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(b) New accounting standards
and interpretations
Certain new accounting standards and
interpretations have been published that
are not mandatory for 30 June 2017 reporting
periods and have not been early adopted
by the Group. The Group’s assessment
of the impact of these new standards
and interpretations which may be relevant
to the Group are set out below.
(i) AASB 9 Financial Instruments
AASB 9 introduces new requirements for
the classification and measurement of financial
assets and liabilities and includes a forward-
looking ‘expected loss’ impairment model and
a substantially changed approach to hedge
accounting. AASB 9 is effective for annual
reporting periods beginning on or after
1 January 2018 but will require retrospective
adjustments for the 2017/18 comparative
disclosures. The Group does not currently
intend to early adopt but could early adopt
in 2017/18 if certain hedging requirements
were identified.
The Group has undertaken an initial
assessment of the impact of AASB9. It is
expected there will be minimal financial impact
from the changes in hedge accounting as
a result of non-complex hedging business
requirements and straight forward underlying
arrangements. Hedging documentation and
disclosure requirements following adoption
will significantly increase. As a result of the
Group’s low historical and forecast credit
losses the adoption of the expected credit
loss methodology is envisaged to have
an insignificant financial impact, although
resulting in addition disclosure requirements.
(ii) AASB 15 Revenue from Contracts
with Customers
AASB 15 replaces AASB 118 Revenue, AASB
111 Construction Contracts and some revenue-
related Interpretations. AASB 15 establishes
a new revenue recognition model, changes
the basis for deciding whether revenue is to
be recognised over time or at a point in time,
provides new and more detailed guidance on
specific topics and expands and improves
disclosures about revenue. AASB15 is effective
for annual reporting periods beginning on
or after 1 January 2018 but will require
retrospective adjustments for the 2017/18
comparative disclosures. The Group does
not currently intend to early adopt.
The Group has undertaken a high level analysis
and is in the process of detailed contract
reviews. The high level analysis indicated that
all of the Group revenue streams were at low
risk of change with potentially some impact
from timing of recognition changes. Detailed
contract reviews have been undertaken
by revenue stream and focused on access
revenue as the area with the potential for
the largest financial impact. Analysis is not yet
final however there are strong indications that
the financial impact of the changes will not be
significant to the Group and that some timing
of revenue recognition is the key change.
Disclosure requirements have not been
fully reviewed however they are expected
to increase.
(iii) AASB 16 Leases
AASB 16 replaces AASB 117 Leases and some
lease-related Interpretations. AASB 16 requires
all leases to be accounted for on balance sheet
by lessees with minor exceptions, provides
new guidance on the application of the
definition of lease and on sale and lease back
agreements, largely retains the existing lessor
accounting requirements and requires new
and different disclosures about leases. AASB
16 is effective for annual reporting periods
beginning on or after 1 January 2019 but may
require retrospective adjustments for the
2018/19 comparative disclosures.
AASB 16 is a new standard that introduces a
single lessee accounting model and requires a
lessee to recognise assets and liabilities for all
leases with a term of more than 12 months,
unless the underlying asset is of low value.
Early adoption of this standard is permitted
only if the Group has adopted AASB 15
Revenue from Contracts with Customers.
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NOTE 20
OTHER ACCOUNTING POLICIES (CONTINUED)