EXECUTIVE SUMMARY
The objective of this Technical Accounting (TA) Alert is to:
- provide information on new and revised Accounting Standards that are mandatorily applicable for the first time to 30 June 2024 annual and/or half-year ends; and
- highlight other recent financial reporting developments.
This TA Alert incorporates all the relevant pronouncements and developments as at 21 May 2024. Entities should also take into account any new pronouncements issued or developments taking place after this date if they are relevant for the financial year and/or half-year ending 30 June 2024.
For a list of all the pronouncements issued by the AASB and the IASB that are not yet effective, refer to our latest technical alert on this topic on our website.
OVERVIEW
The new and revised Australian accounting requirements that are mandatory for the first time to annual and/or half-year reporting periods ending 30 June 2024 are summarised below.
Download table (with links)
Processing...
| Order |
Standard / Interpretation |
Mandatory effective date (Annual periods beginning on or after…) |
Applicable for the first time to year ending 30 June 2024 |
Applicable for the first time to half-year ending 30 June 2024 |
|
1
|
AASB 17 Insurance Contracts
|
1-Jan-23
|
Yes
|
No
|
|
2
|
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as current or non-current
|
1-Jan-24
|
No
|
Yes
|
|
3
|
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates
|
1-Jan-23
|
Yes
|
No
|
|
4
|
AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
|
1-Jan-23
|
Yes
|
No
|
|
5
|
AASB 2021-6 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies: Tier 2 and Other Accounting Standards
|
1-Jan-23
|
Yes
|
No
|
|
6
|
AASB 2021-7b Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections [AASB 17 editorials]
|
1-Jan-23
|
Yes
|
No
|
|
7
|
AASB 2022-1 Amendments to Australian Accounting Standards – Initial Application of AASB 17 and AASB 9 – Comparative Information
|
1-Jan-23
|
Yes
|
No
|
|
8
|
AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback
|
1-Jan-24
|
No
|
Yes
|
|
9
|
AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants
|
1-Jan-24
|
No
|
Yes
|
|
10
|
AASB 2022-7 Editorial Corrections to Australian Accounting Standards and Repeal of Superseded and Redundant Standards
|
1-Jan-23
|
Yes
|
No
|
|
11
|
AASB 2022-8 Amendments to Australian Accounting Standards – Insurance Contracts: Consequential Amendments
|
1-Jan-23
|
Yes
|
No
|
|
12
|
AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities
|
1-Jan-24
|
No
|
Yes
|
|
13
|
AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements
|
1-Jan-24
|
No
|
Yes
|
|
14
|
AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules
|
1-Jan-23
|
Yes
|
No
|
|
15
|
AASB 2023-3 Amendments to Australian Accounting Standards – Disclosure of Non-current Liabilities with Covenants: Tier 2
|
1-Jan-24
|
No
|
Yes
|
|
16
|
AASB 2023-4 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules: Tier 2 Disclosures
|
1-Jan-23
|
Yes
|
No
|
|
17
|
AASB 2024-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements: Tier 2 Disclosures
|
1-Jan-24
|
No
|
Yes
|
|
|
|
|
|
|
FIRST TIME APPLICATION TO FULL-YEAR REPORTING PERIODS ENDING 30 JUNE 2024
There are several new and revised standards that became effective for the annual/half-year periods ending 30 June 2024. This TA Alert focuses only on standards and interpretations with relatively significant changes. Other standards are unlikely to have any significant impact on entities.
AASB 17 Insurance Contracts
AASB 17 Insurance Contracts replaces AASB 4 Insurance Contracts which permitted various accounting treatments for insurance contracts. AASB 17 establishes principles for the recognition, measurement, presentation, and disclosure of insurance contracts within the scope of the Standard. The objective of AASB 17 is to ensure that an entity provides relevant information that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect that insurance contracts have on an entity’s financial position, financial performance, and cash flows.
AASB 17 requires all insurance contracts to be accounted for in a consistent manner and requires insurance obligations to be accounted for using current values. The standard introduces insurance contract measurement principles requiring:
- current, explicit and unbiased estimates of future cash flows;
- discount rates that reflect the characteristics of the contracts’ cash flows; and
- explicit adjustment for non-financial risk.
Under AASB 17:
- day one profits should be deferred as contractual service margin and allocated systematically to profit or loss as entities provide coverage and are released from risk;
- revenue is no longer equal to written premiums but to the change in the contract liability covered by consideration;
- a separate measurement model applies to reinsurance contracts held.
- Where modifications occur, the entity either:
- derecognises the original contract and recognises the new contract subject to the satisfaction of certain conditions, or treats the changes in cash flows caused by the modification as changes in estimates of fulfilment cash flows; and
- increased disclosure requirements apply.
A reminder that the application of AASB 17 is broader than to entities within the insurance industry as it applies to any contract that meets the definition of an insurance contract as defined in AASB 17.
OTHER DEVELOPMENTS THAT ARE RELEVANT TO ANNUAL PERIODS ENDING 30 JUNE 2024
ASIC focus areas for 30 June 2024
The Australian Securities and Investments Commission (ASIC) have recently released focus areas for their financial reporting and audit surveillance program for 30 June 2024. A Technical Accounting Alert has been included on our website discussing these focus areas.
