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
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