AASB 16 Leases with the exception of short term and low value The key changes introduced by leases will come on to the AASB 16 include balance sheet and will be the recognition recognised as right of use of operating assets with a leases (which are corresponding lease currently not liability. In the operating recognised) on statement, the operating balance sheet. lease expense will be replaced by depreciation 01 Jan 2019 expense of the asset and The assessment has indicated an interest charge. that most There will be no change for lessors as the classification of operating and finance leases remains unchanged. AASB 1058 Income of Not-for-Profit AASB 1058 standard will replace the 01 Jan 2019 The current revenue recognition for upon completion and satisfaction of Entities The restructure of administrative performance obligations for assets arrangement will remain under AASB being constructed, or income will be 1004 and will be restricted to recognised at a point in time for of acquisition of assets. government entities and contributions by owners in a public sector context. The revenue recognition for operating AASB 1058 establishes principles for grants will need to be analysed to in transactions that are not within the establish whether the requirements under other applicable standards need scope of AASB 15, where the to consideration to acquire an asset is to be considered for recognition of significantly less than fair value to liabilities (which will have the effect of enable not-for-profit entities to further deferring the income associated with grants their objective. these grants). Only after that analysis and would it be possible to conclude other whether there are any changes to types grants is to operating grants. of recognise revenue up The impact on current revenue front upon recognition of the changes is the receipt of phasing and timing of revenue the funds. recorded in the profit and loss This may statement. to change public under AASB sector 1058, as capital grants for the construction of assets will need to be deferred. in Income will AASB be 1004 recognised over time,
AASB 16 Leases The key changes introduced by AASB 16 include the recognition of operating leases (which are currently not recognised) on balance sheet. 01 Jan 2019 The assessment has indicated that most with the exception of short term and low value leases will come on to the balance sheet and will be recognised as right of use assets with a corresponding lease liability. In the operating statement, the operating lease expense will be replaced by depreciation expense of the asset and an interest charge. There will be no change for lessors as the classification of operating and finance leases remains unchanged. AASB 1058 Income of Not-for-Profit AASB 1058 standard will replace the 01 Jan 2019 The current revenue recognition for Entities of in to grants and other types of to public sector in AASB 1004 The restructure of administrative arrangement will remain under AASB 1004 and will be restricted to government entities and contributions by owners in a public sector context. AASB 1058 establishes principles for transactions that are not within the scope of AASB 15, where the consideration to acquire an asset is significantly less than fair value to enable not-for-profit entities to further their objective. grants is to recognise revenue up front upon receipt of the funds. This may change under AASB 1058, as capital grants for the construction of assets will need to be deferred. Income will be recognised over time, upon completion and satisfaction of performance obligations for assets being constructed, or income will be recognised at a point in time for acquisition of assets. The revenue recognition for operating grants will need to be analysed to establish whether the requirements under other applicable standards need to be considered for recognition of liabilities (which will have the effect of deferring the income associated with these grants). Only after that analysis would it be possible to conclude whether there are any changes to operating grants. The impact on current revenue recognition of the changes is the phasing and timing of revenue recorded in the profit and loss statement.
293832_Annual_Report_2018_word.docx