Federal Register of Legislation - Australian Government

Primary content

Standards/Accounting & Auditing as made
This instrument provides an up-to-date listing of Australian Interpretations and Framework documents and ensures the effectiveness of references.
Administered by: Treasury
Exempt from sunsetting by the Legislation (Exemptions and Other Matters) Regulation 2015 s12 item 18
Registered 23 Dec 2020
Tabling HistoryDate
Tabled HR02-Feb-2021
Tabled Senate02-Feb-2021

AASB Standard

AASB 1048

December 2020

Interpretation of StandardsTitle: AASB logo - Description: AASB logo with Australian crest and text identifying the Australian Government and the Australian Accounting Standards Board.

 


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COPYRIGHT

© Commonwealth of Australia 2020

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ISSN 1036-4803


Contents

Preface

comparison with international pronouncements

ACCOUNTING STANDARD

AASB 1048 INTERPRETATION OF STANDARDS

from paragraph

Objective                                                                                                                                                                             1

Application                                                                                                                                                                        2

Interpretations                                                                                                                                                             4

Australian Interpretations corresponding to IASB Interpretations                                                                            6

Other Australian Interpretations                                                                                                                                         8

Conceptual Framework                                                                                                                                       10

Commencement of the legislative instrument                                                                              12

Withdrawal of AASB pronouncements                                                                                                     13

 

 

Australian Accounting Standard AASB 1048 Interpretation of Standards is set out in paragraphs 1 – 13.  All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  AASB 1048 is to be read in the context of other Australian Accounting Standards, including AASB 1057 Application of Australian Accounting Standards.  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.

 


Preface

Introduction

The Australian Accounting Standards Board (AASB) is an Australian Government entity under the Australian Securities and Investments Commission Act 2001.  The AASB develops, issues and maintains Australian Accounting Standards, including Interpretations.  These are to be applied by:

(a)          entities required by the Corporations Act 2001 to prepare financial reports;

(b)          governments in preparing financial statements for the whole of government and the General Government Sector (GGS); and

(c)          entities in the private or public for-profit or not-for-profit sectors that are reporting entities or that prepare general purpose financial statements.

AASB 1053 Application of Tiers of Australian Accounting Standards establishes a differential reporting framework consisting of two tiers of reporting requirements for preparing general purpose financial statements:

(a)          Tier 1: Australian Accounting Standards; and

(b)          depending on the reporting period, either of the following:

(i)            Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements (for reporting periods beginning before 1 July 2021);

(ii)          Tier 2: Australian Accounting Standards – Simplified Disclosures (for reporting periods beginning on or after 1 July 2021, with earlier adoption permitted).

This Standard identifies the Australian Interpretations and classifies them into two groups: those that correspond to an International Accounting Standards Board (IASB) Interpretation and those that do not.  Entities are required to apply each relevant Australian Interpretation in preparing financial statements that are within the scope of the Standard.

In respect of the first group (Table 1), it is necessary for those Australian Interpretations, where relevant, to be applied in order for an entity to be able to make an explicit and unreserved statement of compliance with International Financial Reporting Standards (IFRS Standards).  The IASB defines IFRS Standards to include both IFRIC and SIC Interpretations.

In the second group (Table 2), this Standard lists the other Australian Interpretations, which do not correspond to the IASB Interpretations, to assist financial statement preparers and users to identify the other authoritative pronouncements necessary for compliance in the Australian context.

This Standard (see Table 3) also updates references to conceptual framework pronouncements in other Standards to refer to amended versions of the pronouncements, as identified in this Standard.

The Standard will be reissued or amended when necessary to keep the Tables up to date.

When does it apply?

This Standard is applicable to annual reporting periods ending on or after 31 December 2020 (see paragraph 2).  Earlier application is permitted as specified in paragraph 3, subject to paragraphs 7, 9, 11 and AusCF11 of this Standard.

What are the changes?

This Standard (issued in December 2020) supersedes the previous version of AASB 1048, issued in December 2017 and amended to March 2020.

