instrument only the changes in the intrinsic value (see Chapter 6 of AASB 9);

(h)   changes in the value of the forward elements of forward contracts when separating the forward element and spot element of a forward contract and designating as the hedging instrument only the changes in the spot element, and changes in the value of the foreign currency basis spread of a financial instrument when excluding it from the designation of that financial instrument as the hedging instrument (see Chapter 6 of AASB 9);

Owners are holders of instruments classified as equity.

Profit or loss is the total of income less expenses, excluding the components of other comprehensive income.

Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other comprehensive income in the current or previous periods.

Total comprehensive income is the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners.

Total comprehensive income comprises all components of ‘profit or loss’ and of ‘other comprehensive income’.

Aus7.1          [Deleted by the AASB]

Aus7.2          In respect of public sector entities, local governments, governments and most, if not all, government departments are reporting entities:

reporting entity means an entity in respect of which it is reasonable to expect the existence of users who rely on the entity’s general purpose financial statement for information that will be useful to them for making and evaluating decisions about the allocation of resources.  A reporting entity can be a single entity or a group comprising a parent and all of its subsidiaries.

government means the Australian Government, the Government of the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, South Australia, Tasmania, Victoria or Western Australia.

government department means a government controlled entity, created pursuant to administrative arrangements or otherwise designated as a government department by the government which controls it.

local government means an entity comprising all entities controlled by a governing body elected or appointed pursuant to a Local Government Act or similar legislation.

8         Although this Standard uses the terms ‘other comprehensive income’, ‘profit or loss’ and ‘total comprehensive income’, an entity may use other terms to describe the totals as long as the meaning is clear.  For example, an entity may use the term ‘net income’ to describe profit or loss.

8A      The following terms are described in AASB 132 and are used in this Standard with the meaning specified in AASB 132:

(a)      puttable financial instrument classified as an equity instrument (described in paragraphs 16A and 16B of AASB 132); and

(b)      an instrument that imposes on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation and is classified as an equity instrument (described in paragraphs 16C and 16D of AASB 132).

Financial Statements

Purpose of Financial Statements

9         Financial statements are a structured representation of the financial position and financial performance of an entity.  The objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions.  Financial statements also show the results of the management’s stewardship of the resources entrusted to it.  To meet this objective, financial statements provide information about an entity’s:

(a)      assets;

(b)      liabilities;

(c)       equity;

(d)      income and expenses, including gains and losses;

(e)       contributions by and distributions to owners in their capacity as owners; and

(f)       cash flows.

This information, along with other information in the notes, assists users of financial statements in predicting the entity’s future cash flows and, in particular, their timing and certainty.

Complete Set of Financial Statements

10       A complete set of financial statements comprises:

(a)      a statement of financial position as at the end of the period;

(b)      a statement of profit or loss and other comprehensive income for the period;

(c)       a statement of changes in equity for the period;

(d)      a statement of cash flows for the period;

(e)       notes, comprising significant accounting policies and other explanatory information;

(ea)    comparative information in respect of the preceding period as specified in paragraphs 38 and 38A; and

(f)       a statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements in accordance with paragraphs 40A-40D.

An entity may use titles for the statements other than those used in this Standard.  For example, an entity may use the title ‘statement of comprehensive income’ instead of ‘statement of profit or loss and other comprehensive income’.

10A    An entity may present a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections.  The sections shall be presented together, with the profit or loss section presented first followed directly by the other comprehensive income section.  An entity may present the profit or loss section in a separate statement of profit or loss.  If so, the separate statement of profit or loss shall immediately precede the statement presenting comprehensive income, which shall begin with profit or loss.

11       An entity shall present with equal prominence all of the financial statements in a complete set of financial statements.

12       [Deleted by the IASB]

13       Many entities present, outside the financial statements, a financial review by management that describes and explains the main features of the entity’s financial performance and financial position, and the principal uncertainties it faces.  Such a report may include a review of:

(a)      the main factors and influences determining financial performance, including changes in the environment in which the entity operates, the entity’s response to those changes and their effect, and the entity’s policy for investment to maintain and enhance financial performance, including its dividend policy;

(b)      the entity’s sources of funding and its targeted ratio of liabilities to equity; and

(c)       the entity’s resources not recognised in the statement of financial position in accordance with Australian Accounting Standards.

14       Many entities also present, outside the financial statements, reports and statements such as environmental reports and value added statements, particularly in industries in which environmental factors are significant and when employees are regarded as an important user group.  Reports and statements presented outside financial statements are outside the scope of Australian Accounting Standards.

General Features

Fair Presentation and Compliance with Standards

15       Financial statements shall present fairly the financial position, financial performance and cash flows of an entity.  Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the Framework[3].  The application of Australian Accounting Standards, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation.

RDR15.1      Financial statements shall present fairly the financial position, financial performance and cash flows of an entity applying Australian Accounting Standards – Reduced Disclosure Requirements.  Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the Framework.  The application of Australian Accounting Standards – Reduced Disclosure Requirements, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation.

16       An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes.  An entity shall not describe financial statements as complying with IFRSs unless they comply with all the requirements of IFRSs.

RDR16.1      Entities applying Australian Accounting Standards – Reduced Disclosure Requirements would not be able to state compliance with IFRSs.

Aus16.1        [Deleted by the AASB]

Aus16.2        Compliance with Australian Accounting Standards by for-profit entities will not necessarily lead to compliance with IFRSs.  This circumstance arises when the entity is a for-profit government department to which particular Standards apply, such as AASB 1004 Contributions, and to which Aus paragraphs in various other Australian Accounting Standards apply, and the entity applies a requirement that is inconsistent with an IFRS requirement.

Aus16.3        Not-for-profit entities need not comply with the paragraph 16 requirement to make an explicit and unreserved statement of compliance with IFRSs.

17       In virtually all circumstances, an entity achieves a fair presentation by compliance with Australian Accounting Standards.  A fair presentation also requires an entity:

(a)      to select and apply accounting policies in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.  AASB 108 sets out a hierarchy of authoritative guidance that management considers in the absence of an Australian Accounting Standard that specifically applies to an item;

(b)      to present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and

(c)       to provide additional disclosures when compliance with the specific requirements in Australian Accounting Standards is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.

18       An entity cannot rectify inappropriate accounting policies either by disclosure of the accounting policies used or by notes or explanatory material.

19       In the extremely rare circumstances in which management concludes that compliance with a requirement in an Australian Accounting Standard would be so misleading that it would conflict with the objective of financial statements set out in the Framework, the entity shall depart from that requirement in the manner set out in paragraph 20 if the relevant regulatory framework requires, or otherwise does not prohibit, such a departure.

Aus19.1        In relation to paragraph 19, the following shall not depart from a requirement in an Australian Accounting Standard:

(a)      entities required to prepare financial reports under Part 2M.3 of the Corporations Act;

(b)      private and public sector not-for-profit entities; and

(c)       entities applying Australian Accounting Standards – Reduced Disclosure Requirements.

20       When an entity departs from a requirement of an Australian Accounting Standard in accordance with paragraph 19, it shall disclose:

(a)      that management has concluded that the financial statements present fairly the entity’s financial position, financial performance and cash flows;

(b)      that it has complied with Australian Accounting Standards, except that it has departed from a particular requirement to achieve a fair presentation;

(c)       the title of the Australian Accounting Standard from which the entity has departed, the nature of the departure, including the treatment that the Australian Accounting Standard would require, the reason why that treatment would be so misleading in the circumstances that it would conflict with the objective of financial statements set out in the Framework, and the treatment adopted; and

(d)      for each period presented, the financial effect of the departure on each item in the financial statements that would have been reported in complying with the requirement.

