What's new for December 2009?

With a number of new accounting standards coming into effect for annual reporting periods beginning on or after 1 January 2009, now is the time to ensure that all necessary changes to 2009 financial statements have been identified. Plans to implement any necessary changes to accounting policies and disclosures should be well in hand.

The most significant standard changes are discussed below and a complete list of all new and revised standards is included in the latest edition of Grant Thornton Internationals’ IFRS News which can be accessed by clicking here.

IAS 1 / AASB 101 Presentation of Financial Statements
The purpose of the revised statement was to make the information published in a set of financial statements more useful to the user.  Some key changes to AASB 101 are documented below:

• All items of income and expenditure in the period are required to be presented in a single ‘statement of comprehensive income’ or in two statements: a ‘separate income statement’ and a ‘statement of comprehensive income’
• An additional statement of financial position covering the beginning of the earliest comparative period presented is required in certain circumstances
• A ‘statement of changes in equity’ is now required to be presented as a primary statement in all circumstances.  The contents of this compulsory statement are restricted to changes in owners’ equity arising from owners in their capacity as owners.  
• For more detailed information, see TA Alert 2008 – 08

IFRS 8 / AASB 8 Operating Segments
The scope of AASB 8 (listed entities and those in the scope of listing) is significantly reduced from the superseded standard AASB 114 Segment Reporting (all reporting entities).

The standard requires entities to adopt the ‘management approach’ to reporting on their operating segments.   The segment results disclosed in annual financial statements are to be based on the reports used by management to evaluate segment performance and allocate resources to operating segments.  These internal reports will typically use different accounting conventions to those required in the IFRS primary statements which may result in some practical difficulties for preparers in moving to this new standard.

For more detailed information, see Grant Thornton’s Guide to Operating Segments.

IAS 23 / AASB 123 Borrowing Costs
The revised standard:

• eliminates the previous benchmark treatment of recognising borrowing costs as an expense
• requires borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset to be capitalised as part of the cost of that asset
• requires all other borrowing costs to be expensed as incurred

For more detailed information, see Grant Thornton’s Guide to Capitalisation of Borrowing Costs.

Your Grant Thornton contact will be able to assist you in working through the requirements of the new standards or you can contact our National Audit Support team at nas@grantthornton.com.au.

Author: Carmen Ridley, November 2009

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