FocusOn - AASB 101: Presentation of Financial Statements
Australian Government current policies
It is a current policy of the Australian Government to continue to adopt the Standards of the International Accounting Standards Board for application into the Australian environment. In following this policy, the Australian Accounting Standards Board has reissued AASB 101: Presentation of Financial Statements.
This FocusOn newsletter will discuss and highlight the major differences between this new reissued standard and the old standard.
Application date
AASB 101: Presentation of Financial Statements is applicable for periods beginning on or after 1 January 2009. This means it is applicable for the year ended 31 December 2009.
Comprehensive income
The standard introduces a new term comprehensive income. This is defined as the change in equity during the period other than those changes resulting from transactions with owners in their capacity as owners.
Statement of comprehensive income
The standard now requires this income to be disclosed in either one statement (a statement of comprehensive income) or in two statements (a separate income statement and a statement of comprehensive income).
Some of the transactions that were previously in the statement of changes in equity such as revaluation of land and buildings and movements in the asset realisation reserve will now be disclosed in the statement of comprehensive income. Other items such as transfers to and from reserves will still remain in the statement of changes in equity.
Complete set of financial statements
This standard introduces the concept of the “complete set of financial statements”. It defines a financial statement as:
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A statement of financial position as at the end of the period; |
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A statement of comprehensive income for the period; |
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A statement of changes in equity for the period; |
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Notes, comprising a summary of significant accounting policies and other explanatory notes. |
Other changes
The titles of the “balance sheet” and “cash flow statement” have now changed to “statement of financial position” and “statement of cash flows” respectively.
The new standard requires an entity to disclose income tax relating to each component of other comprehensive income. Previously, this was not a requirement.
Dividends and related per-share amounts are now to be disclosed either on the face of the statement of changes in equity or in the notes. They can no longer be disclosed on the face of the statement of comprehensive income or income statement as previously permitted.
Revisions made to AASB 108 also require comprehensive restatement of financial reports where a change to accounting policy that impacts on comparative information is made.
Where accounting policies change or a material prior year error is restated the entity must prepare a complete set of financial statements including notes with four columns of disclosure:
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Current period disclosure |
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Prior year restated disclosure |
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Adjustment required to restate comparatives |
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Prior year original comparatives. |
Assistance
We encourage you to become familiar with the broad requirements of the above standards. We can advise you on any queries you may have.
Published : 10 March 2010