For the 30 June 2024 reporting period, there are significant changes in accounting policy disclosures as part of the Australian Accounting Standards Board (AASB) updates. The updates apply to for-profit and not-for-profit entities who prepare:

• General Purpose Financial Statements
• Tier 2 General Purpose Financial Statements – Simplified Disclosures
• Special Purpose Financial Statements.

These changes primarily involve amendments to how accounting policies are disclosed and provide new guidance on supplier finance arrangements.

Disclosure of accounting policies

Previously, companies were required to disclose ‘significant’ accounting policies. However, the focus will now be on disclosing only ‘material accounting policy information.’

The rationale behind this change is to improve clarity and reduce the diversity in practice due to the previously undefined term ‘significant’. Now, policies are considered material if their omission or misstatement could influence the decisions of users of the financial statements.

This change aims to ensure that disclosed accounting policies are directly relevant to the entity’s transactions and conditions, providing insights into the judgments made in their selection and application. It emphasises entity-specific information over standardised details unless such information is crucial for understanding the financial statements.

This update is part of Australia’s ongoing efforts to align its accounting standards more closely with International Financial Reporting Standards (IFRS), enhancing transparency and comparability in financial reporting.

Entities affected by this change should carefully consider the impact on their financial statements and prepare for these new disclosure requirements, which are applicable for annual periods beginning on or after 1 January 2023.

Early application of these amendments is permitted, offering flexibility for entities ready to adopt these changes ahead of the mandatory implementation date.

For more detailed guidance on these amendments and their implications, please contact us.