AASB 1 First-time Adoption of Australian Accounting Standards
The Australian adoption of IFRS 1: the rules an entity follows when it first adopts Australian Accounting Standards, from the opening statement of financial position and the consistent policies behind it, through the mandatory exceptions to retrospective application and the optional exemptions in Appendices C to E, to the reconciliations and disclosures that explain the transition, including the Australian paragraphs for not-for-profit public sector entities and Tier 2 Simplified Disclosures entities.
AASB 1 First-time Adoption of Australian Accounting Standards is a compliance framework from Australia (Commonwealth) with 6 domains and 44 controls. The largest domains are Optional exemptions from other Standards (paragraphs 18 and 19, Appendices C, D and E) – AASB 1 First-time Adoption of Australian Accounting Standards (21 controls), Mandatory exceptions to retrospective application (paragraphs 13 to 17 and Appendix B) – AASB 1 First-time Adoption of Australian Accounting Standards (10 controls), Presentation and disclosure of the transition (paragraphs 20 to 33) – AASB 1 First-time Adoption of Australian Accounting Standards (6 controls). Every control below carries what it requires and what an assessor expects to see.
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Framework Domains (6)
Effective date, commencement, withdrawal and the Tier 2 carve-out (paragraphs 34 to Aus40.2, Appendix A, Appendix F) – AASB 1 First-time Adoption of Australian Accounting Standards
| Code | Title |
|---|---|
| aasb-1-first-time-adoption-of-australian-accounting-standards::AusF1 | Tier 2 entities applying Simplified Disclosures do not apply the public sector deficiency paragraph or the presentation and disclosure paragraphs 20 to 33, and prepare but need not present the opening statement of financial position |
Mandatory exceptions to retrospective application (paragraphs 13 to 17 and Appendix B) – AASB 1 First-time Adoption of Australian Accounting Standards
| Code | Title |
|---|---|
| aasb-1-first-time-adoption-of-australian-accounting-standards::14-17 | Keep estimates at the transition date (and at the end of each comparative period) consistent with the previous GAAP estimates for that date unless they were objectively wrong, and treat later information as a non-adjusting event |
| 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 |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B13 | Insurance contracts: apply the AASB 17 transition provisions in paragraphs C1 to C24 and C28 to contracts within its scope |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B14 | Deferred tax on leases and decommissioning: despite the AASB 112 initial recognition exemption, recognise deferred tax at the transition date for right-of-use assets, lease liabilities, decommissioning liabilities and the related asset components, with the cumulative effect in equity |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B2-B3 | Derecognition of financial assets and liabilities: apply the AASB 9 rules prospectively from the transition date, with an option to apply them from an earlier chosen date if the needed information was captured at the time |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B4-B6 | Hedge accounting at transition: carry derivatives at fair value, remove deferred hedging gains and losses, reflect only relationships that qualify under AASB 9, and apply hedge accounting prospectively |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B7 | Non-controlling interests: apply the AASB 10 rules on attributing comprehensive income, ownership changes without loss of control, and loss of control prospectively from the transition date |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B8-B8C | Classify financial assets on the facts at the transition date, with impracticability reliefs for the modified time value test, insignificant prepayment features and the effective interest method |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B8D-B8G | Apply the AASB 9 impairment rules retrospectively using information available without undue cost or effort at the transition date; where the initial credit risk cannot be reconstructed, recognise lifetime losses until derecognition |
| aasb-1-first-time-adoption-of-australian-accounting-standards::B9 | Assess whether an embedded derivative must be separated on the conditions at the later of contract inception and the last reassessment date |
Objective, scope and who counts as a first-time adopter (paragraphs 1 to 5, Aus3.2, 4A and 4B) – AASB 1 First-time Adoption of Australian Accounting Standards
| Code | Title |
|---|---|
| aasb-1-first-time-adoption-of-australian-accounting-standards::2-5,4A-4B | Decide whether the entity is a first-time adopter and apply the Standard to its first annual statements under Australian Accounting Standards and to the interim reports inside that period; an entity that once applied the Standards and lapsed chooses between this Standard and full retrospective application |
| aasb-1-first-time-adoption-of-australian-accounting-standards::Aus3.2 | Not-for-profit public sector entity with information deficiencies: treated as a first-time adopter if it explains the gaps, its plan to close them and the Standards not met, and states compliance with the rest |
Optional exemptions from other Standards (paragraphs 18 and 19, Appendices C, D and E) – AASB 1 First-time Adoption of Australian Accounting Standards
| Code | Title |
|---|---|
| aasb-1-first-time-adoption-of-australian-accounting-standards::18-19,C1,D1,E | Elective exemptions: choose any of the Appendix C, D and E exemptions, document each election and never extend an exemption by analogy to other items |
| aasb-1-first-time-adoption-of-australian-accounting-standards::AusD7.1,D8A-D8B | Sector reliefs on deemed cost: a not-for-profit lessee may carry below-market leases' right-of-use assets at fair value or a previous valuation; oil and gas assets in development or production may be allocated from previous GAAP cost centres; rate-regulated assets may keep previous GAAP carrying amounts |