21       When an entity has departed from a requirement of an Australian Accounting Standard in a prior period, and that departure affects the amounts recognised in the financial statements for the current period, it shall make the disclosures set out in paragraph 20(c) and (d).

22       Paragraph 21 applies, for example, when an entity departed in a prior period from a requirement in an Australian Accounting Standard for the measurement of assets or liabilities and that departure affects the measurement of changes in assets and liabilities recognised in the current period’s financial statements.

23       In the extremely rare circumstances in which management concludes that compliance with a requirement in an Australian Accounting Standard would be so misleading that it would conflict with the objective of financial statements set out in the Framework, but the relevant regulatory framework prohibits departure from the requirement, the entity shall, to the maximum extent possible, reduce the perceived misleading aspects of compliance by disclosing:

(a)      the title of the Australian Accounting Standard in question, the nature of the requirement, and the reason why management has concluded that complying with that requirement is so misleading in the circumstances that it conflicts with the objective of financial statements set out in the Framework; and

(b)      for each period presented, the adjustments to each item in the financial statements that management has concluded would be necessary to achieve a fair presentation.

24       For the purpose of paragraphs 19-23, an item of information would conflict with the objective of financial statements when it does not represent faithfully the transactions, other events and conditions that it either purports to represent or could reasonably be expected to represent and, consequently, it would be likely to influence economic decisions made by users of financial statements.  When assessing whether complying with a specific requirement in an Australian Accounting Standard would be so misleading that it would conflict with the objective of financial statements set out in the Framework, management considers:

(a)      why the objective of financial statements is not achieved in the particular circumstances; and

(b)      how the entity’s circumstances differ from those of other entities that comply with the requirement.  If other entities in similar circumstances comply with the requirement, there is a rebuttable presumption that the entity’s compliance with the requirement would not be so misleading that it would conflict with the objective of financial statements set out in the Framework.

Going Concern

25       When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern.  An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so.  When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, the entity shall disclose those uncertainties.  When an entity does not prepare financial statements on a going concern basis, it shall disclose that fact, together with the basis on which it prepared the financial statements and the reason why the entity is not regarded as a going concern.

26       In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period.  The degree of consideration depends on the facts in each case.  When an entity has a history of profitable operations and ready access to financial resources, the entity may reach a conclusion that the going concern basis of accounting is appropriate without detailed analysis.  In other cases, management may need to consider a wide range of factors relating to current and expected profitability, debt repayment schedules and potential sources of replacement financing before it can satisfy itself that the going concern basis is appropriate.

Accrual Basis of Accounting

27       An entity shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting.

28       When the accrual basis of accounting is used, an entity recognises items as assets, liabilities, equity, income and expenses (the elements of financial statements) when they satisfy the definitions and recognition criteria for those elements in the Framework[4].

Materiality and Aggregation

29       An entity shall present separately each material class of similar items.  An entity shall present separately items of a dissimilar nature or function unless they are immaterial.

30       Financial statements result from processing large numbers of transactions or other events that are aggregated into classes according to their nature or function.  The final stage in the process of aggregation and classification is the presentation of condensed and classified data, which form line items in the financial statements.  If a line item is not individually material, it is aggregated with other items either in those statements or in the notes.  An item that is not sufficiently material to warrant separate presentation in those statements may warrant separate presentation in the notes.

30A    When applying this and other Australian Accounting Standards an entity shall decide, taking into consideration all relevant facts and circumstances, how it aggregates information in the financial statements, which include the notes.  An entity shall not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures or functions.

31       Some Australian Accounting Standards specify information that is required to be included in the financial statements, which include the notes.  An entity need not provide a specific disclosure required by an Australian Accounting Standard if the information resulting from that disclosure is not material.  This is the case even if the Australian Accounting Standard contains a list of specific requirements or describes them as minimum requirements.  An entity shall also consider whether to provide additional disclosures when compliance with the specific requirements in Australian Accounting Standards is insufficient to enable users of financial statements to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.

Offsetting

32       An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an Australian Accounting Standard.

33       An entity reports separately both assets and liabilities, and income and expenses.  Offsetting in the statement(s) of profit or loss and other comprehensive income or financial position, except when offsetting reflects the substance of the transaction or other event, detracts from the ability of users both to understand the transactions, other events and conditions that have occurred and to assess the entity’s future cash flows.  Measuring assets net of valuation allowances — for example, obsolescence allowances on inventories and doubtful debts allowances on receivables — is not offsetting.

34       AASB 15 Revenue from Contracts with Customers requires an entity to measure revenue from contracts with customers at the amount of consideration to which the entity expects to be entitled in exchange for transferring promised goods or services.  For example, the amount of revenue recognised reflects any trade discounts and volume rebates the entity allows.  An entity undertakes, in the course of its ordinary activities, other transactions that do not generate revenue but are incidental to the main revenue-generating activities.  An entity presents the results of such transactions, when this presentation reflects the substance of the transaction or other event, by netting any income with related expenses arising on the same transaction.  For example:

(a)      an entity presents gains and losses on the disposal of non-current assets, including investments and operating assets, by deducting from the amount of consideration on disposal the carrying amount of the asset and related selling expenses; and

(b)      an entity may net expenditure related to a provision that is recognised in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and reimbursed under a contractual arrangement with a third party (for example, a supplier’s warranty agreement) against the related reimbursement.

35       In addition, an entity presents on a net basis gains and losses arising from a group of similar transactions, for example, foreign exchange gains and losses or gains and losses arising on financial instruments held for trading.  However, an entity presents such gains and losses separately if they are material.

Frequency of Reporting

36       An entity shall present a complete set of financial statements (including comparative information) at least annually.  When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall disclose, in addition to the period covered by the financial statements:

(a)      the reason for using a longer or shorter period; and

(b)      the fact that amounts presented in the financial statements are not entirely comparable.

37       Normally, an entity consistently prepares financial statements for a one-year period.  However, for practical reasons, some entities prefer to report, for example, for a 52-week period.  This Standard does not preclude this practice.

Comparative Information

Minimum Comparative Information

38       Except when Australian Accounting Standards permit or require otherwise, an entity shall present comparative information in respect of the preceding period for all amounts reported in the current period’s financial statements.  An entity shall include comparative information for narrative and descriptive information if it is relevant to understanding the current period’s financial statements.

38A    An entity shall present, as a minimum, two statements of financial position, two statements of profit or loss and other comprehensive income, two separate statements of profit or loss (if presented), two statements of cash flows and two statements of changes in equity, and related notes.

38B    In some cases, narrative information provided in the financial statements for the preceding period(s) continues to be relevant in the current period.  For example, an entity discloses in the current period details of a legal dispute, the outcome of which was uncertain at the end of the preceding period and is yet to be resolved.  Users may benefit from the disclosure of information that the uncertainty existed at the end of the preceding period and from the disclosure of information about the steps that have been taken during the period to resolve the uncertainty.

