23 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS New Accounting Standards and Interpretations effective from 1 July 2023 and are applicable for the Group: AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates – Effective 1 January 2023 In October 2018, the IASB issued amendments to AASB 101 Presentation of Financial Statements and AASB 8 Accounting Policies, Changes in Accounting Estimates and Errors to align the definition of ‘material’ across the standards and to clarify certain aspects of the definition. The new definition states that, ’Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting Group’. The Board has issued amendments to AASB 101 Presentation of Financial Statements and an update to IFRS Practice Statement 2 Making Materiality Judgements to help companies provide useful accounting policy disclosures. The key amendments to AASB 101 include: • requiring companies to disclose their material accounting policies rather than their significant accounting policies; • clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and • clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company’s financial statements. The Board also amended IFRS Practice Statement 2 to include guidance and two additional examples on the application of materiality to accounting policy disclosures. The amendments are consistent with the refined definition of material. The Group has applied the amendments in terms of AASB 101 and IFRS Practice Statement 2. The amendments did not have a material impact on the Group. AASB 17 Insurance Contracts (new standard and amendments) Effective date 1 January 2023. In May 2017, the IASB issued AASB 17 Insurance Contracts (AASB 17), a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, AASB 17 will replace AASB 4 Insurance Contracts (AASB 4) that was issued in 2005. AASB 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply. The overall objective of AASB 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in AASB 4, which are largely based on grandfathering previous local accounting policies, AASB 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of AASB 17 is the general model, supplemented by: • A specific adaptation for contracts with direct participation features (the variable fee approach) • A simplified approach (the premium allocation approach) mainly for short-duration contracts AASB 17 is effective for reporting periods beginning on or after 1 January 2023, with comparative figures required. Early application is permitted, provided the Group also applies AASB 9 and AASB 15 on or before the date it first applies AASB 17. A number of amendments were made to the following aspects of AASB 17: • Scope of AASB 17 • Measuring the contractual service margin(CSM) • Transition to AASB 17 • Accounting for direct participating contracts • Accounting for reinsurance contracts held • Presentation and disclosure requirements Management has performed an assessment of the impact of the standard on its consolidated financial statements. The new AASB 17 standard did not have a material impact on the Group’s consolidated financial statements. Management continues to assess potential changes to AASB 17. AASB 8 Definition of an accounting estimate (amendments) Effective 1 January 2023 Clarifications regarding accounting estimates rather than accounting policies in order to reduce the diversity in practice. The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. Developing an accounting estimate includes both: • selecting a measurement technique (estimation or valuation technique) – e.g., an estimation technique used to measure a loss allowance for expected credit losses when applying AASB 9 Financial Instruments; and • choosing the inputs to be used when applying the chosen measurement technique – e.g., the expected cash outflows for determining a provision for warranty obligations when applying AASB 37 Provisions, Contingent Liabilities and Contingent Assets. The effects of changes in such inputs or measurement techniques are changes in accounting estimates. The amendments to AASB 8 did not have a material impact on the Group. AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Effective 1 January 2023. The amendments narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences arising on initial recognition of a lease and a decommissioning provision. The amendments to AASB2021-5 did not have a material impact on the Group.
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