Notes (AASB18_06-24)

An entity shall disclose in the notes: 

(a) information about the basis of preparation of the financial statements (see paragraphs 6A–6N of AASB 108) and the specific accounting policies used (see paragraphs 27A–27I of AASB 108); 

(b) information required by Australian Accounting Standards that is not presented in the primary financial statements; and 

(c) other information that is not presented in the primary financial statements, but is necessary for an understanding of any of them (see paragraph 20).

An entity shall, as far as practicable, present notes in a systematic manner (see paragraph B112). In determining a systematic manner, the entity shall consider the effect on the understandability and comparability of its financial statements. An entity shall cross-reference each item in the primary financial statements to any related information in the notes. If amounts disclosed in the notes are included in one or more line items in the primary financial statements, an entity shall disclose in the note the line item(s) in which the amounts are included.

An entity may disclose notes providing information about the basis of preparation of the financial statements and specific accounting policies used in a separate section of the financial statements.

If not disclosed elsewhere in information published with the financial statements, an entity shall disclose in the notes: 

(a) the domicile and legal form of the entity, its country of incorporation and the address of its registered office (or principal place of business, if different from the registered office); 

(b) a description of the nature of the entity’s operations and its principal activities; 

(c) the name of the parent and the ultimate parent of the group; and 

(d) if it is a limited-life entity, information regarding the length of its life.

A management-defined performance measure is a subtotal of income and expenses that (see paragraphs B113–B122): 

(a) an entity uses in public communications outside financial statements; 

(b) an entity uses to communicate to users of financial statements management’s view of an aspect of the financial performance of the entity as a whole; and 

(c) is not listed in paragraph 118, or specifically required to be presented or disclosed by Australian Accounting Standards.

Subtotals of income and expenses that are not management-defined performance measures are: 

(a) gross profit or loss (revenue minus cost of sales) and similar subtotals (see paragraph B123); 

(b) operating profit or loss before depreciation, amortisation and impairments within the scope of AASB 136; 

(c) operating profit or loss and income and expenses from all investments accounted for using the equity method; 

(d) for an entity that applies paragraph 73, a subtotal comprising operating profit or loss and all income and expenses classified in the investing category; 

(e) profit or loss before income taxes; and 

(f) profit or loss from continuing operations.

An entity shall presume that a subtotal of income and expenses that it uses in public communications outside its financial statements communicates to users of financial statements management’s view of an aspect of the financial performance of the entity as a whole, unless, applying paragraph 120, the entity rebuts the presumption.

An entity is permitted to rebut the presumption described in paragraph 119 and assert that a subtotal does not communicate management’s view of an aspect of the financial performance of the entity as a whole, but only if it has reasonable and supportable information available that demonstrates the basis for the assertion (see paragraphs B124–B131).

The objective of the disclosures for management-defined performance measures is for an entity to provide information to help a user of financial statements understand: 

(a) the aspect of financial performance that, in management’s view, is communicated by a management-defined performance measure; and 

(b) how the management-defined performance measure compares with the measures defined by Australian Accounting Standards.

An entity shall disclose information about all measures that meet the definition of management-defined performance measures in paragraph 117 in a single note (see paragraphs B132–B133). This note shall include a statement that the management-defined performance measures provide management’s view of an aspect of the financial performance of the entity as a whole and are not necessarily comparable with measures sharing similar labels or descriptions provided by other entities.

An entity shall label and describe each management-defined performance measure in a clear and understandable manner that does not mislead users of financial statements (see paragraphs B134–B135). For each management-defined performance measure, the entity shall disclose: 

(a) a description of the aspect of financial performance that, in management’s view, is communicated by the management-defined performance measure. This description shall include explanations of why, in management’s view, the management-defined performance measure provides useful information about the entity’s financial performance. 

(b) how the management-defined performance measure is calculated. 

(c) a reconciliation between the management-defined performance measure and the most directly comparable subtotal listed in paragraph 118 or total or subtotal specifically required to be presented or disclosed by Australian Accounting Standards (see paragraphs B136–B140). 

