EY In Balance – Issue 2/2022
Welcome to EY in Balance, providing you with the latest insights in financial reporting.
As we get closer to applying the new insurance standard (AASB 17) for the first time, there will be an increasing focus from regulators and investors on understanding the expected impacts to be disclosed in the next financial reports. Our “Insurance Accounting Alert” provides an overview. The AASB proposes that public sector entities can apply AASB 17 on or after 1 July 2025.
The AASB also proposes to allow private sector Not-for-Profit (NFP) entities to continue to measure concessionary leases at cost, and to change a few illustrative examples on accounting for upfront fees and recognition of a financial liability.
We have released a publication summarising proposed disclosures for supplier finance arrangements.
The team
Featured
Disclosing the expected impacts of applying AASB 17/AASB 9 by insurers
Most insurers will apply AASB 17 and AASB 9 for the first time from 1 January 2023. Regulators and investors are focusing on expected impacts. Insurers should disclose what they know and what they could reasonably estimate in advance of its application. Our publication provides a summary of considerations.
AASB proposal - Private sector NFPs can measure concessionary leases at cost
The AASB proposes to allow private sector NFPs to measure concessionary leases at cost on an ongoing basis. The proposal also includes changes to illustrative examples on accounting for upfront fees and recognition of a financial liability.
Proposed disclosures for supplier finance arrangements
Proposed disclosures seek to enhance the transparency of supplier finance arrangements and their effects on liabilities and cash flows. Our publication provides an overview. The IASB released two webcasts to discuss this proposal.
Extractive Activities - project update
The IASB made several tentative decisions about the Extractive Activities project, which include exploring to improve IFRS 6 and remove its temporary status. “Extractive Activities - project update” discusses these decisions.
Accounting for trees held to generate carbon offsets, and carbon capture projects
Many entities are investing in trees to offset their carbon emissions (a carbon sink) or to generate carbon offsets for sale. Our publication discusses the accounting considerations. We also released a publication of accounting considerations for Carbon Capture and Storage (CCS) projects.
Public sector modifications to AASB 17 - ED 319
Once ED 319 is finalised, public sector entities can defer application of AASB 17 to 1 July 2025. It also introduces several public sector changes in areas such as sub-grouping, initial recognition, coverage period, scoping and the cash flows within the contract boundary.
