Document ID: chunk:federal_register_of_legislation:F2023C00399:body:0:p69
Version: federal_register_of_legislation:F2023C00399
Segment Type: other
Provision Reference: 
Character Range: 182482–185417

Incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability (see paragraph B5.4.8). An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument.

The following terms are defined in paragraph 11 of AASB 132, Appendix A of AASB 7, Appendix A of AASB 13 or Appendix A of AASB 15 and are used in this Standard with the meanings specified in AASB 132, AASB 7, AASB 13 or AASB 15:

     (a) credit risk;[4]
     (b) equity instrument;
     (c) fair value;
     (d) financial asset;
     (e) financial instrument;
     (f) financial liability;
     (g) transaction price.

Appendix B
Application guidance
This appendix is an integral part of AASB 9.

Scope (Chapter 2)
B2.1 Some contracts require a payment based on climatic, geological or other physical variables. (Those based on climatic variables are sometimes referred to as 'weather derivatives'.) If those contracts are not within the scope of AASB 17 Insurance Contracts, they are within the scope of this Standard.
          AusB2.1.1 Notwithstanding paragraph B2.1, for public sector entities applying AASB 4 Insurance Contracts, contracts that require a payment based on climatic, geological or other physical variables and are not within the scope of AASB 4 or AASB 1023 General Insurance Contracts are within the scope of this Standard.
B2.2 This Standard does not change the requirements relating to employee benefit plans that comply with AASB 1056 Superannuation Entities and royalty agreements based on the volume of sales or service revenues that are accounted for under AASB 15 Revenue from Contracts with Customers.
B2.3 Sometimes, an entity makes what it views as a 'strategic investment' in equity instruments issued by another entity, with the intention of establishing or maintaining a long-term operating relationship with the entity in which the investment is made. The investor or joint venturer entity uses AASB 128 Investments in Associates and Joint Ventures to determine whether the equity method of accounting shall be applied to such an investment.
B2.4 This Standard applies to the financial assets and financial liabilities of insurers, other than rights and obligations that paragraph 2.1(e) excludes because they arise under contracts within the scope of AASB 17.
          AusB2.4.1 Notwithstanding paragraph B2.4, for public sector entities applying AASB 4, this Standard applies to the financial assets and financial liabilities of a public sector insurer, other than rights and obligations that paragraph Aus2.1.2 excludes because they arise under contracts within the scope of AASB 4.
B2.5 Financial guarantee contracts may have various legal forms, such as a guarantee, some types of letter of credit, a credit default contract or an insurance contract. Their accounting treatment does not depend