AASB 1048 - Interpretation of Standards - August 2015

A ASB Standard AASB 1048 August 2015 Interpretation of Standards Obtaining a c opy of this Accounting Standard This Standard is available o n the AASB website: www.aasb.gov .au. Australian Accounting Standards Board PO Box 204 Collins Street West Victoria 8007 AUSTRALIA Phone: (03) 9617 7637 E-mail: [email protected] .au W ebsite: www.aasb.gov .au Other e nquiries Phone: (03) 9617 7600 E-mail: [email protected] .au COPYRIGHT © Commonwealth of Australia 2015 This work is copyright. Apart from any use as permitted under the Copyright Act 1968 , no part may be reproduced by any process without prior written permission. Requests and enquiries concerning reproduction and rights should be addressed to The Director of Finance and Administration, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007. ISSN 1036-4803 Contents Preface comparison with international pronouncements ACCOUNTING STANDARD AASB 1048 INTERPRETATION OF STANDARDS from p aragraph Objective 1 Application 2 Interpretations 4 Australian Interpretations corresponding to IASB Interpretations 6 Ot her 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 – 1 3 . 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 Accou nting 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 Austral ian Government a gency 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 /or (c) entiti es 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) Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements. What does this Standard require? 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 ( IFRSs ) . The IASB defines IFRSs 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 the Framework for the Preparation and Presentation of Financial Statements in other Standards to refer to an amended version of the Framework , as identified in this Standard. The Standard will be reissued 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 August 2015 (see paragraph 2 ). E arl ier application is permitted as specified in paragraph 3 , subject to paragraphs 7 , 9 and 1 1 of this Standard. What are the changes? This Standard (issued in August 2015) supersedes the previous version of AASB 1048, issued in December 2013. The main differences between the previous version and this version include: (a) the removal from Tables 1 and 2 of version s of Interpretations that do not apply to any of the reporting periods to which this Standard mandatorily applies (see paragraph 2 ). This includes the removal of the following superseded Interpretations : (i) Interpretation 112 Consolidation – Special Purpose Entities ; (ii) Interpretation 113 Jointly Controlled Entities – Non-Monetary Contributions by Venturers ; and (iii) Interpretation 1039 Substantive Enactment of Major Tax Bills in Australi a ; (b) the addition of amended version s 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 in relation to amendments to AASB 9 Financial Instruments and consequential amendments arising from the issuance of AASB 15 Revenue from Contracts with Customers ; and (c) the addition of new versions of the Interpretations in Table 1 following the reissuance by the AASB of its pronouncements that incorporate IFRSs. 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 IFRSs. 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 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 Legislative Instruments 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 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 c onceptual f ramework In the Australian context, an Australian conceptual framework pronouncement, such as the Framework for the Preparation and Presentation of Financial Statements ( Framework ), 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 Legislative Instruments Act 2003 . The service Standard approach, as applied to the Australian conceptual framework, involves issuing this Standard to update references to the Framework in other Standards. This approach preserves the status of the Framework as an ‘external document’ referred to in a Standard. It does not treat the Framework as delegated legislation or confer ambulatory status on the reference. Comparison with i nternational p ronouncements 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 (IFRSs). 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 purp ose financial statements under Australian Accounting Standards – Reduced Disclosure Requirements (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 f ramework In relation to references to 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 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 . Kris Peach Dated 14 August 2015 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 ). AASB and UIG Interpretations are referred to collectively in this Standard as Australian Interpretations. Application 2 This Standard applies to annual reporting periods ending on or after 31 August 2015 . 