15-30 – Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities
What’s new or changing
- The Australian Accounting Standards Board has issued an amending standard (AASB 2015-7) changing the levels of disclosure councils need to make in relation to the fair value for particular assets.
What this will mean for your council
- Councils may adopt the standard for the reporting period ending 30 June 2015.
- AASB 2015-7 provides relief from the following disclosures in AASB 13 Fair Value Measurement for level 3 assets within the scope of AASB 116 Property, Plant and Equipment for which the future economic benefits are not primarily dependent on the asset’s ability to generate net cash inflows:
- Quantitative information about the significant unobservable inputs used in the fair value measurement (AASB 13 para 93d – part)
- For recurring fair value measurements categorised in level 3, the amount of the total gains or losses for the period included in profit or loss that is attributable to the change in unrealised gains or losses (AASB 13 paragraph 93f)
- For recurring fair value measurements categorised in level 3, a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement (AASB 13 paragraph 93h(i))
- These changes were announced by the AASB on 13 July 2015, and as a result were not reflected in the Local Government Code of Accounting Practice and Financial Reporting – Update 23 released on 25 June 2015. Despite this the Office of Local Government is providing councils the option to adopt the standard for the reporting period 30 June 2015 and to disclose in Note 1 if they have taken this option.
Where to go for further information
- Councils wanting to early adopt are advised to review the recently published standard – AASB 2015-7 and the relevant paragraphs in AASB13 available on the AASB website.