Standards On Issue Not For Profit 23 October 2015

Not-for-profit Standards on Issue
Updated as at 23 October 2015

This document outlines all standards issued by the AASB and the IASB which will be applicable for the
first time or available for early adoption by not-for-profit entities for any financial year ending on or
after 30 June 2015. It will assist preparers of financial reports to:
ensure all AASBs and Interpretations that are mandatory have been applied in the correct period
identify and consider AASBs and Interpretations not yet mandatory which may be relevant for early
adoption.
Standards highlighted in green relate to not-for-profit public sector entities only.

AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors requires specific
disclosures when adopting a new or revised AASB or Interpretation results in a change in existing policy
or new policy that is significant. AASB 108 also requires disclosure of the possible impact of relevant
AASBs and Interpretations on issue but not yet adopted. Table 2 serves as a checklist to assist in the
preparation of such disclosures.
The AASBs policy of transaction neutrality means that Australian Accounting Standards relevant to notfor-profit entities are based on standards issued by the International Accounting Standards Board
(IASB), amended by way of Australian paragraphs where necessary.
AASBs and interpretations currently on issue

Table 1: contains all standards and interpretations that must be applied for the first time for years ended
30 June 2015. The standards and interpretations in Table 2 below are available for early adoption for
entities preparing financial statements for this period.
Table 2: includes all standards and interpretations available for early adoption at 30 June 2015. Even if
not electing to early adopt these pronouncements, where the impact is likely to be significant, AASB 108
requires disclosures. Public sector entities wishing to early adopt pronouncements may require special
exemption from state or federal treasuries, and this should be considered at an early stage.
IASB awaiting approval by AASB

Table 3: contains all standards and interpretations issued by the IASB that the AASB has yet to
endorse. In the rare instance that a not-for-profit entity is able to claim compliance with IFRSs, it must
disclose the possible impact of relevant IASBs and IFRIC Interpretations on issue but not yet adopted.
Accordingly, the impact of the IASBs and IFRICs in Table 3 would need to be included in such
disclosures, if relevant. These standards and interpretation cannot be (early) adopted until made by the
AASB.
Further information
Links to the relevant KPMG resources (IFRS News, In the Headlines or Reporting Updates) are
included with each of the standards. In some cases the KPMG resources may not have been released
as yet for all new standards and interpretations included in this edition of Not-for-Profit Standards on
issue. Please refer to the KPMG website for the subsequent release of IFRS News and Reporting
Updates as well as Reporting Updates on other financial reporting issues in Australia.
2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG
International), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Table 1 AASBs and interpretations mandatorily applicable for the first time at 30 June 2015
AASBs and Interpretations
KPMG publication
Key requirements
Transitional Provisions
The items below are mandatory for years beginning on or after 1 January 2014
AASB 10 Consolidated Financial Statements
IFRS Business
combinations
AASB 10 introduces a new approach to

determining which investees should be
consolidated. An investor controls an investee
when the investor is exposed, or has rights, to
variable returns from its involvement with the
investee and has the ability to affect those returns
through its power over the investee.
Retrospective application where

there is a change in the control
conclusion between AASB 127/
Interpretation 112 and AASB 10.
There are specific requirements
when retrospective application is
impracticable.
Early application is only available for
not-for-profit entities to annual
reporting periods beginning on or
after 1 January 2013 but before
1 January 2014, and if AASB 11,
AASB 12, AASB 127 (2011) and
AASB 128 (2011) are applied at the
same time.
AASB 127 Separate Financial Statements

(2011)
AASB 2013-8 Amendments to Australian

Accounting Standards Australian
Implementation Guidance for Not-for-Profit
Entities Control and Structured Entities
AASB 127 (2011) carries forward the existing

accounting and disclosure requirements for
separate financial statements with some minor
clarifications.
Reporting Update
13RU-015
Adds guidance to AASB 10 regarding the criteria

for determining whether one entity controls
another entity from the perspective of not-forprofit entities.
Retrospective application.
General provisions of AASB 108
apply.
AASB 11, AASB 12 & AASB 128
(2011) are applied at the same time.
Retrospective application where
there is a change in the control
conclusion between AASB
127/Interpretation 112 and AASB 10.
2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG publication
Key requirements

