Disclosure of material accounting policy information
In early 2021, AASB 101 Presentation of Financial Statements was amended, requiring the disclosure of material accounting policies rather than significant accounting policies. These amendments were designed to help entities provide accounting policy disclosures that are more entity-specific, and therefore more useful to the users of their financial statements. Refer to our web article Applying materiality when preparing financial statement for further details.
Consistent with those amendments, AASB 2021-6 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards amends:
- AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities to require entities to disclose their material accounting policy information rather than their significant accounting policies. The amendments also clarify that information about measurement bases for financial instruments is expected to be material to an entity’s financial statements.
- AASB 1049 Whole of Government and General Government Sector Financial Reporting to require entities to disclose their material accounting policy information rather than their significant accounting policies.
AASB 2021-6 applies to annual reporting periods beginning on or after 1 January 2023 (which is the same application date as the amendments made to AASB 101).
Deferral of amendments for equity accounting
In 2014, amendments were made to AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures relating to the sale or contribution of assets between an investor and its associate or joint venture (AASB 2014-10). The amendments were later deferred indefinitely by the International Accounting Standards Board.
As Australian Accounting Standards are legislative instruments, the AASB is unable to defer the amendments indefinitely. Accordingly, the AASB has deferred the mandatory application of these amendments several times to ensure entities that claim compliance with IFRS® Standards are able to continue to do so.
AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections again defers the amendments to annual periods beginning on or after 1 January 2025 (from 1 January 2022). Consistent with the International Accounting Standards Board’s approach, the amendments can still be early adopted.
Other consistency and editorial changes
Both AASB 2021-6 and AASB 2021-7 make other editorial corrections and terminology consistency changes to various Australian Accounting Standards, including Interpretations, and several other pronouncements.
Refer to the PDF version of the Reporting Update for more details.