Document ID: chunk:federal_register_of_legislation:F2025C00207:front:0:p15
Version: federal_register_of_legislation:F2025C00207
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Accounting Standards
This appendix is an integral part of the Standard.
B1 An entity shall apply the following exceptions:
(a) derecognition of financial assets and financial liabilities (paragraphs B2 and B3);
(b) hedge accounting (paragraphs B4–B6);
(c) non-controlling interests (paragraph B7);
(d) classification and measurement of financial assets (paragraph B8–B8C);
(e) impairment of financial assets (paragraphs B8D–B8G);
(f) embedded derivatives (paragraph B9);
(g) government loans (paragraphs B10–B12);
(h) insurance contracts (paragraph B13); and
(i) deferred tax related to leases and decommissioning, restoration and similar liabilities (paragraph B14).

Derecognition of financial assets and financial liabilities
B2 Except as permitted by paragraph B3, a first-time adopter shall apply the derecognition requirements in AASB 9 prospectively for transactions occurring on or after the date of transition to Australian Accounting Standards. For example, if a first-time adopter derecognised non-derivative financial assets or non-derivative financial liabilities in accordance with its previous GAAP as a result of a transaction that occurred before the date of transition to Australian Accounting Standards, it shall not recognise those assets and liabilities in accordance with Australian Accounting Standards (unless they qualify for recognition as a result of a later transaction or event).
B3 Despite paragraph B2, an entity may apply the derecognition requirements in AASB 9 retrospectively from a date of the entity's choosing, provided that the information needed to apply AASB 9 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

Hedge accounting
B4 As required by AASB 9, at the date of transition to Australian Accounting Standards an entity shall:
(a) measure all derivatives at fair value; and
(b) eliminate all deferred losses and gains arising on derivatives that were reported in accordance with previous GAAP as if they were assets or liabilities.
B5 An entity shall not reflect in its opening Australian-Accounting-Standards statement of financial position a hedging relationship of a type that does not qualify for hedge accounting in accordance with AASB 9 (for example, many hedging relationships where the hedging instrument is a stand-alone written option or a net written option; or where the hedged item is a net position in a cash flow hedge for another risk than foreign currency risk). However, if an entity designated a net position as a hedged item in accordance with previous GAAP, it may designate as a hedged item in accordance with Australian Accounting Standards an individual item within that net position, or a net position if that meets the requirements in paragraph 6.6.1 of AASB 9, provided that it does so no later than the date of transition to Australian Accounting Standards.
B6 If, before the date of transition to Australian Accounting