Additional Comparative Information

38C    An entity may present comparative information in addition to the minimum comparative financial statements required by Australian Accounting Standards, as long as that information is prepared in accordance with Australian Accounting Standards.  This comparative information may consist of one or more statements referred to in paragraph 10, but need not comprise a complete set of financial statements.  When this is the case, the entity shall present related note information for those additional statements.

38D    For example, an entity may present a third statement of profit or loss and other comprehensive income (thereby presenting the current period, the preceding period and one additional comparative period).  However, the entity is not required to present a third statement of financial position, a third statement of cash flows or a third statement of changes in equity (ie an additional financial statement comparative).  The entity is required to present, in the notes to the financial statements, the comparative information related to that additional statement of profit or loss and other comprehensive income.

39       [Deleted by the IASB]

40       [Deleted by the IASB]

Change in Accounting Policy, Retrospective Restatement or Reclassification

40A    An entity shall present a third statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements required in paragraph 38A if:

           (a)      it applies an accounting policy retrospectively, makes a retrospective restatement of items in its financial statements or reclassifies items in its financial statements; and

           (b)      the retrospective application, retrospective restatement or the reclassification has a material effect on the information in the statement of financial position at the beginning of the preceding period.

40B    In the circumstances described in paragraph 40A, an entity shall present three statements of financial position as at:

           (a)      the end of the current period;

           (b)      the end of the preceding period; and

           (c)       the beginning of the preceding period.

40C    When an entity is required to present an additional statement of financial position in accordance with paragraph 40A, it must disclose the information required by paragraphs 41-44 and AASB 108.  However, it need not present the related notes to the opening statement of financial position as at the beginning of the preceding period.

40D    The date of that opening statement of financial position shall be as at the beginning of the preceding period regardless of whether an entity’s financial statements present comparative information for earlier periods (as permitted in paragraph 38C).

41       If an entity changes the presentation or classification of items in its financial statements, it shall reclassify comparative amounts unless reclassification is impracticable.  When an entity reclassifies comparative amounts, it shall disclose (including as at the beginning of the preceding period):

(a)      the nature of the reclassification;

(b)      the amount of each item or class of items that is reclassified; and

(c)       the reason for the reclassification.

42       When it is impracticable to reclassify comparative amounts, an entity shall disclose:

(a)      the reason for not reclassifying the amounts; and

(b)      the nature of the adjustments that would have been made if the amounts had been reclassified.

43       Enhancing the inter-period comparability of information assists users in making economic decisions, especially by allowing the assessment of trends in financial information for predictive purposes.  In some circumstances, it is impracticable to reclassify comparative information for a particular prior period to achieve comparability with the current period.  For example, an entity may not have collected data in the prior period(s) in a way that allows reclassification, and it may be impracticable to recreate the information.

44       AASB 108 sets out the adjustments to comparative information required when an entity changes an accounting policy or corrects an error.

Consistency of Presentation

45       An entity shall retain the presentation and classification of items in the financial statements from one period to the next unless:

(a)      it is apparent, following a significant change in the nature of the entity’s operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in AASB 108; or

(b)      an Australian Accounting Standard requires a change in presentation.

46       For example, a significant acquisition or disposal, or a review of the presentation of the financial statements, might suggest that the financial statements need to be presented differently.  An entity changes the presentation of its financial statements only if the changed presentation provides information that is reliable and more relevant to users of the financial statements and the revised structure is likely to continue, so that comparability is not impaired.  When making such changes in presentation, an entity reclassifies its comparative information in accordance with paragraphs 41 and 42.

Structure and Content

Introduction

47       This Standard requires particular disclosures in the statement of financial position or the statement(s) of profit or loss and other comprehensive income, or in the statement of changes in equity and requires disclosure of other line items either in those statements or in the notes.  AASB 107 Statement of Cash Flows sets out requirements for the presentation of cash flow information.

48       This Standard sometimes uses the term ‘disclosure’ in a broad sense, encompassing items presented in the financial statements.  Disclosures are also required by other Australian Accounting Standards.  Unless specified to the contrary elsewhere in this Standard or in another Australian Accounting Standard, such disclosures may be made in the financial statements.

Identification of the Financial Statements

49       An entity shall clearly identify the financial statements and distinguish them from other information in the same published document.

50       Australian Accounting Standards apply only to financial statements, and not necessarily to other information presented in an annual report, a regulatory filing, or another document.  Therefore, it is important that users can distinguish information that is prepared using Australian Accounting Standards from other information that may be useful to users but is not the subject of those requirements.

51       An entity shall clearly identify each financial statement and the notes.  In addition, an entity shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:

(a)      the name of the reporting entity or other means of identification, and any change in that information from the end of the preceding reporting period;

(b)      whether the financial statements are of the individual entity or a group of entities;

(c)       the date of the end of the reporting period or the period covered by the set of financial statements or notes;

(d)      the presentation currency, as defined in AASB 121; and

(e)       the level of rounding used in presenting amounts in the financial statements.

52       An entity meets the requirements in paragraph 51 by presenting appropriate headings for pages, statements, notes, columns and the like.  Judgement is required in determining the best way of presenting such information.  For example, when an entity presents the financial statements electronically, separate pages are not always used; an entity then presents the above items to ensure that the information included in the financial statements can be understood.

53       An entity often makes financial statements more understandable by presenting information in thousands or millions of units of the presentation currency.  This is acceptable as long as the entity discloses the level of rounding and does not omit material information.

Statement of Financial Position

Information to be Presented in the Statement of Financial Position

54       The statement of financial position shall include line items that present the following amounts:

(a)      property, plant and equipment;

(b)      investment property;

(c)       intangible assets;

(d)      financial assets (excluding amounts shown under (e), (h) and (i));

(e)       investments accounted for using the equity method;

(f)       biological assets within the scope of AASB 141 Agriculture;

(g)      inventories;

(h)      trade and other receivables;

(i)       cash and cash equivalents;

(j)       the total of assets classified as held for sale and assets included in disposal groups classified as held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations;

(k)      trade and other payables;

(l)       provisions;

(m)     financial liabilities (excluding amounts shown under (k) and (l));

(n)      liabilities and assets for current tax, as defined in AASB 112 Income Taxes;

(o)      deferred tax liabilities and deferred tax assets, as defined in AASB 112;

(p)      liabilities included in disposal groups classified as held for sale in accordance with AASB 5;

(q)      non-controlling interests, presented within equity; and

(r)       issued capital and reserves attributable to owners of the parent.

55       An entity shall present additional line items (including by disaggregating the line items listed in paragraph 54), headings and subtotals in the statement of financial position when such presentation is relevant to an understanding of the entity’s financial position.

55A    When an entity presents subtotals in accordance with paragraph 55, those subtotals shall:

(a)      be comprised of line items made up of amounts recognised and measured in accordance with Australian Accounting Standards;

(b)      be presented and labelled in a manner that makes the line items that constitute the subtotal clear and understandable;

(c)       be consistent from period to period, in accordance with paragraph 45; and

(d)      not be displayed with more prominence than the subtotals and totals required in Australian Accounting Standards for the statement of financial position.

56       When an entity presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, it shall not classify deferred tax assets (liabilities) as current assets (liabilities).

