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This new standard resulted in significant changes for most entities reporting under Australian accounting standards, particularly:
The adoption of AASB 9 resulted in the adoption of the “Expected Credit Losses” model of provisioning — requiring preparers to consider the potential for future losses based on available information rather than allowing for impairment as-and-when actual losses were identified. As a result, complexity has also increased on common topics, particularly accounting for related-party loans.
Certain reliefs were provided related to certain relatively uncommon topics, including hedge accounting, allowing for the simpler designation of hedging pools and reductions in on-going compliance requirements.
Financial instruments remain a highly complex topic — the accounting standard extends over 100 pages and it often feels like it leaves more questions than answers. Individual contracts may contain one to all of the following:
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