Accounting November - October 2018

In this edition, we explore further specific aspects of the ‘triple threat’ new accounting standards. This month we look at some complexities for intermediate lessors in accounting for subleases (IFRS 16 Leases), as well as accounting for fair value movements in financial liabilities due to changes in an entity’s own credit risk (IFRS 9 Financial Instruments).

We also continue our series articles - common errors when accounting for investment property, and convertible notes, and explore two recent IFRS Interpretations Committee agenda decisions on capitalisation of borrowing costs (IAS 23 Borrowing Costs).

Lastly, we review local financial reporting developments, including: additional financial reporting requirements for small proprietary companies using crowd funding; reduced disclosures for the new leases standard and AASB 1058 Income of Not-for-Profit Entities; additional implementation guidance for not-for-profit public sector licensors applying AASB 15 and AASB 16; and the removal of duplicative financial reporting for NSW incorporated associations from 1 October 2018.

• IFRS 16 is ‘business as usual for lessors’ but creates complexity for subleasing arrangements
• Accounting for financial liabilities is not substantially impacted by the adoption of IFRS 9 but will need to account for ‘own credit risk’ in OCI for some financial liabilities
• Common errors when accounting for investment property (IAS 40) – Part 2
• Convertible notes – Are you accounting for these correctly? (Part 7)
• Crowd funding available for small proprietary companies but with more financial reporting obligations
• Recent agenda decisions by the IFRS Interpretations Committee on capitalisation of borrowing costs
• AASB approves reduced disclosures for AASB 16 Leases and AASB 1058 Income of Not-for-Profit Entities
• AASB approves Implementation Guidance for Not-for-Profit Public Sector Licensors
• Removal of duplicative financial reporting for NSW associations