57       This Standard does not prescribe the order or format in which an entity presents items.  Paragraph 54 simply lists items that are sufficiently different in nature or function to warrant separate presentation in the statement of financial position.  In addition:

(a)      line items are included when the size, nature or function of an item or aggregation of similar items is such that separate presentation is relevant to an understanding of the entity’s financial position; and

(b)      the descriptions used and the ordering of items or aggregation of similar items may be amended according to the nature of the entity and its transactions, to provide information that is relevant to an understanding of the entity’s financial position.  For example, a financial institution may amend the above descriptions to provide information that is relevant to the operations of a financial institution.

58       An entity makes the judgement about whether to present additional items separately on the basis of an assessment of:

(a)      the nature and liquidity of assets;

(b)      the function of assets within the entity; and

(c)       the amounts, nature and timing of liabilities.

59       The use of different measurement bases for different classes of assets suggests that their nature or function differs and, therefore, that an entity presents them as separate line items.  For example, different classes of property, plant and equipment can be carried at cost or at revalued amounts in accordance with AASB 116.

Current/Non-current Distinction

60       An entity shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position in accordance with
paragraphs 66-76 except when a presentation based on liquidity provides information that is reliable and more relevant.  When that exception applies, an entity shall present all assets and liabilities in order of liquidity.

61       Whichever method of presentation is adopted, an entity shall disclose the amount expected to be recovered or settled after more than twelve months for each asset and liability line item that combines amounts expected to be recovered or settled:

           (a)      no more than twelve months after the reporting period, and

           (b)      more than twelve months after the reporting period.

62       When an entity supplies goods or services within a clearly identifiable operating cycle, separate classification of current and non-current assets and liabilities in the statement of financial position provides useful information by distinguishing the net assets that are continuously circulating as working capital from those used in the entity’s long-term operations.  It also highlights assets that are expected to be realised within the current operating cycle, and liabilities that are due for settlement within the same period.

63       For some entities, such as financial institutions, a presentation of assets and liabilities in increasing or decreasing order of liquidity provides information that is reliable and more relevant than a current/non-current presentation because the entity does not supply goods or services within a clearly identifiable operating cycle.

64       In applying paragraph 60, an entity is permitted to present some of its assets and liabilities using a current/non-current classification and others in order of liquidity when this provides information that is reliable and more relevant.  The need for a mixed basis of presentation might arise when an entity has diverse operations.

65       Information about expected dates of realisation of assets and liabilities is useful in assessing the liquidity and solvency of an entity.  AASB 7 Financial Instruments: Disclosures requires disclosure of the maturity dates of financial assets and financial liabilities.  Financial assets include trade and other receivables, and financial liabilities include trade and other payables.  Information on the expected date of recovery of non-monetary assets such as inventories and expected date of settlement for liabilities such as provisions is also useful, whether assets and liabilities are classified as current or as non-current.  For example, an entity discloses the amount of inventories that are expected to be recovered more than twelve months after the reporting period.

Current Assets

66       An entity shall classify an asset as current when:

(a)      it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b)      it holds the asset primarily for the purpose of trading;

(c)       it expects to realise the asset within twelve months after the reporting period; or

(d)      the asset is cash or a cash equivalent (as defined in AASB 107) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

An entity shall classify all other assets as non-current.

67       This Standard uses the term ‘non-current’ to include tangible, intangible and financial assets of a long-term nature.  It does not prohibit the use of alternative descriptions as long as the meaning is clear.

68       The operating cycle of an entity is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.  When the entity’s normal operating cycle is not clearly identifiable, it is assumed to be twelve months.  Current assets include assets (such as inventories and trade receivables) that are sold, consumed or realised as part of the normal operating cycle even when they are not expected to be realised within twelve months after the reporting period.  Current assets also include assets held primarily for the purpose of trading (examples include some financial assets that meet the definition of held for trading in AASB 9) and the current portion of non-current financial assets.

Current Liabilities

69       An entity shall classify a liability as current when:

(a)      it expects to settle the liability in its normal operating cycle;

(b)      it holds the liability primarily for the purpose of trading;

(c)       the liability is due to be settled within twelve months after the reporting period; or

(d)      it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period (see paragraph 73).  Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

An entity shall classify all other liabilities as non-current.

70       Some current liabilities, such as trade payables and some accruals for employee and other operating costs, are part of the working capital used in the entity’s normal operating cycle.  An entity classifies such operating items as current liabilities even if they are due to be settled more than twelve months after the reporting period.  The same normal operating cycle applies to the classification of an entity’s assets and liabilities.  When the entity’s normal operating cycle is not clearly identifiable, it is assumed to be twelve months.

71       Other current liabilities are not settled as part of the normal operating cycle, but are due for settlement within twelve months after the reporting period or held primarily for the purpose of trading.  Examples are some financial liabilities that meet the definition of held for trading in AASB 9, bank overdrafts, and the current portion of non-current financial liabilities, dividends payable, income taxes and other non-trade payables.  Financial liabilities that provide financing on a long-term basis (ie are not part of the working capital used in the entity’s normal operating cycle) and are not due for settlement within twelve months after the reporting period are non-current liabilities, subject to paragraphs 74 and 75.

72       An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the reporting period, even if:

(a)      the original term was for a period longer than twelve months; and

(b)      an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorised for issue.

73       If an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility, it classifies the obligation as non-current, even if it would otherwise be due within a shorter period.  However, when refinancing or rolling over the obligation is not at the discretion of the entity (for example, there is no arrangement for refinancing), the entity does not consider the potential to refinance the obligation and classifies the obligation as current.

74       When an entity breaches a provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand, it classifies the liability as current, even if the lender agreed, after the reporting period and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach.  An entity classifies the liability as current because, at the end of the reporting period, it does not have an unconditional right to defer its settlement for at least twelve months after that date.

75       However, an entity classifies the liability as non-current if the lender agreed by the end of the reporting period to provide a period of grace ending at least twelve months after the reporting period, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment.

76       In respect of loans classified as current liabilities, if the following events occur between the end of the reporting period and the date the financial statements are authorised for issue, those events are disclosed as non-adjusting events in accordance with AASB 110 Events after the Reporting Period:

(a)      refinancing on a long-term basis;

(b)      rectification of a breach of a long-term loan arrangement; and

(c)       the granting by the lender of a period of grace to rectify a breach of a long-term loan arrangement ending at least twelve months after the reporting period.

Information to be Presented either in the Statement of Financial Position or in the Notes

77       An entity shall disclose, either in the statement of financial position or in the notes, further subclassifications of the line items presented, classified in a manner appropriate to the entity’s operations.

78       The detail provided in subclassifications depends on the requirements of Australian Accounting Standards and on the size, nature and function of the amounts involved.  An entity also uses the factors set out in paragraph 58 to decide the basis of subclassification.  The disclosures vary for each item, for example:

(a)      items of property, plant and equipment are disaggregated into classes in accordance with AASB 116;

(b)      receivables are disaggregated into amounts receivable from trade customers, receivables from related parties, prepayments and other amounts;

(c)       inventories are disaggregated, in accordance with AASB 102 Inventories, into classifications such as merchandise, production supplies, materials, work in progress and finished goods;

(d)      provisions are disaggregated into provisions for employee benefits and other items; and

(e)       equity capital and reserves are disaggregated into various classes, such as paid-in capital, share premium and reserves.

