AASB 2023-5 Amendments to Australian Accounting Standards – Lack of Exchangeability

Thursday, October 12, 2023

The AASB has issued AASB 2023-5 to amend AASB 121 The Effects of Changes in Foreign Exchange Rates to change the accounting requirements and to add new disclosures relating to non-exchangeable currencies affecting an entity’s financial statements.

This Standard amends AASB 121 and AASB 1 First-time Adoption of Australian Accounting Standards to improve the usefulness of information provided to users of financial statements. The amendments require entities to apply a consistent approach to determining whether a currency is exchangeable into another currency and the spot exchange rate to use when it is not exchangeable.

The Standard also amends AASB 121 to extend the exemption from complying with the disclosure requirements of AASB 121 for entities that apply AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-For-Profit Tier 2 Entities to ensure Tier 2 entities are not required to comply with the new disclosure requirements in AASB 121 when preparing their Tier 2 financial statements.

AASB 2023-5 applies to annual periods beginning on or after 1 January 2025. Earlier application is permitted for annual periods beginning before 1 January 2025.

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