| aasb-1-first-time-adoption-of-australian-accounting-standards::C1-C3 | Past business combinations: keep them unrestated or, if any is restated to AASB 3, restate every later one and apply AASB 10 from the same date; AASB 121 need not be applied retrospectively to pre-transition goodwill and fair value adjustments |
| aasb-1-first-time-adoption-of-australian-accounting-standards::C4-C5 | Consequences of not restating a past combination: keep its classification, recognise all qualifying assets and liabilities at previous GAAP amounts as deemed cost, exclude non-qualifying items, adjust goodwill only for specified items, test goodwill for impairment at transition and consolidate previously unconsolidated subsidiaries |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D12-D13A | Cumulative translation differences: may be reset to zero at the transition date, so that later disposal gains exclude pre-transition differences; a subsidiary using the parent's amounts may use the parent's translation differences |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D14-D15A | Investments in subsidiaries, joint ventures and associates in separate statements: measure each at cost, at fair value at the transition date as deemed cost, or at the previous GAAP carrying amount as deemed cost, with the same options under the equity method |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D16-D17 | Group timing differences: a subsidiary adopting later than its parent may use the parent's consolidated carrying amounts or its own AASB 1 figures; a parent adopting later than a subsidiary, associate or joint venture uses the investee's own compliant amounts |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D18 | Compound financial instruments: need not separate the liability and equity components where the liability component is no longer outstanding at the transition date |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D19-D19C | Designate financial instruments at the transition date: any financial liability or financial asset meeting the AASB 9 criteria at fair value through profit or loss, equity instruments at fair value through other comprehensive income, and decide the own credit risk presentation on the facts at that date |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D2-D3 | Share-based payment: AASB 2 is encouraged but not required for equity instruments granted on or before 7 November 2002 or vested before the later of the transition date and 1 January 2005, and for liabilities settled before those dates; where applied, the fair value must have been disclosed publicly at the time |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D20 | Fair value at initial recognition: the day-one gain deferral rule may be applied prospectively to transactions on or after the transition date |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D21-D21A | Decommissioning liabilities in the cost of property, plant and equipment: instead of applying Interpretation 1 to pre-transition changes, measure the liability at the transition date under AASB 137, discount it back to the obligation date to find the amount in the asset's cost, and compute the depreciation to date; oil and gas assets under the allocation relief measure the liability at transition with the difference to equity |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D22,D25,D32,D36 | Interpretations' transitional provisions available to a first-time adopter: service concession arrangements, extinguishing liabilities with equity instruments, surface mine stripping costs and foreign currency advance consideration |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D23 | Borrowing costs: apply AASB 123 from the transition date or from an earlier chosen date; costs capitalised under the previous GAAP before that date are kept |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D26-D30 | Severe hyperinflation: determine whether the functional currency was subject to it, and if so measure assets and liabilities at fair value as deemed cost in the opening position at or after the normalisation date, with explanatory disclosure |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D31 | Joint arrangements: apply the AASB 11 transition provisions at the transition date, and on moving from proportionate consolidation to the equity method test the investment for impairment at that date, treating any impairment as a retained earnings adjustment |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D33 | Own-use contracts: a contract to buy or sell a non-financial item that exists at the transition date may be designated at fair value through profit or loss on the facts at that date, under the AASB 9 accounting mismatch condition |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D34-D35 | Revenue: the AASB 15 modified transition reliefs may be used with the date of initial application read as the start of the first reporting period, and contracts completed before the earliest period presented need not be restated |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D5-D8 | Deemed cost: at the transition date an item of property, plant and equipment, investment property under the cost model, a right-of-use asset or a qualifying intangible asset may be carried at fair value, at a previous GAAP revaluation that broadly matched fair value or indexed cost, or at an event-driven previous GAAP fair value |
| aasb-1-first-time-adoption-of-australian-accounting-standards::D9-D9E | Leases: decide whether a pre-transition contract contains a lease on the facts at the transition date; a lessee may measure each lease liability at the present value of remaining payments at its incremental borrowing rate and the right-of-use asset either as if AASB 16 had always applied or equal to the liability, using the listed practical expedients |