79       An entity shall disclose the following, either in the statement of financial position or the statement of changes in equity, or in the notes:

(a)      for each class of share capital:

(i)       the number of shares authorised;

(ii)      the number of shares issued and fully paid, and issued but not fully paid;

(iii)     par value per share, or that the shares have no par value;

(iv)     a reconciliation of the number of shares outstanding at the beginning and at the end of the period;

(v)      the rights, preferences and restrictions attaching to that class including restrictions on the distribution of dividends and the repayment of capital;

(vi)     shares in the entity held by the entity or by its subsidiaries or associates; and

(vii)    shares reserved for issue under options and contracts for the sale of shares, including terms and amounts; and

(b)      a description of the nature and purpose of each reserve within equity.

80       An entity without share capital, such as a partnership or trust, shall disclose information equivalent to that required by paragraph 79(a), showing changes during the period in each category of equity interest, and the rights, preferences and restrictions attaching to each category of equity interest.

80A    If an entity has reclassified:

           (a)      a puttable financial instrument classified as an equity instrument; or

           (b)      an instrument that imposes on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation and is classified as an equity instrument;

           between financial liabilities and equity, it shall disclose the amount reclassified into and out of each category (financial liabilities or equity), and the timing and reason for that reclassification.

Statement of Profit or Loss and Other Comprehensive Income

81       [Deleted by the IASB]

81A    The statement of profit or loss and other comprehensive income (statement of comprehensive income) shall present, in addition to the profit or loss and other comprehensive income sections:

(a)      profit or loss;

(b)      total other comprehensive income;

(c)       comprehensive income for the period, being the total of profit or loss and other comprehensive income.

If an entity presents a separate statement of profit or loss it does not present the profit or loss section in the statement presenting comprehensive income.

81B    An entity shall present the following items, in addition to the profit or loss and other comprehensive income sections, as allocation of profit or loss and other comprehensive income for the period:

(a)      profit or loss for the period attributable to:

(i)       non-controlling interests, and

(ii)      owners of the parent.

(b)      comprehensive income for the period attributable to:

(i)       non-controlling interests, and

(ii)      owners of the parent.

If an entity presents profit or loss in a separate statement it shall present (a) in that statement.

Information to be Presented in the Profit or Loss Section or the Statement of Profit or Loss

82       In addition to items required by other Australian Accounting Standards, the profit or loss section or the statement of profit or loss shall include line items that present the following amounts for the period:

(a)      revenue, presenting separately interest revenue calculated using the effective interest method;

(aa)    gains and losses arising from the derecognition of financial assets measured at amortised cost;

(b)      finance costs;

(ba)    impairment losses (including reversals of impairment losses or impairment gains) determined in accordance with Section 5.5 of AASB 9;

(c)       share of the profit or loss of associates and joint ventures accounted for using the equity method;

(ca)    if a financial asset is reclassified out of the amortised cost measurement category so that it is measured at fair value through profit or loss, any gain or loss arising from a difference between the previous amortised cost of the financial asset and its fair value at the reclassification date (as defined in AASB 9);

(cb)    if a financial asset is reclassified out of the fair value through other comprehensive income measurement category so that it is measured at fair value through profit or loss, any cumulative gain or loss previously recognised in other comprehensive income that is reclassified to profit or loss;

(d)      tax expense;

(e)       [deleted by the IASB]

(ea)    a single amount for the total of discontinued operations (see AASB 5).

(f)-(i)  [deleted by the IASB]

Information to be Presented in the Other Comprehensive Income Section

82A    The other comprehensive income section shall present line items for the amounts for the period of:

(a)      items of other comprehensive income (excluding amounts in paragraph (b)), classified by nature and grouped into those that, in accordance with other Australian Accounting Standards:

(i)       will not be reclassified subsequently to profit or loss; and

(ii)      will be reclassified subsequently to profit or loss when specific conditions are met.

(b)      the share of the other comprehensive income of associates and joint ventures accounted for using the equity method, separated into the share of items that, in accordance with other Australian Accounting Standards:

(i)       will not be reclassified subsequently to profit or loss; and

(ii)      will be reclassified subsequently to profit or loss when specific conditions are met.

83       [Deleted by the IASB]

84       [Deleted by the IASB]

85       An entity shall present additional line items (including by disaggregating the line items listed in paragraph 82), headings and subtotals in the statement(s) presenting profit or loss and other comprehensive income when such presentation is relevant to an understanding of the entity’s financial performance.

85A    When an entity presents subtotals in accordance with paragraph 85, those subtotals shall:

(a)      be comprised of line items made up of amounts recognised and measured in accordance with Australian-Accounting-Standards;

(b)      be presented and labelled in a manner that makes the line items that constitute the subtotal clear and understandable;

(c)       be consistent from period to period, in accordance with paragraph 45; and

(d)      not be displayed with more prominence than the subtotals and totals required in Australian Accounting Standards for the statement(s) presenting profit or loss and other comprehensive income.

85B    An entity shall present the line items in the statement(s) presenting profit or loss and other comprehensive income that reconcile any subtotals presented in accordance with paragraph 85 with the subtotals or totals required in Australian Accounting Standards for such statement(s).

86       Because the effects of an entity’s various activities, transactions and other events differ in frequency, potential for gain or loss and predictability, disclosing the components of financial performance assists users in understanding the financial performance achieved and in making projections of future financial performance.  An entity includes additional line items in the statement(s) presenting profit or loss and other comprehensive income and it amends the descriptions used and the ordering of items when this is necessary to explain the elements of financial performance.  An entity considers factors including materiality and the nature and function of the items of income and expense.  For example, a financial institution may amend the descriptions to provide information that is relevant to the operations of a financial institution.  An entity does not offset income and expense items unless the criteria in paragraph 32 are met.

87       An entity shall not present any items of income or expense as extraordinary items, in the statement(s) presenting profit or loss and other comprehensive income, or in the notes.

Profit or Loss for the Period

88       An entity shall recognise all items of income and expense in a period in profit or loss unless an Australian Accounting Standard requires or permits otherwise.

89       Some Australian Accounting Standards specify circumstances when an entity recognises particular items outside profit or loss in the current period.  AASB 108 specifies two such circumstances: the correction of errors and the effect of changes in accounting policies.  Other Australian Accounting Standards require or permit components of other comprehensive income that meet the Framework’s[5] definition of income or expense to be excluded from profit or loss (see paragraph 7).

Other Comprehensive Income for the Period

90       An entity shall disclose the amount of income tax relating to each item of other comprehensive income, including reclassification adjustments, either in the statement of profit or loss and other comprehensive income or in the notes.

91       An entity may present items of other comprehensive income either:

(a)      net of related tax effects; or

(b)      before related tax effects with one amount shown for the aggregate amount of income tax relating to those items.

If an entity elects alternative (b), it shall allocate the tax between the items that might be reclassified subsequently to the profit or loss section and those that will not be reclassified subsequently to the profit or loss section.

92       An entity shall disclose reclassification adjustments relating to components of other comprehensive income.

93       Other Australian Accounting Standards specify whether and when amounts previously recognised in other comprehensive income are reclassified to profit or loss.  Such reclassifications are referred to in this Standard as reclassification adjustments.  A reclassification adjustment is included with the related component of other comprehensive income in the period that the adjustment is reclassified to profit or loss.  These amounts may have been recognised in other comprehensive income as unrealised gains in the current or previous periods.  Those unrealised gains must be deducted from other comprehensive income in the period in which the realised gains are reclassified to profit or loss to avoid including them in total comprehensive income twice.