The main differences between the previous version (as amended) and this version include:

(a)          the removal from Tables 1 and 2 of versions of Interpretations that do not apply to any of the reporting periods to which this Standard mandatorily applies (see paragraph 2);

(b)          the removal from Tables 1 and 2 of Interpretations that have been superseded by AASB 9 Financial Instruments, AASB 15 Revenue from Contracts with Customers or AASB 16 Leases;

(c)          the addition of amended versions of Interpretations in Tables 1 and 2, where applicable to any reporting period to which this Standard mandatorily applies.  This reflects amended versions of Interpretations arising as a result of the deferral of AASB 17 Insurance Contracts and its consequential amendments, and consequential amendments arising from the issuance of AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework and AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities; and

(d)          the addition of an amended version of the Framework for the Preparation and Presentation of Financial Statements in Table 3 as a result of the issuance of AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material.

Why have we issued this Standard?

This Standard clarifies that all Australian Interpretations have the same authoritative status.  Those that incorporate the IASB Interpretations must be applied to achieve compliance with IFRS Standards.  Australian Interpretations issued by the AASB comprise both AASB and UIG Interpretations.  UIG Interpretations were developed by the Urgent Issues Group, a former committee of the AASB.

This Standard also updates references in other Standards to the Conceptual Framework for Financial Reporting and the Framework for the Preparation and Presentation of Financial Statements to subsequent versions.

Need for a Service Standard

Australian Interpretations

In the Australian context, Australian Interpretations do not have the same legal status as Standards (delegated legislation) and are treated as ‘external documents’ by the Acts Interpretation Act 1901 and the Legislation Act 2003.  Although references in one Standard to a second Standard are ambulatory (automatically moving forward to refer to the most recently-issued version of the second Standard), references in a Standard to external documents are stationary (being fixed in time to refer to the contents of the external document when the Standard was issued).  A simple reference to an Australian Interpretation in a Standard can refer only to the Interpretation that existed when the Standard was issued.  It cannot refer to any revised version of the Interpretation that may exist at a later reporting date.  However, a Standard can refer to a second Standard and, when the first Standard is applied at a later reporting date, the reference will be to the then-current version of the second Standard, even if it has been reissued since the first Standard was issued.

The service Standard approach, as applied to Australian Interpretations, involves issuing this Standard to list the versions of Australian Interpretations, and referring to this Standard in every other Standard where necessary to refer to an Interpretation.  This enables references to the Interpretations in all other Standards to be updated by reissuing the service Standard.

This approach preserves the status of Australian Interpretations as ‘external documents’ referred to in a Standard.  It does not treat the Interpretations as delegated legislation or confer ambulatory status on the reference.  In each Standard where there is a need to refer to an Australian Interpretation, the reference will be to this Standard, phrased as “Interpretation [number] [title] as identified in AASB 1048” (or similar).  This reference, being to another Standard, is ambulatory and will refer to the version of this Standard that is in force from time to time.  AASB 1048 itself will contain the direct references to the external documents and will be reissued periodically.

This approach to clarifying the status of Australian Interpretations ensures there is no difference between the status in the hierarchy accorded to Interpretations in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors compared with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.

Australian conceptual framework

In the Australian context, an Australian conceptual framework pronouncement, such as the Conceptual Framework for Financial Reporting and the Framework for the Preparation and Presentation of Financial Statements, also does not have the same legal status as a Standard (delegated legislation) and, like Interpretations, is treated as an ‘external document’ by the Acts Interpretation Act 1901 and the Legislation Act 2003

The service Standard approach, as applied to the Australian conceptual framework, involves issuing this Standard to update references to conceptual framework pronouncements in other Standards.  This approach preserves the status of such pronouncements as ‘external documents’ referred to in a Standard.  It does not treat the pronouncements as delegated legislation or confer ambulatory status on the reference.

 


Comparison with international pronouncements

There is no International Accounting Standards Board (IASB) Standard that directly corresponds to AASB 1048.  However, Table 1 in AASB 1048 (see paragraph 6) contains a list of Australian Interpretations identifying the corresponding IASB Interpretations.

Tier 1

For-profit entities complying with the Australian Interpretations designated in this Standard as corresponding to the IASB Interpretations also comply with the Interpretations referred to by the IASB in its definition of International Financial Reporting Standards (IFRS Standards).

Not-for-profit entities’ compliance with IASB Interpretations will depend on whether any “Aus” paragraphs or Interpretations that specifically apply to not-for-profit entities provide additional guidance or contain applicable requirements that are inconsistent with IASB Interpretations.

