We have been assisting many of our clients with adoption of the new accounting standards including AASB 15 Revenue from Contracts, AASB 1058 Income for Not-for-Profit Entities, AASB 16 Leases and AASB 9 Financial Instruments. With the release of these new standards, our clients now have to recognise their revenue under entire new frameworks, they have brought in Right of Use Assets and Liabilities on the face of the balance sheets, subsequently have had to update their calculations to reflect the impact of COVID-19 and have had to change the way they account for financial instruments in line with AASB 9. The accounting environment is ever-changing and recently even more so.

Some professionals think that if they are working for a manufacturing company or a service company, they don’t have to consider AASB 9. However, most organisations will have some financial instruments in their accounts, for example accounts receivable. Among the various changes introduced by AASB 9, the major one is the new credit loss model that is based on expected losses instead of incurred losses. This change impacts a majority of organisations.

There have also been several implementation issues since the adoption of the new AASB 15 Revenue from Contracts with Customers accounting standard. AASB 15 has different levels of impact on organisations depending on the type of revenue they generate. For example, many of our not-for-profit clients who receive Government Grants now have to determine whether they account for their Grant income under AASB 15 or AASB 1058, the selection of the standard is dependant on the conditions of each Grant. Such determination requires a degree of professional judgement.

These are just some examples of the changes that have been taking place. We are here to help with any implementation or technical queries, we can assist in preparing and updating required calculations and disclosures in line with the new accounting standards. Contact our team if you have any queries in regards to the recent changes to the accounting standards.

This information is current at the time of publication 2/10/2020 and further updates may have occurred since that date.  Please contact us for the latest information.