94       An entity may present reclassification adjustments in the statement(s) of profit or loss and other comprehensive income or in the notes.  An entity presenting reclassification adjustments in the notes presents the items of other comprehensive income after any related reclassification adjustments.

95       Reclassification adjustments arise, for example, on disposal of a foreign operation (see AASB 121) and when some hedged forecast cash flow affect profit or loss (see paragraph 6.5.11(d) of AASB 9 in relation to cash flow hedges).

96       Reclassification adjustments do not arise on changes in revaluation surplus recognised in accordance with AASB 116 or AASB 138 or on remeasurements of defined benefit plans recognised in accordance with AASB 119.  These components are recognised in other comprehensive income and are not reclassified to profit or loss in subsequent periods.  Changes in revaluation surplus may be transferred to retained earnings in subsequent periods as the asset is used or when it is derecognised (see AASB 116 and AASB 138).  In accordance with AASB 9, reclassification adjustments do not arise if a cash flow hedge or the accounting for the time value of an option (or the forward element of a forward contract or the foreign currency basis spread of a financial instrument) result in amounts that are removed from the cash flow hedge reserve or a separate component of equity, respectively, and included directly in the initial cost or other carrying amount of an asset or a liability.  These amounts are directly transferred to assets or liabilities.

Information to be Presented in the Statement(s) of Profit or Loss and Other Comprehensive Income or in the Notes

97       When items of income or expense are material, an entity shall disclose their nature and amount separately.

98       Circumstances that would give rise to the separate disclosure of items of income and expense include:

(a)      write-downs of inventories to net realisable value or of property, plant and equipment to recoverable amount, as well as reversals of such write-downs;

(b)      restructurings of the activities of an entity and reversals of any provisions for the costs of restructuring;

(c)       disposals of items of property, plant and equipment;

(d)      disposals of investments;

(e)       discontinued operations;

(f)       litigation settlements; and

(g)       other reversals of provisions.

99       An entity shall present an analysis of expenses recognised in profit or loss using a classification based on either their nature or their function within the entity, whichever provides information that is reliable and more relevant.

100    Entities are encouraged to present the analysis in paragraph 99 in the statement(s) presenting profit or loss and other comprehensive income.

101    Expenses are subclassified to highlight components of financial performance that may differ in terms of frequency, potential for gain or loss and predictability.  This analysis is provided in one of two forms.

102    The first form of analysis is the ‘nature of expense’ method.  An entity aggregates expenses within profit or loss according to their nature (for example, depreciation, purchases of materials, transport costs, employee benefits and advertising costs), and does not reallocate them among functions within the entity.  This method may be simple to apply because no allocations of expenses to functional classifications are necessary.  An example of a classification using the nature of expense method is as follows:

Revenue

 

X

Other income

 

X

Changes in inventories of finished goods and work in progress

 

X



Raw materials and consumables used

X

 

Employee benefits expense

X

 

Depreciation and amortisation expense

X

 

Other expenses

X

 

Total expenses

 

(X)

Profit before tax

 

X

103    The second form of analysis is the ‘function of expense’ or ‘cost of sales’ method and classifies expenses according to their function as part of cost of sales or, for example, the costs of distribution or administrative activities.  At a minimum, an entity discloses its cost of sales under this method separately from other expenses.  This method can provide more relevant information to users than the classification of expenses by nature, but allocating costs to functions may require arbitrary allocations and involve considerable judgement.  An example of a classification using the function of expense method is as follows:

 

Revenue

X

Cost of sales

(X)

Gross profit

X

Other income

X

Distribution costs

(X)

Administrative expenses

(X)

Other expenses

(X)

Profit before tax

X

104    An entity classifying expenses by function shall disclose additional information on the nature of expenses, including depreciation and amortisation expense and employee benefits expense.

105    The choice between the function of expense method and the nature of expense method depends on historical and industry factors and the nature of the entity.  Both methods provide an indication of those costs that might vary, directly or indirectly, with the level of sales or production of the entity.  Because each method of presentation has merit for different types of entities, this Standard requires management to select the presentation that is reliable and more relevant.  However, because information on the nature of expenses is useful in predicting future cash flows, additional disclosure is required when the function of expense classification is used.  In paragraph 104, ‘employee benefits’ has the same meaning as in AASB 119.

Statement of Changes in Equity

Information to be Presented in the Statement of Changes in Equity

106    An entity shall present a statement of changes in equity as required by paragraph 10.  The statement of changes in equity includes the following information:

(a)      total comprehensive income for the period, showing separately the total amounts attributable to owners of the parent and to non-controlling interests;

(b)      for each component of equity, the effects of retrospective application or retrospective restatement recognised in accordance with AASB 108; and

(c)       [deleted by the IASB]

(d)      for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately (as a minimum) disclosing changes resulting from:

(i)       profit or loss;

(ii)      other comprehensive income; and

(iii)     transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners and changes in ownership interests in subsidiaries that do not result in a loss of control.

Information to be Presented in the Statement of Changes in Equity or in the Notes

106A For each component of equity an entity shall present, either in the statement of changes in equity or in the notes, an analysis of other comprehensive income by item (see paragraph 106(d)(ii)).

107    An entity shall present, either in the statement of changes in equity or in the notes, the amount of dividends recognised as distributions to owners during the period, and the related amount of dividends per share.

108    In paragraph 106, the components of equity include, for example, each class of contributed equity, the accumulated balance of each class of other comprehensive income and retained earnings.

109    Changes in an entity’s equity between the beginning and the end of the reporting period reflect the increase or decrease in its net assets during the period.  Except for changes resulting from transactions with owners in their capacity as owners (such as equity contributions, reacquisitions of the entity’s own equity instruments and dividends) and transaction costs directly related to such transactions, the overall change in equity during a period represents the total amount of income and expense, including gains and losses, generated by the entity’s activities during that period.

110    AASB 108 requires retrospective adjustments to effect changes in accounting policies, to the extent practicable, except when the transition provisions in another Australian Accounting Standard require otherwise.  AASB 108 also requires restatements to correct errors to be made retrospectively, to the extent practicable.  Retrospective adjustments and retrospective restatements are not changes in equity but they are adjustments to the opening balance of retained earnings, except when an Australian Accounting Standard requires retrospective adjustment of another component of equity.  Paragraph 106(b) requires disclosure in the statement of changes in equity of the total adjustment to each component of equity resulting, from changes in accounting policies and separately, from corrections of errors.  These adjustments are disclosed for each prior period and the beginning of the period.

Statement of Cash Flows

111    Cash flow information provides users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilise those cash flows.  AASB 107 sets out requirements for the presentation and disclosure of cash flow information.

Notes

Structure

112    The notes shall:

(a)      present information about the basis of preparation of the financial statements and the specific accounting policies used in accordance with paragraphs 117-124;

(b)      disclose the information required by Australian Accounting Standards that is not presented elsewhere in the financial statements; and

(c)       provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.

113    An entity shall, as far as practicable, present notes in a systematic manner.  In determining a systematic manner, the entity shall consider the effect on the understandability and comparability of its financial statements.  An entity shall cross-reference each item in the statements of financial position and in the statement(s) of profit or loss and other comprehensive income and in the statements of changes in equity and of cash flows to any related information in the notes.

