INTRODUCTION
The objective of this Technical Accounting (TA) Alert is to:
- provide information regarding the Accounting Standards (and Interpretations) that have been issued with an effective date post 30 June 2026; and
- assist entities in meeting the disclosure requirements in paragraph 30 of AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
OVERVIEW
When the AASB issues a new or revised Standard (or an Interpretation)1 with an effective date after the end of the reporting period, an entity2 has a choice of either:
- early adoption of the Standard where permitted, in accordance with section 334(5) of Corporations Act 2001 (via a Director’s minute – an example is included in this Alert), provided that this is appropriately disclosed in the financial statements; or
- not adopting the Standard; in which case the entity is required to comply with the disclosure requirements in paragraph 30 of AASB 108.
In addition, paragraph 17 of AASB 1054 Australian Additional Disclosures requires entities to consider Standards issued by the International Accounting Standards Board (“IASB”) that have not yet been adopted by the Australian Accounting Standards Board (“AASB”) when making these disclosures.
As of the date of publication, two IFRS accounting standards have been issued by the IASB but have not yet been adopted by the AASB:
- IFRS 19 Subsidiaries without Public Accountability: Disclosures, which has not been adopted in Australia; and
- IFRS 20 Regulatory Assets and Regulatory Liabilities, which was recently issued by the IASB and is expected to be adopted by the AASB.
Accordingly, these Standards are required to be considered when applying paragraphs 30 and 31 of AASB 108.
REQUIREMENTS OF PARAGRAPH 30 OF AASB 108
30 When an entity has not applied a new Australian Accounting Standard that has been issued but is not yet effective, the entity shall disclose:
a this fact; and
b known or reasonably estimable information relevant to assessing the possible impact that application of the new Australian Accounting Standard will have on the entity’s financial statements in the period of initial application.
Furthermore, paragraph 31 of AASB 108 states that in complying with paragraph 30 an entity should consider disclosing:
a the title of the new Australian Accounting Standard;
b the nature of the impending change or changes in accounting policy;
c the date by which application of the Australian Accounting Standard is required;
d the date at which the entity plans to apply the Australian Accounting Standard initially; and
e either:
i a discussion of the impact that initial application of the Australian Accounting Standard is expected to have on the entity’s financial statements; or
ii if the impact is not known or reasonably estimable; a statement to that effect.
STANDARDS AND INTERPRETATIONS WITH AN EFFECTIVE DATE POST 30 JUNE 2025
The table following summarises all Accounting Standards (and Interpretations) that have been issued by the AASB and IASB as at 10 June 2026. Any further Standards (and Interpretations) issued after this date will also need to be disclosed up until the date of authorisation of the financial report.
Although the table lists most of the Standards (and Interpretations) issued but not yet effective, entities should only disclose Standards (and Interpretations) that are relevant to them. For instance, a for-profit entity does not need to disclose the impact of a new Standard that only applies to entities in the not-for-profit sector.
In addition, it is important that the sample disclosure/indicative impact for each Standard and Interpretation is tailored to suit the particular circumstances of each entity. Entities should pay particular attention to this disclosure, noting that the Australian Securities and Investments Commission (ASIC) has been expressing concerns over a number of years with entities providing ‘boiler plate’ disclosures.
ENTITIES APPLYING AUSTRALIAN ACCOUNTING STANDARDS – SIMPLIFIED DISCLOSURES (SD)
Tier 2 entities reporting under the Simplified Disclosure (SD) regime are not required to disclose Accounting Standards issued but not yet effective. Accordingly, no SD-related amendments have been included in the table. Given the relative significance of different standards not yet effective, entities may choose to make related disclosures on an optional basis. We encourage entities to consider disclosure where the impact is potentially material.
EARLY ADOPTION OF STANDARDS
Where Standards or Interpretations are adopted early, the following Directors’ minutes may be used for Corporations Act entities3:
“In accordance with s334(5) of the Corporations Act, the Directors are early adopting the following Accounting Standards:
- AASB xxxx
- Interpretation yy”
| New / revised pronouncement |
Superseded pronouncement |
Nature of change |
Effective date (annual reporting periods beginning on or after) |
Likely impact on initial application |
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The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures.
The amendments clarify that, on a sale or contribution of assets to a joint venture or associate or on a loss of control when joint control or significant influence is retained in a transaction involving an associate or a joint venture, any gain or loss recognised will depend on whether the assets or subsidiary constitute a business, as defined in AASB 3 Business Combinations. Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas a partial gain or loss attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a business.
This amendment effectively introduces an exception to the general requirement in AASB 10 to recognise full gain or loss on the loss of control over a subsidiary. The exception only applies to the loss of control over a subsidiary that does not contain a business, if the loss of control is the result of a transaction involving an associate or a joint venture that is accounted for using the equity method. Corresponding amendments have also been made to AASB 128.
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1 January 2022*
*AASB 2014-10 has been deferred via the cumulative effects of AASB 2017-5, AASB 2021-7c and AASB 2024-4 until financial reporting periods commencing on or after 1 January 2028.
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[If the entity has concluded that there will be no material impact.]