3 This Standard may be applied to annual reporting periods that end before 31 August 2015 . 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 sep arate 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 July 2015 Changes in Existing Decommissioning, Restoration and Similar Liabilities (beginning) 1 January 201 6 IFRIC 1 1 December 2013 [as amended to] Changes in Existing Decommissioning, Restoration and Similar Liabilities (beginning) 1 January 2014 IFRIC 1 2 July 2015 Members’ Shares in Co-operative Entities and Similar Instruments (beginning) 1 January 2018 IFRIC 2 2 December 2014 [as amended to] Members’ Shares in Co-operative Entities and Similar Instruments (beginning) 1 January 2018 IFRIC 2 2 June 2014 [as amended to] Members’ Shares in Co-operative Entities and Similar Instruments (beginning) 1 January 2018 IFRIC 2 2 December 2013 [as amended to] Members’ Shares in Co-operative Entities and Similar Instruments (beginning) 1 January 2014 IFRIC 2 4 August 2015 Determining whether an Arrangement contains a Lease (beginning) 1 January 2016 IFRIC 4 4 December 2013 [as amended to] Determining whether an Arrangement contains a Lease (beginning) 1 January 2014 IFRIC 4 5 August 2015 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (beginning) 1 January 2018 IFRIC 5 5 December 2014 [as amended to] Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (beginning) 1 January 2018 IFRIC 5 5 June 2014 [as amended to] Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (beginning) 1 January 2018 IFRIC 5 5 December 2013 [as amended to] Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (beginning) 1 January 2014 IFRIC 5 6 August 2015 Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment (beginning) 1 January 2016 IFRIC 6 6 December 2013 [as amended to] Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment (beginning) 1 January 2014 IFRIC 6 7 August 2015 Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies (beginning) 1 January 2016 IFRIC 7 7 December 2013 [as amended to] Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies (beginning) 1 January 2014 IFRIC 7 9 December 2013 [as amended to] Reassessment of Embedded Derivatives (beginning) 1 January 2014 IFRIC 9 10 August 2015 Interim Financial Reporting and Impairment (beginning) 1 January 2018 IFRIC 10 10 December 2014 [as amended to] Interim Financial Reporting and Impairment (beginning) 1 January 2018 IFRIC 10 10 June 2014 [as amended to] Interim Financial Reporting and Impairment (beginning) 1 January 2018 IFRIC 10 10 December 2013 [as amended to] Interim Financial Reporting and Impairment (beginning) 1 January 2014 IFRIC 10 12 August 2015 Service Concession Arrangements (beginning) 1 January 2018 IFRIC 12 12 December 2014 [as amended to] Service Concession Arrangements (beginning) 1 January 2018 IFRIC 12 12 June 2014 [as amended to] Service Concession Arrangements (beginning) 1 January 2018 IFRIC 12 12 December 2014 [as amended to] Service Concession Arrangements (beginning) 1 January 2017 IFRIC 12 12 December 2013 [as amended to] Service Concession Arrangements (beginning) 1 January 2014 IFRIC 12 13 December 2013 [as amended to] Customer Loyalty Programmes (beginning) 1 January 2014 IFRIC 13 14 August 2015 AASB 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction (beginning) 1 January 2016 IFRIC 14 14 December 2013 [as amended to] AASB 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction (beginning) 1 January 2014 IFRIC 14 15 December 2013 [as amended to] Agreements for the Construction of Real Estate (beginning) 1 January 2014 IFRIC 15 16 August 2015 Hedges of a Net Investment in a Foreign Operation (beginning) 1 January 2018 IFRIC 16 16 December 2014 [as amended to] Hedges of a Net Investment in a Foreign Operation (beginning) 1 January 2018 IFRIC 16 16 June 2014 [as amended to] Hedges of a Net Investment in a Foreign Operation (beginning) 1 January 2018 IFRIC 16 16 December 2013 [as amended to] Hedges of a Net Investment in a Foreign Operation (beginning) 1 January 2014 IFRIC 16 17 August 2015 Distributions of Non-cash Assets to Owners (beginning) 1 January 2016 IFRIC 17 17 December 2013 [as amended to] Distributions of Non-cash Assets to Owners (beginning) 1 January 2014 IFRIC 17 18 December 2013 [as amended to] Transfers of Assets from Customers (beginning) 1 January 2014 IFRIC 18 19 August 2015 Extinguishing Financial Liabilities with Equity Instruments (beginning) 1 January 2018 IFRIC 19 19 December 2014 [as amended to] Extinguishing Financial Liabilities with Equity Instruments (beginning) 1 January 2018 IFRIC 19 19 June 2014 [as amended to] Extinguishing Financial Liabilities with Equity Instruments (beginning) 1 January 2018 IFRIC 19 19 December 2013 [as amended to] Extinguishing Financial Liabilities with Equity Instruments (beginning) 