114    Examples of systematic ordering or grouping of the notes include:

(a)      giving prominence to the areas of its activities that the entity considers to be most relevant to an understanding of its financial performance and financial position, such as grouping together information about particular operating activities;

(b)      grouping together information about items measured similarly such as assets measured at fair value; or

(c)       following the order of the line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position, such as:

(i)        statement of compliance with IFRSs (see paragraph 16);

(ii)       significant accounting policies applied (see paragraph 117);

(iii)      supporting information for items presented in the statements of financial position and in the statement(s) of profit or loss and other comprehensive income and in the statements of changes in equity and of cash flows, in the order in which each statement and each line item is presented; and

(iv)     other disclosures, including:

(1)      contingent liabilities (see AASB 137) and unrecognised contractual commitments; and

(2)      non-financial disclosures, eg the entity’s financial risk management objectives and policies (see AASB 7).

115    [Deleted by the IASB]

116    An entity may present notes providing information about the basis of preparation of the financial statements and specific accounting policies as a separate section of the financial statements.

Disclosure of Accounting Policies

117    An entity shall disclose its significant accounting policies comprising:

(a)      the measurement basis (or bases) used in preparing the financial statements; and

(b)      the other accounting policies used that are relevant to an understanding of the financial statements.

118    It is important for an entity to inform users of the measurement basis or bases used in the financial statements (for example, historical cost, current cost, net realisable value, fair value or recoverable amount) because the basis on which an entity prepares the financial statements significantly affects users’ analysis.  When an entity uses more than one measurement basis in the financial statements, for example when particular classes of assets are revalued, it is sufficient to provide an indication of the categories of assets and liabilities to which each measurement basis is applied.

119    In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure would assist users in understanding how transactions, other events and conditions are reflected in reported financial performance and financial position.  Each entity considers the nature of its operations and the policies that the users of its financial statements would expect to be disclosed for that type of entity.  Disclosure of particular accounting policies is especially useful to users when those policies are selected from alternatives allowed in Australian Accounting Standards.  An example is disclosure of whether an entity applies the fair value or cost model to its investment property (see AASB 140 Investment Property).  Some Australian Accounting Standards specifically require disclosure of particular accounting policies, including choices made by management between different policies they allow.  For example, AASB 116 requires disclosure of the measurement bases used for classes of property, plant and equipment.

120    [Deleted by the IASB]

121    An accounting policy may be significant because of the nature of the entity’s operations even if amounts for current and prior periods are not material.  It is also appropriate to disclose each significant accounting policy that is not specifically required by Australian Accounting Standards but the entity selects and applies in accordance with AASB 108.

122    An entity shall disclose, along with its significant accounting policies or other notes, the judgements, apart from those involving estimations (see paragraph 125), that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

123    In the process of applying the entity’s accounting policies, management makes various judgements, apart from those involving estimations, that can significantly affect the amounts it recognises in the financial statements.  For example, management makes judgements in determining:

(a)      [deleted by the IASB]  

(b)      when substantially all the significant risks and rewards of ownership of financial assets and lease assets are transferred to other entities;

(c)       whether, in substance, particular sales of goods are financing arrangements and therefore do not give rise to revenue; and

(d)      whether the contractual terms of a financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

124    Some of the disclosures made in accordance with paragraph 122 are required by other Australian Accounting Standards.  For example, AASB 12 Disclosure of Interests in Other Entities requires an entity to disclose the judgements it has made in determining whether it controls another entity.  AASB 140 Investment Property requires disclosure of the criteria developed by the entity to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course of business, when classification of the property is difficult.

Sources of Estimation Uncertainty

125    An entity shall disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.  In respect of those assets and liabilities, the notes shall include details of:

(a)      their nature; and

(b)      their carrying amount as at the end of the reporting period.

126    Determining the carrying amounts of some assets and liabilities requires estimation of the effects of uncertain future events on those assets and liabilities at the end of the reporting period.  For example, in the absence of recently observed market prices, future-oriented estimates are necessary to measure the recoverable amount of classes of property, plant and equipment, the effect of technological obsolescence on inventories, provisions subject to the future outcome of litigation in progress, and long-term employee benefit liabilities such as pension obligations.  These estimates involve assumptions about such items as the risk adjustment to cash flows or discount rates, future changes in salaries and future changes in prices affecting other costs.

127    The assumptions and other sources of estimation uncertainty disclosed in accordance with paragraph 125 relate to the estimates that require management’s most difficult, subjective or complex judgements.  As the number of variables and assumptions affecting the possible future resolution of the uncertainties increases, those judgements become more subjective and complex, and the potential for a consequential material adjustment to the carrying amounts of assets and liabilities normally increases accordingly.

128    The disclosures in paragraph 125 are not required for assets and liabilities with a significant risk that their carrying amounts might change materially within the next financial year if, at the end of the reporting period, they are measured at fair value based on a quoted price in an active market for an identical asset or liability.  Such fair values might change materially within the next financial year but these changes would not arise from assumptions or other sources of estimation uncertainty at the end of the reporting period.

129    An entity presents the disclosures in paragraph 125 in a manner that helps users of financial statements to understand the judgements that management makes about the future and about other sources of estimation uncertainty.  The nature and extent of the information provided vary according to the nature of the assumption and other circumstances.  Examples of the types of disclosures an entity makes are:

(a)      the nature of the assumption or other estimation uncertainty;

(b)      the sensitivity of carrying amounts to the methods, assumptions and estimates underlying their calculation, including the reasons for the sensitivity;

(c)       the expected resolution of an uncertainty and the range of reasonably possible outcomes within the next financial year in respect of the carrying amounts of the assets and liabilities affected; and

(d)      an explanation of changes made to past assumptions concerning those assets and liabilities, if the uncertainty remains unresolved.

130    This Standard does not require an entity to disclose budget information or forecasts in making the disclosures in paragraph 125.

131    Sometimes it is impracticable to disclose the extent of the possible effects of an assumption or another source of estimation uncertainty at the end of the reporting period.  In such cases, the entity discloses that it is reasonably possible, on the basis of existing knowledge, that outcomes within the next financial year that are different from the assumption could require a material adjustment to the carrying amount of the asset or liability affected.  In all cases, the entity discloses the nature and carrying amount of the specific asset or liability (or class of assets or liabilities) affected by the assumption.

132    The disclosures in paragraph 122 of particular judgements that management made in the process of applying the entity’s accounting policies do not relate to the disclosures of sources of estimation uncertainty in paragraph 125.

133    Other Australian Accounting Standards require the disclosure of some of the assumptions that would otherwise be required in accordance with paragraph 125.  For example, AASB 137 requires disclosure, in specified circumstances, of major assumptions concerning future events affecting classes of provisions.  AASB 13 Fair Value Measurement requires disclosure of significant assumptions (including the valuation technique(s) and inputs) the entity uses when measuring the fair values of assets and liabilities that are carried at fair value.

Capital

134    An entity shall disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital.

135    To comply with paragraph 134, the entity discloses the following:

           (a)      qualitative information about its objectives, policies and processes for managing capital, including:

                       (i)        a description of what it manages as capital;

                       (ii)       when an entity is subject to externally imposed capital requirements, the nature of those requirements and how those requirements are incorporated into the management of capital; and

                       (iii)      how it is meeting its objectives for managing capital;

           (b)      summary quantitative data about what it manages as capital.  Some entities regard some financial liabilities (e.g. some forms of subordinated debt) as part of capital.  Other entities regard capital as excluding some components of equity (e.g. components arising from cash flow hedges);

           (c)       any changes in (a) and (b) from the previous period;

           (d)      whether during the period it complied with any externally imposed capital requirements to which it is subject; and

           (e)       when the entity has not complied with such externally imposed capital requirements, the consequences of such non-compliance.

