Appendix C (AASB1058_12-16_COMPdec22_01-23)

An entity shall apply this Standard for annual reporting periods beginning on or after 1 January 2019.  Earlier application is permitted provided that entities apply AASB 15 Revenue from Contracts with Customers to the same period.  If an entity applies this Standard earlier, it shall disclose that fact.

Notwithstanding paragraph C1, an entity may elect not to apply this Standard to research grants until annual reporting periods beginning on or after 1 July 2019. If a not-for-profit entity applies this Standard to research grants prior to that, it shall also apply AASB 15 to research grants at the same time.

AASB 17, issued in July 2017, amended paragraph 7.  An entity shall apply that amendment when it applies AASB 17.

For the purposes of the transition requirements in paragraphs C3–C12:

(a) the date of initial application is the beginning of the annual reporting period in which an entity first applies this Standard; and

(b) a completed contract is a contract or transaction for which the entity has recognised all of the income in accordance with AASB 1004 Contributions.

An entity shall apply this Standard either:

(a) retrospectively to each prior reporting period presented in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors; or

(b) retrospectively with the cumulative effect of initially applying this Standard recognised at the date of initial application in accordance with paragraphs C6–C11.

Notwithstanding the requirements of paragraph 28 of AASB 108, when this Standard is first applied, an entity need only present the quantitative information required by paragraph 28(f) of AASB 108 for the annual reporting period immediately preceding the first annual reporting period for which this Standard is applied (the ‘immediately preceding period’) and only if the entity applies this Standard retrospectively in accordance with paragraph C3(a).  An entity may also present this information for the current period or for earlier comparative periods, but is not required to do so.

When applying this Standard retrospectively in accordance with paragraph C3(a), as a practical expedient an entity need not restate completed contracts or transactions that:

(a) begin and end within the same annual reporting period; or

(b) are completed contracts or transactions at the beginning of the earliest period presented.

If an entity applies this expedient, it shall do so consistently to all completed contracts or transactions within all reporting periods presented and shall disclose the use of this expedient.

If an entity elects to apply this Standard retrospectively in accordance with paragraph C3(b), the entity shall not restate comparative information.  Instead, the entity shall recognise the cumulative effect of initially applying this Standard as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the date of initial application.  Under this transition method, an entity may elect to apply this Standard retrospectively only to contracts and transactions that are not completed contracts at the date of initial application.

For the reporting period that includes the date of initial application, an entity shall provide both of the following additional disclosures if this Standard is applied retrospectively in accordance with paragraph C3(b):

(a) the amount by which each financial statement line item is affected in the current reporting period by the application of this Standard as compared to AASB 1004 Contributions before the change; and

(b) an explanation of the reasons for significant changes identified in paragraph C7(a).

Assets acquired for consideration that was significantly less than fair value principally to enable the entity to further its objectives may have been measured on initial recognition under other Australian Accounting Standards at a cost that was significantly less than fair value.  As a practical expedient, such assets are not required to be remeasured at fair value, whether the entity elects to apply this Standard retrospectively in accordance with paragraph C3(a) or C3(b).

If an entity applies this Standard before applying AASB 16 Leases, and notwithstanding the requirements in paragraph C3, for leases that (1) at inception had significantly below-market terms and conditions principally to enable the entity to further its objectives and (2) were classified as operating leases in accordance with AASB 117 Leases, the entity shall not apply the requirements of this Standard to recognise any asset or income.  Instead, the entity shall continue to apply its accounting policy under AASB 117 to those operating leases.  On transition to AASB 16 Leases, the entity shall apply the transition requirements of that Standard to leases classified as operating leases in accordance with AASB 117.

If an entity elects to measure a class of right-of-use assets at initial recognition at fair value and applies this Standard before applying AASB 16, for leases that (1) at inception had significantly below-market terms and conditions principally to enable the entity to further its objectives and (2) were classified as finance leases in accordance with AASB 117, and if an entity elects to apply this Standard in accordance with:

(a) paragraph C3(a) – the entity shall:

(i) measure each leased asset in the class at fair value at the beginning of the earliest period presented;

(ii) measure the lease liability in accordance with AASB 117;

(iii) recognise any related items in accordance with paragraph 9; and

(iv) recognise any income arising as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the earliest period presented; or

(b) paragraph C3(b) – the entity shall:

(i) measure each leased asset in the class at fair value at the date of initial application of this Standard;

(ii) measure the lease liability in accordance with AASB 117;

(iii) recognise any related items in accordance with paragraph 9; and

(iv) recognise any income arising as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the date of initial application of this Standard.

If an entity elects not to measure a class of right-of-use assets at initial recognition at fair value and applies this Standard before applying AASB 16, for leases that (1) at inception had significantly below-market terms and conditions principally to enable the entity to further its objectives and (2) were classified as finance leases in accordance with AASB 117, the entity shall continue to apply its accounting policy under AASB 117 to those finance leases.  On transition to AASB 16, the entity shall apply the transition requirements of that Standard to leases classified as finance leases in accordance with AASB 117.

An entity applying paragraph C10 may, as a practical expedient, apply the paragraph to a portfolio of leases with similar characteristics if the entity reasonably expects that the effects on the financial statements of this approach would not differ materially from applying paragraph C10 to the individual leases within that portfolio.  If accounting for a portfolio, an entity shall use estimates and assumptions that reflect the size and composition of the portfolio.

If an entity applies this Standard but does not yet apply AASB 9 Financial Instruments, any reference in this Standard to AASB 9 shall be read as a reference to AASB 139 Financial Instruments: Recognition and Measurement.