| aasb-1-first-time-adoption-of-australian-accounting-standards::E1-E2,E8 | Short-term exemptions: comparatives need not comply with AASB 7 and AASB 9 for first periods beginning before 1 January 2019, with the previous GAAP basis disclosed and the catch-up adjustment in opening equity; a transition date before 1 July 2017 allows Interpretation 23 to be left out of comparatives |
Presentation and disclosure of the transition (paragraphs 20 to 33) – AASB 1 First-time Adoption of Australian Accounting Standards
| Code | Title |
|---|---|
| aasb-1-first-time-adoption-of-australian-accounting-standards::20-22 | No relief from presentation and disclosure rules: present at least three statements of financial position and two of each other statement with comparatives, and label and explain any previous GAAP comparatives or historical summaries |
| aasb-1-first-time-adoption-of-australian-accounting-standards::23-23B,27-28 | Explain how the transition affected financial position, performance and cash flows; a returning adopter explains why it stopped and why it resumed; AASB 108 change-in-policy rules do not apply; disclose if no prior statements were presented |
| aasb-1-first-time-adoption-of-australian-accounting-standards::24-26,27A | Reconcile previous GAAP equity to equity under the Standards at the transition date and at the latest previous GAAP year end, reconcile total comprehensive income for the latest previous GAAP period, separate error corrections from policy changes, and update the reconciliations if policies or exemptions change during the first period |
| aasb-1-first-time-adoption-of-australian-accounting-standards::29-29A | Disclose the fair value, previous classification and previous carrying amount of financial assets and liabilities designated at fair value through profit or loss at the transition date |
| aasb-1-first-time-adoption-of-australian-accounting-standards::30-31C | Deemed cost disclosures: aggregate fair values and the adjustment to previous GAAP amounts for each line item measured at deemed cost, the deemed cost of investments in separate statements, and the facts and bases behind the oil and gas, rate regulation and severe hyperinflation elections |
| aasb-1-first-time-adoption-of-australian-accounting-standards::32-33 | Interim reports in the first period: reconcile equity and total comprehensive income for the comparable prior interim period and for the latest previous GAAP year end, explain the transition, and provide the information needed to understand the interim period |
The opening statement of financial position and the accounting policies behind it (paragraphs 6 to 12 and Aus12.1) – AASB 1 First-time Adoption of Australian Accounting Standards
| Code | Title |
|---|---|
| aasb-1-first-time-adoption-of-australian-accounting-standards::10-11 | In the opening statement of financial position recognise, derecognise, reclassify and measure every item as the Standards require, and take the resulting adjustments straight to retained earnings or another equity category |
| aasb-1-first-time-adoption-of-australian-accounting-standards::6 | Prepare and present an opening statement of financial position at the date of transition as the starting point for accounting under the Standards |
| aasb-1-first-time-adoption-of-australian-accounting-standards::7-9 | Use one set of accounting policies, compliant with every Standard in force at the end of the first reporting period, across the opening position and all periods presented; earlier versions of Standards and the transitional rules of other Standards do not apply |
| aasb-1-first-time-adoption-of-australian-accounting-standards::Aus12.1 | Tier 2 entities that applied AASB 1060 early may use the AASB 1053 Appendix E relief from restating comparatives, reading the transition date as the start of the first reporting period |
What is AASB 1 First-time Adoption of Australian Accounting Standards and who does it apply to?
AASB 1 First-time Adoption of Australian Accounting Standards is a compliance framework from Australia (Commonwealth) with 6 domains and 44 controls. The Australian adoption of IFRS 1: the rules an entity follows when it first adopts Australian Accounting Standards, from the opening statement of financial position and the consistent policies behind it, through the mandatory exceptions to retrospective application and the optional exemptions in Appendices C to E, to the reconciliations and disclosures that explain the transition, including the Australian paragraphs for not-for-profit public sector entities and Tier 2 Simplified Disclosures entities. It is used by organisations to establish and maintain compliance with industry standards and regulatory requirements.
What does AASB 1 First-time Adoption of Australian Accounting Standards actually require?
AASB 1 First-time Adoption of Australian Accounting Standards has 44 controls organised across 6 domains. The largest domains are Optional exemptions from other Standards (paragraphs 18 and 19, Appendices C, D and E) – AASB 1 First-time Adoption of Australian Accounting Standards (21 controls), Mandatory exceptions to retrospective application (paragraphs 13 to 17 and Appendix B) – AASB 1 First-time Adoption of Australian Accounting Standards (10 controls), Presentation and disclosure of the transition (paragraphs 20 to 33) – AASB 1 First-time Adoption of Australian Accounting Standards (6 controls). Each control defines specific requirements that organisations must implement to achieve compliance.
If I already comply with another framework, how much of AASB 1 First-time Adoption of Australian Accounting Standards do I already cover?
AASB 1 First-time Adoption of Australian Accounting Standards does not currently have cross-framework mappings in our system. Check back as we continuously expand our mapping database.
How do I implement AASB 1 First-time Adoption of Australian Accounting Standards?
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