(d) the income tax effect (determined by applying paragraph B141) and the effect on non-controlling interests for each item disclosed in the reconciliation required by (c). 

(e) a description of how the entity applies paragraph B141 to determine the income tax effect required by (d).

If an entity changes how it calculates a management-defined performance measure, adds a new management-defined performance measure, ceases using a previously disclosed management-defined performance measure or changes how it determines the income tax effects of the reconciling items required by paragraph 123(d), it shall disclose: 

(a) an explanation that enables users of financial statements to understand the change, addition or cessation and its effects. 

(b) the reasons for the change, addition or cessation. 

(c) restated comparative information to reflect the change, addition or cessation unless it is impracticable to do so. An entity’s selection of a management-defined performance measure is not an accounting policy choice. Nonetheless, in assessing whether restating the comparative information is impracticable, an entity shall apply the requirements in paragraphs 50–53 of AASB 108.

If an entity does not disclose the restated comparative information required by paragraph 124(c) because it is impracticable to do so, it shall disclose that fact.

An entity shall disclose in the notes information that enables users of financial statements to evaluate the entity’s objectives, policies and processes for managing capital.

To comply with paragraph 126 an entity shall disclose in the notes: 

(a) qualitative information about its objectives, policies and processes for managing capital, including: 

(i) a description of what it manages as capital; 

(ii) when an entity is subject to externally imposed capital requirements, the nature of those requirements and how those requirements are incorporated into the management of capital; and 

(iii) how it is meeting its objectives for managing capital. 

(b) summary quantitative data about what it manages as capital. Some entities regard some financial liabilities (for example, some forms of subordinated debt) as part of capital. Other entities regard capital as excluding some components of equity (for example, components arising from cash flow hedges). 

(c) any changes in (a) and (b) from the preceding reporting period. 

(d) whether during the reporting period it complied with any externally imposed capital requirements to which it is subject. 

(e) when it has not complied with such externally imposed capital requirements, the consequences of such non-compliance.

An entity shall base the note disclosures in paragraph 127 on the information provided internally to key management personnel.

An entity may manage capital in a number of ways and be subject to a number of different capital requirements. For example, a conglomerate may include entities that undertake insurance activities and banking activities and those entities may operate in several jurisdictions. When an aggregate disclosure of capital requirements and how capital is managed would not provide useful information or would distort a financial statement user’s understanding of an entity’s capital resources, the entity shall disclose separate information for each capital requirement to which the entity is subject.

In respect of AusCF entities, an entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is not a reporting entity need not present the disclosures required by paragraphs 126–129.

Notwithstanding paragraph AusCF129.1, in respect of AusCF entities, a not-for-profit entity need not present the disclosures required by paragraphs 126–129.

An entity shall either present in the statement of financial position or the statement of changes in equity or disclose in the notes: 

(a) for each class of share capital: 

(i) the number of shares authorised; 

(ii) the number of shares issued and fully paid, and issued but not fully paid; 

(iii) par value per share, or a statement that the shares have no par value; 

(iv) a reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period; 

(v) the rights, preferences and restrictions attaching to that class, including restrictions on the distribution of dividends and the repayment of capital; 

(vi) shares in the entity held by the entity or by its subsidiaries or associates; and 

(vii) shares reserved for issue under options and contracts for the sale of shares, including terms and amounts; and 

(b) a description of the nature and purpose of each reserve within equity.

An entity without share capital, such as a partnership or trust, shall disclose information equivalent to that required by paragraph 130(a), showing changes during the reporting period in each category of equity interest, and the rights, preferences and restrictions attaching to each category of equity interest.

An entity shall disclose in the notes: 

(a) the amount of dividends proposed or declared before the financial statements were authorised for issue but not recognised as a distribution to owners during the reporting period, and the related amount per share; and 

(b) the amount of any cumulative preference dividends not recognised.