Tier 2

Entities preparing general purpose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements or Australian Accounting Standards – Simplified Disclosures (Tier 2) will not be in compliance with all IASB Interpretations.

AASB 1053 Application of Tiers of Australian Accounting Standards explains the two tiers of reporting requirements.

Conceptual frameworks

In relation to references to the Conceptual Framework for Financial Reporting and the Framework for the Preparation and Presentation of Financial Statements in other Standards, the approach taken in this Standard to clarifying the applicable framework pronouncement ensures there is no difference between the version of the conceptual framework referred to in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and in AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, and in other Standards.

 


Accounting Standard AASB 1048

The Australian Accounting Standards Board makes Accounting Standard AASB 1048 Interpretation of Standards under section 334 of the Corporations Act 2001.

 

 

Keith Kendall

Dated 14 December 2020

Chair – AASB

Accounting Standard AASB 1048

Interpretation of Standards

Objective

1               The objective of this Standard is to provide an up-to-date listing of Australian Interpretations and to ensure the effectiveness of references in Australian Accounting Standards to Australian Interpretations and to the Framework for the Preparation and Presentation of Financial Statements (Framework) and the Conceptual Framework for Financial Reporting (Conceptual Framework).  AASB and UIG Interpretations are referred to collectively in this Standard as Australian Interpretations.

AusCF1                    AusCF paragraphs included in this Standard apply only to:

(a)            not-for-profit entities; and

(b)            for-profit entities that are not applying the Conceptual Framework for Financial Reporting (as identified in this Standard).

Such entities are referred to as ‘AusCF entities’.  For AusCF entities, the term ‘reporting entity’ is defined in AASB 1057 Application of Australian Accounting Standards and Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity also applies.  For-profit entities applying the Conceptual Framework for Financial Reporting (as set out in paragraph Aus1.1 of the Conceptual Framework) shall not apply AusCF paragraphs.

Application

2               This Standard applies to annual reporting periods ending on or after 31 December 2020.

3               This Standard may be applied to annual reporting periods that end before 31 December 2020.

Interpretations

4               This Standard refers to all Australian Interpretations currently approved by the AASB and applicable to any period[1] specified in paragraph 2 (by either mandatory or early application), classified according to whether they correspond to Interpretations adopted by the International Accounting Standards Board (IASB).

5               For ease of presentation, the Australian Interpretations are set out in two separate tables: in paragraph 6, Table 1 lists those corresponding to IASB Interpretations and, in paragraph 8, Table 2 lists the other Interpretations.  Each reference to an Interpretation in a row in each of the Tables 1 and 2 is to be treated as a separate provision of this Standard.

Australian Interpretations corresponding to IASB Interpretations

6               An entity shall apply each relevant Australian Interpretation listed in Table 1 below.

Table 1: Australian Interpretations corresponding to IASB Interpretations

Interpretation

Issue Date

Title

Application Date

(annual reporting periods)

IFRIC or SIC Interp’n

1

February 2016

[as amended to]

Changes in Existing Decommissioning, Restoration and Similar Liabilities

(beginning)

1 January 2019

IFRIC 1

2

March 2020

[as amended to]

Members’ Shares in Co-operative Entities and Similar Instruments

(beginning)

1 July 2021

IFRIC 2

2

July 2015

Members’ Shares in Co-operative Entities and Similar Instruments

(beginning)

1 January 2018

IFRIC 2

5

March 2020

[as amended to]

Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

(beginning)

1 July 2021

IFRIC 5

5

August 2015

Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

(beginning)

1 January 2018

IFRIC 5

6

August 2015

Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment

(beginning)

1 January 2016

IFRIC 6

7

August 2015

Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies

(beginning)

1 January 2016

IFRIC 7

10

August 2015

Interim Financial Reporting and Impairment

(beginning)

1 January 2018

IFRIC 10

12
May 2019

[as amended to]

Service Concession Arrangements

(beginning)

1 January 2020

IFRIC 12

12
December 2017

[as amended to]

Service Concession Arrangements

(beginning)

1 January 2019

IFRIC 12

14

August 2015

AASB 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

(beginning)

1 January 2016

IFRIC 14

16

May 2019

[as amended to]

Hedges of a Net Investment in a Foreign Operation

(beginning)