Accounting Standards Investment Entities
N/A
apply.
AASB 11 Joint Arrangements
IFRS Business
combinations
Amendments to provide investment entities with

certain exemptions from consolidation
requirements of AASB 10. The exemptions
require investment entities to account for
controlled investees at fair value through profit or
loss, rather than consolidate these investees.
AASB 11 revises accounting requirements for
joint ventures (now referred to as joint
arrangements).
The classification of joint arrangements depends
on whether parties have rights to and obligations
for underlying assets and liabilities rather than the
structure of the arrangement. If the parties have
rights to the underlying assets and liabilities, it is
considered a joint operation and partial
consolidation is applied. If the parties only have
rights to the net assets, it is considered a joint
venture and the parties are required to equity
account for the joint venture. Proportionate
consolidation is not permitted.
Limited amendments have been made to AASB
128 including the application of AASB 5 Noncurrent assets held for sale and discontinued
operations to interests in associates and joint
ventures and how to account for changes in
interests in joint ventures and associates.
AASB 128 Investments in Associates and

Joint Ventures (2011)
Retrospective application with

specific restatement requirements
for certain transition (i.e. moving
from proportionate consolidation to
equity accounting) to simplify the
process.
AASB 12, AASB 127 (2011) & AASB
128 (2011) are applied at the same
time.
Retrospective application
apply.
AASB 11, AASB 12 and AASB 127
(2011) are applied at the same time.

KPMG publication
Key requirements
AASB 12 Disclosures of Interests in Other

Entities
N/A
AASB 12 contains the disclosure requirements for

entities that have interest in subsidiaries, joint
arrangements, associates and/or unconsolidated
structured entities.
Entities are encouraged to provide

information required by AASB 12
before the effective date, but this
would not compel the entity to
formally early adopt AASB 12 or
either AASB 10 or AASB 11.
1 January 2014, and if AASB 10 &
AASB 11 are applied at the same
time.

Accounting Standards arising from the
Consolidation and Joint Arrangements
Standards
N/A
This standard gives effect to many consequential

changes to a number of standards arising from
the issuance of the new consolidation and joint
arrangements standard.
Transitional and early application

provisions vary between individual
standards amended.

Accounting Standards Transition Guidance
and other amendments
N/A
Amendments to AASB 10, AASB 11 and AASB

12 to simplify transition and provide relief from the
disclosures in respect of unconsolidated
structured entities on transition to the suite of
consolidation standards.
Additional amendments to AASB 10 and related
Standards to revise their application paragraphs,
so that they apply mandatorily to not-for-profit
entities for annual reporting periods beginning on
or after 1 January 2014, with early application
permitted for not-for-profit entities only from
1 January 2013.
To be adopted at the same time as

AASB 10, AASB 11 and AASB 12
are adopted.
AASB 2013-7 Amendments to AASB 1038

arising from AASB 10 in relation to
consolidation and interests of policyholders
N/A
Removes the specific requirements regarding

consolidation from AASB 1038, leaving AASB 10
as the sole source of consolidation requirements
applicable to life insurer entities.
To be applied with AASB 10.

KPMG publication
Key requirements

Accounting Standards Conceptual
Framework, Materiality and Financial
Instruments (December 2013) Part B
Materiality
N/A
Guidance on materiality removed from AASB

1031 and cross references inserted to other
standards and the Framework for the Preparation
and Presentation of Financial Statements where
guidance on materiality is located.
Early adoption is not permitted.

Accounting Standards Novation of
Derivatives and Continuation of Hedge
Accounting
In the Headlines
2013/13
Makes amendments to AASB 139 to permit the

continuation of hedge accounting in
circumstances where a derivative, which has
been designated as a hedging instrument, is
novated from one counterparty to a central
counterparty as a consequence of laws or
regulations.
apply.

Recoverable Amount Disclosures for NonFinancial Assets
N/A
Removes requirement to disclose recoverable

amount for CGUs with goodwill / indefinite life
intangibles, and introduces additional disclosures
for fair value less cost to sell.
apply.
Interpretation 21 Levies
In the Headlines
2013/09
Provides clarity that a liability to pay government

imposed levies, other than income taxes, is
deferred until thresholds are exceeded.

Accounting Standards Offsetting Financial
Assets and Financial Liabilities
N/A
Amendments to AASB 132 clarify when an entity

has a legally enforceable right to set-off financial
assets and financial liabilities permitting entities to
present balances net on the balance sheet.
apply.
The items below are mandatory for years beginning on or after 1 July 2014
AASB 1055 Budgetary Reporting
Reporting Update
13RU-006
Extends the requirement to explain variances

from budgets presented to Parliament from
Governments and their General Government
Sector (GGS) to entities within the GGS such as
government departments and statutory
authorities.
Prospective application.