When these amendments are first adopted for the year ending 30 June 2029, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact.]
Based on the entity’s assessment, it is expected that the first-time adoption of these amendments for the year ending 30 June 2029 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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AASB 2022-9:
- amends AASB 17 Insurance Contracts to include modifications that apply to public sector entities;
- amends AASB 1050 Administered Items to provide an accounting policy choice for government departments to apply either AASB 17 or AASB 137 Provisions, Contingent Liabilities and Contingent Assets in determining the information to be disclosed about administered captive insurer activities; and
- repeals AASB 4 Insurance Contracts and AASB 1023 General Insurance Contracts and reverses the temporary consequential amendments set out in AASB 2022-8 that amended various Standards to permit public sector entities to continue applying AASB 4 and AASB 1023 to annual periods beginning on or after 1 January 2023 but before 1 July 2026 given AASB 17 applies to all entities for annual periods beginning on or after 1 July 2026.
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[If the entity has concluded that there will be no material impact.]
When these amendments are first adopted for the year ending 30 June 2027, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact.]
Based on the entity’s assessment, it is expected that the first-time adoption of these amendments for the year ending 30 June 2027 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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This amending standard amends AASB 9 Financial Instruments and AASB 7 Financial Instruments: Disclosures to clarify how the contractual cash flows from financial assets should be assessed when determining their classification. The amendment also clarifies the derecognition requirements of financial liabilities that are settled through electronic payment systems. The amendment also amends disclosure requirements relating to investments in equity instruments designated at fair value through other comprehensive income and adds disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs.
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[If the entity has concluded that there will be no material impact.]
When the amendment is first adopted for the year ending 30 June 2027, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact]
Based on the entity’s assessment, it is expected that the first-time adoption of these amendments for the year ending 30 June 2027 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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AASB 2024-3 amends:
- AASB 1 First-time Adoption of Australian Accounting Standards to improve consistency between exceptions for retrospective application of hedging accounting and the requirements for hedge accounting in AASB 9;
- AASB 7 Financial Instruments: Disclosures to replace a deleted cross-reference with a reference to AASB 13 Fair Value Measurement; and improve consistency in the language used in AASB 7 with the language used in AASB 13;
- AASB 9 Financial Instruments to clarify how a lessee accounts for the derecognition of a lease liability when it is extinguished; and addresses an inconsistency between AASB 9 and the requirements in AASB 15 Revenue from Contracts with Customers in relation to the term ‘transaction price’;
- AASB 10 Consolidated Financial Statements in relation to determining de facto agents of an entity; and
- AASB 107 Statement of Cash Flows to replace the term ‘cost method’ with ‘at cost’ as the term is no longer defined in Australian Accounting Standards.
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[If the entity has concluded that there will be no material impact.]
When the amendment is first adopted for the year ending 30 June 2027, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact]
Based on the entity’s assessment, it is expected that the first-time adoption of these amendments for the year ending 30 June 2027 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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AASB 2025-1 amends AASB 7 Financial Instruments: Disclosures and AASB 9 Financial Instruments to allow entities to better reflect contracts referencing nature-dependent electricity in the financial statements. The amendments:
- clarify the application of the ‘own-use’ criteria to nature-dependent electricity contracts;
- permit hedge accounting if these contracts are used as hedging instruments; and
- add new disclosure requirements to enable users of financial statements to better understand the effect of these contracts on an entity’s financial performance and cash flows.
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[If the entity has concluded that there will be no material impact.]
When the amendment is first adopted for the year 30 June 2027, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact]
Based on the entity’s assessment, it is expected that the first-time adoption of these amendments for the year ending 30 June 2027 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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AASB 2025-4 amends AASB 121 The Effects of Changes in Foreign Exchange Rates and AASB 129 Financial Reporting in Hyperinflationary Economies to clarify the translation procedures where an entity’s presentation currency is that of a hyperinflationary economy. In particular, the amendments provide guidance on:
- translating the results and financial position of an entity with a non-hyperinflationary functional currency into a hyperinflationary presentation currency; and
- translating the results and financial position of a foreign operation with a non-hyperinflationary functional currency into a hyperinflationary presentation currency.
The amendments also address how to account for the entity’s presentation currency ceasing to be the currency of a hyperinflationary economy.
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[If the entity has concluded that there will be no material impact.]
When the amendment is first adopted for the year 30 June 2028, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact]
Based on the entity’s assessment, it is expected that the first-time adoption of these amendments for the year ending 30 June 2028 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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AASB 101 Presentation of Financial Statements
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AASB 18 replaces AASB 101 as the standard describing the primary financial statements and sets out requirements for the presentation and disclosure of information in AASB-compliant financial statements. Amongst other changes, it introduces the concept of the “management-defined performance measure” to financial statements and requires the classification of transactions presented within the statement of profit or loss within one of five categories – operating, investing, financing, income taxes, and discontinued operations. It also provides enhanced requirements for the aggregation and disaggregation of information.
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1 January 2027* & 1January 2028**
* For-profit entities (other than superannuation entities applying AASB 1056 Superannuation Entities) preparing Tier 1 general purpose financial statements, with earlier application permitted.
