New accounting standards for 31 December 2020

The financial reporting arena has been shaken up over the last few years with three major areas of change – financial instruments, revenue and leases.

The next couple of years should see minimal changes in accounting standards, however each reporting period is likely to have some new standards and December 2020 is no different.

The table below shows the standards which are effective for the first time on 31 December with some brief comments about the changes and the entities that may be impacted.

STANDARDOVERVIEW OF CHANGESAFFECTED ENTITIES
AASB 2018 – 6 Amendments to Australian Accounting Standards – Definition of a businessAASB 2018 – 6 Amendments to Australian Accounting Standards – Definition of a business.Entities who are acquiring multiple assets should refer to this standard to assist in determining the accounting for the acquisition.
AASB 2018 – 7 Amendments to Australian Accounting Standards – Definition of MaterialUpdates to the definition of material, in particular to confirm that material information should not be obscured by immaterial information.Entities needing guidance about whether a transaction or balance is material.
AASB 1059 Service Concession Arrangements: Grantors Provides accounting requirements for public sector grantors in a service concession arrangement.Public sector entities who have service concession arrangements in place with the private sector.
AASB 2019 – 7 Amendments to Australian Accounting Standards – Disclosure of GFS Measures of Key Fiscal Aggregates and GAAP / GFS Reconciliations Permits relief from certain disclosures in the financial statements of general government sector entities and whole of government financial statements.General government sector entities and whole of government who choose to take advantage of the optional relief.
Conceptual Framework for Financial ReportingNew chapters on measurement and revised definitions of assets and liabilities along with clarification of certain reporting concepts.Applicable to for-profit private sector entities.
AASB 2019 – 3 Amendments to Australian Accounting Standards – Interest Rate Benchmark ReformModification of certain hedge accounting requirements in relation to uncertainty arising from the interest rate benchmark reform.Entities who are applying hedge accounting for interest rate risk.
AASB 2019 – 5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issued in AustraliaConfirms that entities who provide an IFRS compliance statement in their financial statements should disclose the impact of standards issued by IASB which have not yet been issued in Australia.Entities providing an IFRS compliance statements (e.g. listed entities) should have a process in place to identify IASB standards which have yet to be issued in Australia at the signing date of the financial statements.

 

Contact your local Bentleys audit and assurance expert for assistance with your financial reporting.
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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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