KPMG publication
Key requirements

Relocation of Budgetary Reporting
Requirements
N/A
Relocates all budgetary reporting requirements

applicable to public sector entities to AASB 1055
without substantive amendment.
If adopted early must adopt AASB
1055 at the same time.

Accounting Standards Part A: Annual
Improvements 2010-2012 and 2011-2013
Cycles
The Balancing Items

Issue 6
Amendments to existing accounting standards,

particularly in relation to:
Generally prospective application,

with transitional provisions for AASB
2, AASB 116 and AASB 138 and
AASB 140.
Early adoption of amendments to
individual standards permitted,
subject to certain conditions.
Amendments to AASB 9 apply only
when that Standard is applied or
operative.
2014-1 Amendments to Australian

Accounting Standards Part B: Defined
Benefit Plans: Employee Contributions
(Amendments to AASB 19 Employee
Benefits)
N/A
clarifying share-based payment vesting and

non-vesting conditions,
operating segment asset disclosures,
the meaning of effective IFRSs,
clarification of the scope exception for

measuring the fair value of financial assets
and liabilities on a portfolio basis, and
clarification of the interrelationship between

business combinations and investment
property when classifying property as
investment property or owner-occupied.
clarification of KMP when an entity has a

management entity / responsible entity (such
as a trustee),
exemptions for joint ventures from business
combination requirements,
Employee or third party contributions that met

certain criteria are able (but not required) to be
recognised as a reduction of the service cost in
the period in which the related service is
rendered.

KPMG publication
Key requirements

Accounting Standards Part C: Materiality
N/A
Further to AASB 2013-9 Part B (see above),

amendments are made to particular Australian
Accounting Standards to delete their references
to AASB 1031. This is part of the AASBs
program to delete references to AASB 1031 in all
Australian Accounting Standards prior to final
withdrawal of AASB 1031.
Earlier application is permitted for

annual reporting periods beginning
on or after 1 January 2014 but
before 1 July 2014.

Transition to and between Tiers, and related
Tier 2 Disclosure Requirements
N/A
Amendments to AASB 1053 Application of Tiers

of Australian Accounting Standards to:
clarify that AASB 1053 relates only to general
purpose financial statements;
Generally prospective with earlier

application permitted for annual
after 1 July 2009 but before 1 July
2014.
clarify various options for transition to and

between tiers, and
specify certain disclosure requirements when

an entity resumes the application of Tier 2
reporting requirements.
Table 2 AASBs and interpretations available for early adoption for 30 June 2015 year ends
KPMG publication
Key requirements
Accounting Standards arising from the
Withdrawal of AASB 1031 Materiality
N/A
Completion of AASB project to remove Australian

guidance on materiality from Australian Accounting
Standards with the issue of the final amending
standard to effect the withdrawal of AASB 1031
Materiality. Guidance on materiality located in
AASB 101 Presentation of Financial Statements
going forward.

Accounting Standards Financial Reporting
Requirements for Australian Groups with a
Foreign Parent
N/A
Aligns the relief available in AASB 10 Consolidated

Financial Statements and AASB 128 Investments
in Associates and Joint Ventures in respect of the
financial reporting requirements for Australian
groups with a foreign parent
In the Headlines
AASB 14 Regulatory Deferral Accounts
Interim guidance permitting first-time adopters of
2014/01
IFRS to continue using previous GAAP to account
for regulatory deferral account balances while the
IASB completes its comprehensive project in this
Accounting Standards Part D:
area.
Consequential Amendments arising from
AASB 14 Regulatory Deferral Accounts

Accounting Standards Accounting for
Acquisitions of Interests in Joint Operations
In the Headlines
2014/07
Business combination accounting required to be

applied to acquisitions of interests in a joint
operation that meets the definition of a business
under AASB 3 Business Combinations.
Prospective application

Accounting Standards Clarification of
Acceptable Methods of Depreciation and
Amortisation
In the Headlines
2014/08
Introduces a rebuttable presumption that the use of

revenue-based amortisation methods for intangible
assets is inappropriate. Limited opportunity for
presumption to be overcome.
Clarifies that revenue-based depreciation for
property, plant and equipment cannot be used.
Prospective application

Accounting Standards Agriculture: Bearer
Plants
KPMG publication
In the Headlines
2014/12

Accounting Standards Equity method in
Separate Financial Statements
Accounting Standards Sale or Contribution
of Assets between an Investor and its
Associate or Joint Venture 1
In the Headlines
2014/14

