Topic Key Requirements Effective Impact on public sector date entity financial statements AASB 9 Financial The key changes include the 1 January The assessment has Instruments simplified requirements for the 2018 identified that the classification and measurement amendments are likely to of financial assets, new hedging result in earlier recognition accounting model and a revised of impairment losses and at impairment loss model to more regular intervals. recognise impairment losses While there will be no earlier, as opposed to the current significant impact arising approach that recognises from AASB 9, there will be impairment only when incurred. a change in the way financial instruments are disclosed. AASB 2010-7| The requirements for classifying 1 January The assessment has Amendments to and measuring financial liabilities 2018 identified that the financial Australian were added to AASB 9. The impact of available for sale Accounting existing requirements for the (AFS) assets will now be Standards arising classification of financial liabilities reported through other from AASB 9 and the ability to use the fair comprehensive income value option have been retained. (OCI) and no longer (December 2010) recycled to the profit and However, where the fair value loss. option is used for financial Changes in own credit risk liabilities the change in fair value in respect of liabilities is accounted as follows: designated at fair value the change in fair value through profit and loss will attributable to changes in credit now be presented within risk is presented in other (OCI). comprehensive income (OCI); other fair value changes are presented in and loss. If this approach creates or enlarges and accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss. AASB 2014-1 Amends various AASs to reflect 1 January This amending standard Amendments to the decision to defer the 2018 will defer the application AASB’s Australian mandatory application date of period of AASB 9 to the Accounting AASB 9 to annual reporting 2018–19 reporting period in Standards[Part E periods beginning on or after 1 accordance with the Financial January 2018 as a consequence transition requirements. Instruments] of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements.
Topic Key Requirements Effective date Impact on public sector entity financial statements AASB 9 Financial Instruments The key changes include the simplified requirements for the classification and measurement of financial assets, new hedging accounting model and a revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred. 1 January 2018 The assessment has identified that the amendments are likely to result in earlier recognition of impairment losses and at more regular intervals. While there will be no significant impact arising from AASB 9, there will be a change in the way financial instruments are disclosed. AASB 2010-7| Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) The requirements for classifying and measuring financial liabilities were added to AASB 9. The existing requirements for the classification of financial liabilities and the ability to use the fair value option have been retained. However, where the fair value option is used for financial liabilities the change in fair value is accounted as follows: the change in fair value attributable to changes in credit risk is presented in other comprehensive income (OCI); other fair value changes are presented in and loss. If this approach creates or enlarges and accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss. 1 January 2018 The assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) and no longer recycled to the profit and loss. Changes in own credit risk in respect of liabilities designated at fair value through profit and loss will now be presented within (OCI). AASB 2014-1 Amendments to Australian Accounting Standards[Part E Financial Instruments] Amends various AASs to reflect the AASB’s decision to defer the mandatory application date of AASB 9 to annual reporting periods beginning on or after 1 January 2018 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements. 1 January 2018 This amending standard will defer the application period of AASB 9 to the 2018–19 reporting period in accordance with the transition requirements.
vla-annual-report-2016-17-final.docx