1 January 2020

IFRIC 16

16

August 2015

Hedges of a Net Investment in a Foreign Operation

(beginning)

1 January 2018

IFRIC 16

17

March 2020

[as amended to]

Distributions of Non-cash Assets to Owners

(beginning)

1 July 2021

IFRIC 17

17

August 2015

Distributions of Non-cash Assets to Owners

(beginning)

1 January 2016

IFRIC 17

19

May 2019

[as amended to]

Extinguishing Financial Liabilities with Equity Instruments

(beginning)

1 January 2020

IFRIC 19

19

August 2015

Extinguishing Financial Liabilities with Equity Instruments

(beginning)

1 January 2018

IFRIC 19

20

May 2019

[as amended to]

Stripping Costs in the Production Phase of a Surface Mine

(beginning)

1 January 2020

IFRIC 20

20

August 2015

Stripping Costs in the Production Phase of a Surface Mine

(beginning)

1 January 2016

IFRIC 20

21

August 2015

Levies

(beginning)

1 January 2016

IFRIC 21

22

May 2019

[as amended to]

Foreign Currency Transactions and Advance Consideration

(beginning)

1 January 2020

IFRIC 22

22

February 2017

Foreign Currency Transactions and Advance Consideration

(beginning)

1 January 2018

IFRIC 22

23

March 2020

[as amended to]

Uncertainty over Income Tax Treatments

(beginning)

1 July 2021

IFRIC 23

23

July 2017

Uncertainty over Income Tax Treatments

(beginning)

1 January 2019

IFRIC 23

107

August 2015

Introduction of the Euro

(beginning)

1 January 2018

SIC-7

110

August 2015

Government Assistance – No Specific Relation to Operating Activities

(beginning)

1 January 2016

SIC-10

125

August 2015

Income Taxes – Changes in the Tax Status of an Entity or its Shareholders

(beginning)

1 January 2016

SIC-25

129

March 2020

[as amended to]

Service Concession Arrangements: Disclosures

(beginning)

1 July 2021

SIC-29

129

July 2017

[as amended to]

Service Concession Arrangements: Disclosures

(beginning)

1 January 2019

SIC-29

132

May 2019

[as amended to]

Intangible Assets – Web Site Costs

(beginning)

1 January 2020

SIC-32

132

February 2016

[as amended to]

Intangible Assets – Web Site Costs

(beginning)

1 January 2019

SIC-32

7               The principal application date listed in Table 1 for each Interpretation is a reference to annual reporting periods beginning or ending (as indicated) on or after the date specified.  An entity may elect to apply an individual Interpretation to annual reporting periods in advance of that stated for the Interpretation in Table 1, subject to the early application requirements of the Interpretation.

Other Australian Interpretations

8               An entity shall apply each relevant Australian Interpretation listed in Table 2 below.

Table 2: Other Australian Interpretations

Interpretation

Issue Date

Title

Application Date

(annual reporting periods)

1003

May 2019

[as amended to]

Australian Petroleum Resource Rent Tax

(beginning)

1 January 2020

1003

December 2013

[as amended to]

Australian Petroleum Resource Rent Tax

(beginning)

1 January 2014

1019

May 2019

[as amended to]

The Superannuation Contributions Surcharge

(beginning)

1 January 2020

1019

December 2013

[as amended to]

The Superannuation Contributions Surcharge

(beginning)

1 January 2014

1030

December 2013

[as amended to]

Depreciation of Long-Lived Physical Assets: Condition-Based Depreciation and Related Methods

(beginning)

1 January 2014

1031

May 2019

[as amended to]

Accounting for the Goods and Services Tax (GST)

(beginning)

1 January 2020

1031

December 2016

[as amended to]

Accounting for the Goods and Services Tax (GST)

(beginning)

1 January 2018

1038

May 2019

[as amended to]

Contributions by Owners Made to Wholly-Owned Public Sector Entities

(beginning)

1 January 2020

1038

December 2016

[as amended to]

Contributions by Owners Made to Wholly-Owned Public Sector Entities

(beginning)

1 January 2019

1047

July 2020

[as amended to]

Professional Indemnity Claims Liabilities in Medical Defence Organisations

(beginning)

1 January 2023

1047

May 2019

[as amended to]

Professional Indemnity Claims Liabilities in Medical Defence Organisations

(beginning)