Accounting Standards Annual
Improvements to Australian Accounting
Standards 2012-2014 Cycle
The Balancing
Items Issue 7
In the Headlines
2014/17
Key requirements
Bearer plants are now in the scope of AASB 116
Property, Plant and Equipment for measurement
and disclosure purposes. Therefore, a company
can elect to measure bearer plants at cost.
However, the produce growing on bearer plants will
continue to be measured at fair value less costs to
sell under AASB 141 Agriculture.
Allows the use of the equity method in separate
financial statements in the accounting for
associates, joint ventures and subsidiaries.
The amendments require the full gain or loss to be
recognised when the assets transferred meet the
definition of a business under AASB 3 Business
Combinations (whether housed in a subsidiary or
not).
Amendments to existing accounting standards,
particularly in relation to:
IFRS 5 guidance on changes in method of

disposal,
IFRS 7 clarifies continuing involvement for

servicing contracts,
IFRS 7 clarifies offsetting disclosures are not

specifically required in interim financial
statements, but may be included under the
general requirements of IAS 34,
IAS 19 clarifies that discount rates used

should be in the same currency as the benefits
are to be paid, and
On transition, a company can elect
to use the fair value of bearer plants
as at the beginning of the earliest
comparative reporting period as
deemed cost at that date.
Generally retrospective application

for IFRS 7, IAS 19 and IAS 34.
apply, with some transitional
provisions.
Prospective application for IFRS 5.
Early adoption of amendments to
individual standards permitted.
The IASB has proposed postponing the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. Deferring
the effective date indefinitely in the Australian jurisdiction may have unintended legal consequences given AASBs are legislative instruments. Accordingly, if the IASBs proposals
become a standard, it is expected that the AASB will defer the effective date of the amendments to 1 January 2018.

KPMG publication
Key requirements

Accounting Standards Disclosure Initiative:
Amendments to AASB 101
Making financial
statements more
relevant

Accounting Standards Investment Entities:
Applying the Consolidation Exception
Investment entity
amendments deal
with application
issues
AASB 1057 Application of Australian

Accounting Standards
Reporting Update
15RU-014
IAS 34 clarifies that disclosures may be

incorporated in the interim financial statements
by cross-reference to another part of the
interim financial report.
The amendments do not require any significant
change to current practice, but should facilitate
improved reporting, including an emphasis on only
including material disclosures, clarity on the
aggregation and disaggregation of line items, the
presentation of subtotals, the ordering of notes and
the identification of significant accounting policies.
Under the amendments:
an investment entity parent is required to fair

value a subsidiary providing investment-related
services that is itself an investment entity;
an intermediate parent owned by an investment

entity group is exempt from preparing
consolidated financial statements; and
when a non-investment entity investor applies

the equity method, it is permitted to retain the
fair value accounting applied by its investment
entity associate or joint venture.
The AASB has reissued most of its Standards (and

Interpretations) that incorporate IFRSs to make
editorial changes. The editorial changes will enable
the AASB to issue Australian versions of IFRSs
more efficiently. As part of the reissuance, the
AASB has moved the application paragraphs that
identify the reporting entities and general purpose
financial statements to which the pronouncements
apply to a new Standard, AASB 1057 Application of
Australian Accounting Standards. However, the
technical application requirements have not been
amended.
10

KPMG publication
Key requirements
AASB 1056 Superannuation Entities
Reporting Update
15RU-008
A new Australian specific Standard for

superannuation entities that will replace AAS 25
Financial Reporting by Superannuation Plans for
annual reporting periods beginning on or after
1 July 2016, with early adoption permitted.
The standard applies to the large superannuation
entities regulated by Australian Prudential
Regulation Authority (APRA) and to public sector
superannuation entities. It does not apply to selfmanaged superannuation funds or small APRA
funds.
Prospective application, except that

on initial application superannuation
entities need not present a
statement of financial position as at
the beginning of the earliest
comparative period.

Accounting Standards Extending Related
Party Disclosures to Not-for-Profit Public
Sector Entities
Reporting Update
15RU-003
Extends the scope of AASB 124 Related Party

Disclosures to include not-for-profit public sector
entities.
Comparative disclosures not
required in first year of application.
Reporting Update
15RU-011
Provides relief to not-for-profit public sector entities

from certain disclosures about the fair value
measurement of property, plant and equipment
held for their current service potential rather than to
generate net cash inflows that is categorised within
Level 3 of the fair value hierarchy.
Accounting Standards Fair Value Disclosures of