**Not-for-profit private and public sector entities and superannuation entities applying AASB 1056, with earlier application permitted.
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[If the entity has concluded that there will be no material impact.]
When the standard is first adopted for the year ending 30 June 2028, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact]
Based on the entity’s assessment, it is expected that the adoption of this standard for the year ending 30 June 2028 will have a material impact on the financial statements, in particular requiring the presentation of the statement of comprehensive income to be amended such that transactions are classified as one of five categories – operating, investing, financing, income taxes, and discontinued operations. Certain management-defined performance measures utilised in communications with stakeholders by management will also require presentation and additional disclosure in the financial statements.
In addition to the inclusion of the above:
[If the entity has concluded that there will be a material impact, but not yet determined the extent of the impact]:
The entity has not undertaken an assessment as to the impact of these changes at this stage.
OR
[If the entity has concluded that there will be a material impact, and has determined the extent of the impact]:
The entity has determined that the impacts on the statement of comprehensive income will be as follows:
- (insert impact)
- (insert impact)
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IFRS 19 Subsidiaries without Public Accountability: Disclosures specifies the disclosure requirements that eligible subsidiaries are permitted to apply instead of the disclosure requirements in other IFRS accounting standards.
IFRS 19 applies to an entity’s consolidated, separate or individual financial statements if at the end of the reporting period:
a) it is a subsidiary;
b) it does not have public accountability; and
c) it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards.
IFRS 19 is available to use immediately, subject to jurisdictional endorsement. As of the date of this TA Alert, it had not yet been adopted within Australia, however paragraph 17 of AASB 1054 Australian Additional Disclosures requires that standards issued by the IASB and not by the AASB be considered for disclosure in accordance with paragraphs 30 and 31 of AASB 108.
Currently, IFRS 19 has not been adopted in Australia– that is, it is only adoptable at election of the preparer, and not where compliance with Australian Accounting Standards is required as it has not been adopted by the AASB. We note that it is unlikely that IFRS 19 will have a material impact on entities as it will not impact recognition, measurement, presentation or disclosure for entities preparing Tier 1 or Tier 2 financial statements in Australia.
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[If the entity has concluded that there will be no material impact.]
When the standard is first adopted for the year ending 30 June 2028, there will be no material impact on the financial statements.
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IFRS 14 Regulatory Deferral Accounts
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IFRS 20 Regulatory Assets and Regulatory Liabilities applies to entities subject to a regulatory agreement that gives rise to regulatory assets and liabilities. The regulatory agreements involve a regulator which determines the rate that an entity can charge its customers for goods or services in a period.
IFRS 20 allows entities to recognise the total allowed compensation for regulatory goods or services in the same period in which the regulatory goods or services are supplied, even where there is a difference in timing between the time of supply and when it charges its customers. This may result in recognition of revenue that would not have been recognised at that time under IFRS 15.
The application of IFRS 20 aims to provide users with more relevant information about the effects of differences in timing on an entity’s financial performance and financial position. IFRS 20 outlines requirements for the recognition, measurement, presentation and disclosure of regulatory assets, regulatory liabilities, regulatory income and regulatory expense.
Early adoption is permitted, with entities able to choose either full retrospectively adoption or a modified retrospective approach.
IFRS 20 was issued by the IASB on 27 May 2026. It has not yet been adopted in Australia. Entities that intend to assert compliance with IFRS Standards are required, in accordance with paragraph 17 of AASB 1054, to consider the impact of IFRS 20 when applying the disclosure requirements in paragraphs 30 and 31 of AASB 108.
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[If the entity has concluded that there will be no material impact.]
When the standard is first adopted for the year ending 30 June 2030, there will be no material impact on the financial statements.
[If the entity has concluded that there will be a material impact]
Based on the entity’s assessment, it is expected that the adoption of this standard for the year ending 30 June 2030 will have a material impact on the financial statements, in particular:
- (insert impact)
- (insert impact)
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ACTION REQUIRED
With the 30 June 2026 reporting season in full swing, entities should now take time to review and consider the impact of new and revised accounting standards that have been issued but are not yet effective.
FURTHER INFORMATION
If you wish to discuss any of the information included in this Technical Accounting Alert, please get in touch with your local Grant Thornton Australia contact or a member of the National Assurance Quality Team at national.assurance.quality@au.gt.com.
1Where an entity includes an explicit and unreserved statement of compliance with International Financial Reporting Standards (IFRSs) as required by paragraph 16 of AASB 101 Presentation of Financial Statements, the entity needs to consider Standards issued by the IASB but not yet issued by the AASB. This is likely to apply to all entities, except for those issuing special purpose financial statements and not-for-profit entities.
2The requirements of paragraph 30 of AASB 108 are mandatory for not-for profit entities preparing special purpose financial statements while complying with Australian Accounting Standards and for all entities preparing tier 1 general purpose financial statements (i.e. those entities not applying Australian Accounting Standards – Simplified Disclosures).
3Section 334(5) of Corporations Act 2001 states that a company, registered scheme or disclosing entity may elect to apply the Accounting Standard to an earlier period unless the Standard says otherwise. The election must be made in writing by the Directors.
