AASB 1 First-time Adoption of Australian Accounting Standards B10-B12: Government loans: classify them under AASB 132 at the transition date and apply AASB 9 and AASB 120 prospectively, so the benefit of a below-market rate before transition is not recognised; an earlier retrospective date is allowed where the information existed at the time

What does B10-B12 require?

Each government loan is classified as a liability or equity under AASB 132 on the facts at the transition date. The measurement and grant accounting rules of AASB 9 and AASB 120 apply prospectively to loans entered into on or after that date, so the previous GAAP carrying amount at transition becomes the opening carrying amount and the benefit of any below-market interest before transition is not recognised. The entity may instead apply AASB 120 and AASB 9 retrospectively to a loan originated before transition if the required information was obtained when the loan was first accounted for. Nothing here prevents the fair value designation elections in Appendix D.