Not-for-Profit Public Sector Entities
11

KPMG publication
Key requirements
AASB 9 Financial Instruments (December
2014)
Accounting Standards arising from AASB 9
(December 2014)
In the Headlines
2014/13
IFRS - Financial
Instruments

(December 2014) Application of AASB 9
(December 2009) and AASB 9 (December
2010)
AASB 15 Revenue from Contracts with

Customers
Accounting Standards Effective Date of
AASB 15
In the Headlines
2014/09
IFRS - Revenue
The AASB has issued the complete AASB 9. The

new standard includes revised guidance on the
classification and measurement of financial assets,
including a new expected credit loss model for
calculating impairment, and supplements the new
general hedge accounting requirements previously
published. It supersedes AASB 9 (issued in
December 2009 as amended) and AASB 9
(issued in December 2010).
The application of the existing versions of AASB 9
(AASB 9 (December 2009) and AASB 9
(December 2010 including the hedging
amendments made in December 2013)) from 1
February 2015 is limited to entities that have
already early adopted them.
The standard contains a single model that applies
to contracts with customers and two approaches to
recognising revenue: at a point in time or over time.
The model features a contract-based five-step
analysis of transactions to determine whether, how
much and when revenue is recognised.
Retrospective application with some

exemptions. Early adoption is
permitted for financial years
beginning on or after 24 July 2014.
The restatement of prior periods is
not required, and is permitted only if
information is available without the
use of hindsight.
Choice of retrospective application

or as of the application date using
the cumulative effect approach.
Practical expedients are available to
those taking a retrospective
approach.
AASB 15 will apply to contracts of NFP

entities that are exchange transactions.
AASB 1004 Contributions will continue to
apply to non-exchange transactions until the
Income of NFP entities project is completed.
12
Table 3 IASB standards and interpretations awaiting approval by the AASB 2

IFRSs and IFRICs
None at 23 October 2015
Application date
KPMG
publication
Key requirements
Contact Us
If you would like to discuss any of these standards or interpretations further, please contact your KPMG advisor.
These standards and interpretation cannot be (early) adopted until made by the AASB.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of
the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
13

Standards On Issue Not For Profit 23 October 2015

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Not-for-profit Standards on Issue

Updated as at 23 October 2015

Standards highlighted in green relate to not-for-profit public sector entities only.

AASBs and interpretations currently on issue

IASB awaiting approval by AASB

Not-for-profit Standards on Issue

AASB 10 introduces a new approach to

Retrospective application where

AASB 127 Separate Financial Statements

AASB 2013-8 Amendments to Australian

AASB 127 (2011) carries forward the existing

Adds guidance to AASB 10 regarding the criteria

Not-for-profit Standards on Issue

AASB 2013-5 Amendments to Australian

AASB 11 Joint Arrangements

Amendments to provide investment entities with

AASB 128 Investments in Associates and

Retrospective application with

Not-for-profit Standards on Issue

AASB 12 Disclosures of Interests in Other

AASB 12 contains the disclosure requirements for

Entities are encouraged to provide

AASB 2011-7 Amendments to Australian

This standard gives effect to many consequential

Transitional and early application

AASB 2012-10 Amendments to Australian

Amendments to AASB 10, AASB 11 and AASB

To be adopted at the same time as

AASB 2013-7 Amendments to AASB 1038

Removes the specific requirements regarding

Not-for-profit Standards on Issue

AASB 2013-9 Amendments to Australian

Guidance on materiality removed from AASB

Early adoption is not permitted.

AASB 2013-4 Amendments to Australian

Makes amendments to AASB 139 to permit the

AASB 2013-3 Amendments to AASB 136

Removes requirement to disclose recoverable

Provides clarity that a liability to pay government

AASB 2012-3 Amendments to Australian

Amendments to AASB 132 clarify when an entity

Extends the requirement to explain variances

Not-for-profit Standards on Issue

AASB 2013-1 Amendments to AASB 1049

Relocates all budgetary reporting requirements

AASB 2014-1 Amendments to Australian

The Balancing Items

Amendments to existing accounting standards,

Generally prospective application,

2014-1 Amendments to Australian

clarifying share-based payment vesting and

operating segment asset disclosures,

the meaning of effective IFRSs,

clarification of the scope exception for

clarification of the interrelationship between

clarification of KMP when an entity has a

Employee or third party contributions that met

Not-for-profit Standards on Issue

AASB 2014-1 Amendments to Australian

Further to AASB 2013-9 Part B (see above),

Earlier application is permitted for

AASB 2014-2 Amendments to AASB 1053

Amendments to AASB 1053 Application of Tiers