1 January 2014 IFRIC 19 20 August 2015 Stripping Costs in the Production Phase of a Surface Mine (beginning) 1 January 201 6 IFRIC 20 20 December 2013 [as amended to] Stripping Costs in the Production Phase of a Surface Mine (beginning) 1 January 2014 IFRIC 20 21 August 2015 Levies (beginning) 1 January 2016 IFRIC 21 21 December 2013 [as amended to] Levies (beginning) 1 January 2014 IFRIC 21 107 August 2015 Introduction of the Euro (beginning) 1 January 2018 SIC-7 107 June 2014 [as amended to] Introduction of the Euro (beginning) 1 January 2018 SIC-7 107 December 2013 [as amended to] Introduction of the Euro (beginning) 1 January 2014 SIC-7 110 August 2015 Government Assistance – No Specific Relation to Operating Activities (beginning) 1 January 201 6 SIC-10 110 December 2013 [as amended to] Government Assistance – No Specific Relation to Operating Activities (beginning) 1 January 2014 SIC-10 115 August 2015 Operating Leases – Incentives (beginning) 1 January 2016 SIC-15 115 December 2013 [as amended to] Operating Leases – Incentives (beginning) 1 January 2014 SIC-15 125 August 2015 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders (beginning) 1 January 2016 SIC-25 125 December 2013 [as amended to] Income Taxes – Changes in the Tax Status of an Entity or its Shareholders (beginning) 1 January 2014 SIC-25 127 August 2015 Evaluating the Substance of Transactions Involving the Legal Form of a Lease (beginning) 1 January 2018 SIC-27 127 December 2014 [as amended to] Evaluating the Substance of Transactions Involving the Legal Form of a Lease (beginning) 1 January 2018 SIC-27 127 December 2014 [as amended to] Evaluating the Substance of Transactions Involving the Legal Form of a Lease (beginning) 1 January 2017 SIC-27 127 December 2013 [as amended to] Evaluating the Substance of Transactions Involving the Legal Form of a Lease (beginning) 1 January 2014 SIC-27 129 August 2015 Service Concession Arrangements: Disclosures (beginning) 1 January 2016 SIC-29 129 June 2014 [as amended to] Service Concession Arrangements: Disclosures (beginning) 1 July 2014 SIC-29 129 December 2013 [as amended to] Service Concession Arrangements: Disclosures (beginning) 1 January 2014 SIC-29 131 December 2013 [as amended to] Revenue – Barter Transactions Involving Advertising Services (beginning) 1 January 2014 SIC-31 132 August 2015 Intangible Assets – Web Site Costs (beginning) 1 January 2017 SIC-32 132 December 2014 [as amended to] Intangible Assets – Web Site Costs (beginning) 1 January 2017 SIC-32 132 December 2013 [as amended to] Intangible Assets – Web Site Costs (beginning) 1 January 2014 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 December 2013 [as amended to] Australian Petroleum Resource Rent Tax (beginning) 1 January 2014 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 December 2014 [as amended to] Accounting for the Goods and Services Tax (GST) (beginning) 1 January 2017 1031 December 2013 [as amended to] Accounting for the Goods and Services Tax (GST) (beginning) 1 January 2014 1038 December 2014 [as amended to] Contributions by Owners Made to Wholly-Owned Public Sector Entities (beginning) 1 January 2017 1038 December 2013 [as amended to] Contributions by Owners Made to Wholly-Owned Public Sector Entities (beginning) 1 January 2014 1042 December 2013 [as amended to] Subscriber Acquisition Costs in the Telecommunications Industry (beginning) 1 January 2014 1047 December 2013 [as amended to] Professional Indemnity Claims Liabilities in Medical Defence Organisations (beginning) 1 January 2014 1052 December 2014 [as amended to] Tax Consolidation Accounting (beginning) 1 January 2017 1052 December 2013 [as amended to] Tax Consolidation Accounting (beginning) 1 January 2014 1055 December 2013 [as amended to] Accounting for Road Earthworks (beginning) 1 January 2014 9 The principal application date listed in Tabl e 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 requ irements of the Interpretation . Conceptual f ramework 10 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 Ta ble 3 below. Each row in Table 3 is to be treated as a separate provision of this Standard. Table 3: Australian c onceptual f ramework pronouncements Issue Date Title Application Date (annual reporting periods) June 2014 [as amended to] Framework for the Preparation and Presentation of Financial Statements (or Framework) (beginning) 1 July 2014 December 2013 [as amended to] Framework for the Preparation and Presentation of Financial Statements (or Framework) (ending) 20 December 2013 11 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 l egislative i nstrument 12 For legal purposes, this legislative instrument commences on 30 August 2015 . Withdrawal of AASB pronouncements 13 This Standard repeals AASB 1048 Interpretation of Standards issued in December 2013. 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.