AASB approves reduced disclosures for AASB 16 Leases and AASB 1058 Income of Not-for-Profit Entities

To coincide with the 1 January 2019 application date for the new leases standard (AASB 16 Leases), and the new income standard, AASB 1058 Income of Not-for-Profit Entities, the Australian Accounting Standards Board recently issued AASB 2018-3 Amendments to Australian Accounting Standards – Reduced Disclosure Requirements to reduce the required disclosures for entities applying the Reduced Disclosure Regime (RDR).

AASB 16

The amendments clarify that disclosures do not necessarily need to be provided in a tabular format. In addition, the following disclosures from the leases standard are not required for entities applying RDR:

  • Lease liability maturity analysis presented separately from the maturity analysis for other financial liabilities (paragraph 58)
  • Lessee’s extension and termination options (paragraph B50), except that details of the prevalence of options being exercised that were not included in the measurement of lease liabilities must still be disclosed
  • Lessee’s residual value guarantees (paragraph B51), except that details of the nature of underlying assets for which guarantees have been provided must also still be disclosed, and
  • Lessee’s sale and leaseback transactions (paragraph B52).

AASB 1058

The following disclosures regarding income of not-for-profit entities are not required for entities applying RDR:

  • Qualitative information about the entity’s dependence on volunteer services it receives (including those not recognised)
  • Qualitative information about the entity’s dependence on inventories held but not recognised as assets during the reporting period.
  • Explanation of when the entity expects to recognise income from liabilities for unsatisfied performance obligations at the end of the reporting period
  • For obligations settled over time, an explanation of why the methods used provide a faithful depiction of the entity’s progress toward satisfying its obligation, and
  • Information about externally imposed restrictions that limit or direct the purpose for which resources controlled by the entity may be used.
This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such. The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read. The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances.

BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not give any warranty as to the accuracy, reliability or completeness of information contained in this article nor do they accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it, except in so far as any liability under statute cannot be excluded. Read full Disclaimer.