1 January 2020

1047

December 2013

[as amended to]

Professional Indemnity Claims Liabilities in Medical Defence Organisations

(beginning)

1 January 2014

1052

March 2020

[as amended to]

Tax Consolidation Accounting

(beginning)

1 July 2021

1052

May 2019

[as amended to]

Tax Consolidation Accounting

(beginning)

1 January 2020

1052

December 2016

[as amended to]

Tax Consolidation Accounting

(beginning)

1 January 2018

1055

December 2013

[as amended to]

Accounting for Road Earthworks

(beginning)

1 January 2014

9               The principal application date listed in Table 2 for each Interpretation is a reference to annual reporting periods beginning or ending (as indicated) on or after the date specified.  An entity may elect to apply an individual Interpretation to annual reporting periods in advance of that stated for the Interpretation in Table 2, subject to the early application requirements of the Interpretation.

Conceptual framework

10             Each reference to the Conceptual Framework for Financial Reporting (or Conceptual Framework) in other Australian Accounting Standards (including Interpretations) is taken to be a reference to the relevant pronouncement listed in Table 3 below.  Each row in Table 3 is to be treated as a separate provision of this Standard.

Table 3: Australian conceptual framework pronouncements

Issue Date

Title

Application Date

(annual reporting periods)

March 2020

[as amended to]

Conceptual Framework for Financial Reporting (or Conceptual Framework)

Note – for-profit entities applying the Conceptual Framework are set out in paragraph Aus1.1. of the Conceptual Framework

(beginning)

1 July 2021

May 2019

Conceptual Framework for Financial Reporting (or Conceptual Framework)

Note – this pronouncement is applicable only to for-profit private sector entities that have public accountability and are required by legislation to comply with Australian Accounting Standards and other for-profit entities that elect to apply this Framework

(beginning)

1 January 2020

AusCF10                 Notwithstanding paragraph 10, in respect of AusCF entities, each reference to the Framework for the Preparation and Presentation of Financial Statements (or Framework) in other Australian Accounting Standards (including Interpretations) is taken to be a reference to the relevant pronouncement listed in Table 3 below.  Each row in Table 3 is to be treated as a separate provision of this Standard.

Table 3: Australian conceptual framework pronouncements

Issue Date

 

Title

Application Date

(annual reporting periods)

March 2020

[as amended to]

Framework for the Preparation and Presentation of Financial Statements (or Framework)

(beginning)

1 July 2021

May 2019

[as amended to]

Framework for the Preparation and Presentation of Financial Statements (or Framework)

(beginning)

1 January 2020

December 2018

[as amended to]

Framework for the Preparation and Presentation of Financial Statements (or Framework)

(beginning)

1 January 2020

June 2014

[as amended to]

Framework for the Preparation and Presentation of Financial Statements (or Framework)

(beginning)

1 July 2014

11             This Standard updates references to the Conceptual Framework in Australian Accounting Standards (including Interpretations) to the relevant amended version of the Conceptual Framework.  The principal application date listed in each row of Table 3 is a reference to annual reporting periods beginning or ending (as indicated) on or after the date specified.  An entity may elect to apply an amended version of the pronouncement to annual reporting periods in advance of that stated in Table 3, subject to any early application paragraphs.

AusCF11                  Notwithstanding paragraph 11, in respect of AusCF entities, this Standard updates references to the Framework in Australian Accounting Standards (including Interpretations) to the relevant amended version of the Framework.  The principal application date listed in each row of Table 3 is a reference to annual reporting periods beginning or ending (as indicated) on or after the date specified.  An entity may elect to apply an amended version of the pronouncement to annual reporting periods in advance of that stated in Table 3, subject to any early application paragraphs.

Commencement of the legislative instrument

12             For legal purposes, this legislative instrument commences on 30 December 2020.

Withdrawal of AASB pronouncements

13             This Standard repeals AASB 1048 Interpretation of Standards issued in December 2017.  Despite the repeal, after the time this Standard starts to apply under section 334 of the Corporations Act (either generally or in relation to an individual entity), the repealed Standard continues to apply in relation to any period ending before that time as if the repeal had not occurred.

[Note: When this Standard applies under section 334 of the Corporations Act (either generally or in relation to an individual entity), it supersedes the application of the repealed Standard.]



[1]      Periods no longer than 18 months.