What's new for 30 June 2009

In 2006, the International Accounting Standards Board (“IASB”) announced that it would not require the mandatory application of new standards under development or major amendments to existing standards before 1 January 2009.

This was as a result of the IASB’s ongoing review of its work program and of market practices, as the board was trying to provide a stable platform of standards for those countries that adopted IFRSs in 2005 and to allow new countries to adopt IFRS.

This means that whilst standards were issued since 2006, they were not mandatory until the 2009 / 2010 financial year.

The few new requirements at 30 June 2009 relate to specific and less common financial instruments (the rare reclassifications following the global financial crisis and hybrid instruments) along with the Accounting Interpretation on customer loyalty programmes.

Some of these pronouncements are shown in the table below:

Name of pronouncement	Summary of pronouncements
Reclassification of financial assets – Amendments to IAS 39 and IFRS 7 (October 2008)	The Amendments permit an entity to: reclassify non-derivative financial assets (other than those designated at fair value through profit or loss by the entity upon initial recognition) out of the fair value through profit or loss category in particular circumstances; transfer from the available for sale category to the loans and receivables category a financial asset that would have met the definition of loans and receivables (if it had not been designated as available for sale), if the entity has the intention and ability to hold that financial asset for the foreseeable future. Additional disclosure requirements have been included in IFRS 7 to provide information to readers of the financial statements where an entity opts to reclassify financial assets under the Amendments to IAS 39. Further information regarding these changes can be found in TA alert 2008-19
Interpretation 13 Customer Loyalty Programs (August 2007)	This Interpretation gives guidance on accounting for customer loyalty award credits granted to an entity’s customers as part of a sales transaction and which, subject to meeting any further qualifying conditions, the customers can redeem in the future for free or discounted goods or services.
Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities	The amendment to this interpretation primarily reflects changes resulting from the December 2007 amendments to AASB 1004 that prescribe requirements for accounting for “restructures of administrative arrangements”.
AASB 2009-3 Embedded derivatives [AASB 139 & Interpretation 9]	This is applicable where entities reclassify or will reclassify hybrid financial instruments in accordance with the October 2008 amendments to IAS 39 as described above.  Such entities will need to assess whether there are any embedded derivatives that should have been separated on reclassification.  While there is no limitation in scope, the amendments will primarily impact the financial sector where reclassification were particular relevant.

Grant Thornton’s IFRS team have issued an alert which covers the key standards and interpretations which Grant Thornton believes will have the most impact for our clients.  This can be accessed using the following link:

Click here to access TA alert 2009-05

We will also see a number of new and revised standards becoming effective for the first time for 30 June 2009 half years and 31 December 2009 and 30 June 2010 year ends, particularly in the following areas:

• Segment reporting
• Presentation of financial statements
• Borrowing costs
• Financial instruments
• Share based payments
• Business combinations

There is a requirement to provide disclosure for new or amended accounting standards and interpretations that have been issued but are not yet effective, where they are likely to have a material impact on future financial statements. 

We have published a guide providing details of each pronouncement covered by the disclosure requirement which can be accessed by clicking on the following link:

Click here to access TA alert 2009-06


Hopefully good news for December 2009 and later balance dates will be the arrival of the IASB’s IFRS for SMEs accounting standard that is expected to be released by the IASB in July 2009. Grant Thornton has already made representations to the new Minister Chris Bowen to immediately fast track the application of the IFRS for SMEs standard on a voluntary basis to non-listed companies, based on a significant reduction in unnecessary compliance costs for businesses.

Author: Keith Reilly and Carmen Ridley, June 2009

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Alternatively, please contact Keith Reilly 02 8297 2530 or Carmen Ridley 03 8663 6299