           The entity bases these disclosures on the information provided internally to key management personnel.

136    An entity may manage capital in a number of ways and be subject to a number of different capital requirements.  For example, a conglomerate may include entities that undertake insurance activities and banking activities and those entities may operate in several jurisdictions.  When an aggregate disclosure of capital requirements and how capital is managed would not provide useful information or distorts a financial statement user’s understanding of an entity’s capital resources, the entity shall disclose separate information for each capital requirement to which the entity is subject.

Puttable Financial Instruments Classified as Equity

136A For puttable financial instruments classified as equity instruments, an entity shall disclose (to the extent not disclosed elsewhere):

           (a)      summary quantitative data about the amount classified as equity;

           (b)      its objectives, policies and processes for managing its obligation to repurchase or redeem the instruments when required to do so by the instrument holders, including any changes from the previous period;

           (c)       the expected cash outflow on redemption or repurchase of that class of financial instruments; and

           (d)      information about how the expected cash outflow on redemption or repurchase was determined.

Other Disclosures

137    An entity shall disclose in the notes:

           (a)      the amount of dividends proposed or declared before the financial statements were authorised for issue but not recognised as a distribution to owners during the period, and the related amount per share; and

           (b)      the amount of any cumulative preference dividends not recognised.

138    An entity shall disclose the following, if not disclosed elsewhere in information published with the financial statements:

           (a)      the domicile and legal form of the entity, its country of incorporation and the address of its registered office (or principal place of business, if different from the registered office);

           (b)      a description of the nature of the entity’s operations and its principal activities;

           (c)       the name of the parent and the ultimate parent of the group; and

           (d)      if it is a limited life entity, information regarding the length of its life.

Transition and Effective Date

139    [Deleted by the AASB]

139A [Deleted by the AASB]

Aus139A.1  AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 amended paragraph 106.  The amendment shall be applied retrospectively.

139B [Deleted by the AASB]

139C Paragraphs 68 and 71 were amended by AASB 2008-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Project issued in July 2008.  An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2009.  Earlier application is permitted.  If an entity applies the amendments for an earlier period it shall disclose that fact.

139D Paragraph 69 was amended by AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project issued in May 2009.  An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2010.  Earlier application is permitted.  If an entity applies the amendment for an earlier period it shall disclose that fact.

139E  [Deleted by the IASB]

139F  Paragraphs 106 and 107 were amended and paragraph 106A was added by AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project issued in June 2010.  An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2011.  Earlier application is permitted.

139G [Deleted by the IASB]

139H AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards, issued in August 2011, amended paragraphs 4, 119, 123 and 124.  An entity shall apply those amendments when it applies AASB 10 and AASB 12.

139I   AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13, issued in September 2011, amended paragraphs 128 and 133.  An entity shall apply those amendments when it applies AASB 13.

139J   AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income, issued in September 2011, amended paragraphs 7, 10, 82, 85-87, 90, 91, 94, 100 and 115, added paragraphs 10A, 81A, 81B and 82A, and deleted paragraphs 12, 81, 83 and 84.  An entity shall apply those amendments for annual reporting periods beginning on or after 1 July 2012.  Earlier application is permitted.  If an entity applies the amendments for an earlier period it shall disclose that fact.

139K AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) amended the definition of ‘other comprehensive income’ in paragraph 7 and paragraph 96.  An entity shall apply those amendments when it applies AASB 119 (September 2011).

139L  AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle, issued in June 2012, amended paragraphs 10, 38 and 41, deleted paragraphs 39 and 40 and added paragraphs 38A-38D and 40A-40D.  An entity shall apply that amendment retrospectively in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors for annual reporting periods beginning on or after 1 January 2013.  Earlier application is permitted.  If an entity applies that amendment for an earlier period it shall disclose that fact.

139M     [Deleted by the IASB]

139N AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15, issued in December 2014, amended paragraph 34.  An entity shall apply that amendment when it applies AASB 15.

139O AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (as amended), AASB 2014-1 Amendments to Australian Accounting Standards and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014), amended paragraphs Aus1.8, 7, 68, 71, 82, 93, 95, 96, 106 and 123 and deleted paragraph 139E.  Paragraph 139G, added by AASB 2010-7, was deleted by AASB 2014-1.  Paragraph 139M, added by AASB 2014-1, was deleted by AASB 2014-7.  An entity shall apply those amendments when it applies AASB 9 (December 2014).

139P  AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101, issued in January 2015, amended paragraphs Aus1.8, 10, 31, 54–55, 82A, 85, 113–114, 117, 119 and 122, added paragraphs 30A, 55A and 85A–85B and deleted paragraphs 115 and 120.  An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2016.  Earlier application is permitted.  Entities are not required to disclose the information required by paragraphs 28–30 of AASB 108 in relation to these amendments.

Withdrawal of IAS 1 (Revised 2003)

140    [Deleted by the AASB]


DELETED ias 1 TEXT

Deleted IAS 1 text is not part of AASB 101.

Paragraph 2

An entity shall apply this Standard in preparing and presenting general purpose financial statements in accordance with International Financial Reporting Standards (IFRSs).

Paragraph 139

An entity shall apply this Standard for annual periods beginning on or after 1 January 2009.  Earlier application is permitted.  If an entity adopts this Standard for an earlier period, it shall disclose that fact.

Paragraph 139A

IAS 27 (as amended in 2008) amended paragraph 106.  An entity shall apply that amendment for annual periods beginning on or after 1 July 2009.  If an entity applies IAS 27 (amended 2008) for an earlier period, the amendment shall be applied for that earlier period.  The amendment shall be applied retrospectively.

Paragraph 139B

Puttable Financial Instruments and Obligations Arising on Liquidation (Amendments to IAS 32 and IAS 1), issued in February 2008, amended paragraph 138 and inserted paragraphs 8A, 80A and 136A.  An entity shall apply those amendments for annual periods beginning on or after 1 January 2009.  Earlier application is permitted.  If an entity applies the amendments for an earlier period, it shall disclose that fact and apply the related amendments to IAS 32, IAS 39, IFRS 7 and IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments at the same time.

Paragraph 140

This Standard supersedes IAS 1 Presentation of Financial Statements revised in 2003, as amended in 2005.



[1]      Definition of IFRSs amended after the name changes introduced by the revised Constitution of the IFRS Foundation in 2010.

[2]      In December 2013 the AASB amended the Framework for the Preparation and Presentation of Financial Statements.  The Framework is identified in AASB 1048 Interpretation of Standards.  Paragraph 25 was superseded by Chapter 3 of the Framework.

[3]      Paragraphs 15-24 contain references to the objective of financial statements set out in the Framework for the Preparation and Presentation of Financial Statements (as identified in AASB 1048).  In December 2013 the AASB amended the Framework, and thereby replaced the objective of financial statements with the objective of general purpose financial reporting: see Chapter 1 of the Framework.

[4]      The Framework for the Preparation and Presentation of Financial Statements was amended by the AASB in December 2013.

[5]      The Framework for the Preparation and Presentation of Financial Statements was amended by the AASB in December 2013.