Document ID: chunk:federal_register_of_legislation:F2023L00014:body:0:p8
Version: federal_register_of_legislation:F2023L00014
Segment Type: other
Provision Reference: 
Character Range: 19607–22516

2015)

Paragraphs Aus4.1, Aus4.2 and AusAG8.1 are added. Paragraphs 4 and AG8 are not amended but are included for reference.

Scope
4 This Standard shall be applied by all entities to all types of financial instruments except:
(a) …
(d) insurance contracts as defined in AASB 17 Insurance Contracts or investment contracts with discretionary participation features within the scope of AASB 17. However, this Standard applies to: …
(e) [deleted]
(f) …
          Aus4.1 Further to paragraph 4, public sector entities shall apply AASB 4 Insurance Contracts to insurance contracts as defined in AASB 4. However, this Standard applies to:
               (a) derivatives that are embedded in insurance contracts within the scope of AASB 4, if AASB 9 requires the entity to account for them separately; and
               (b) financial guarantee contracts if an issuer applies AASB 9 in recognising and measuring the contracts, but AASB 4 shall apply if an issuer elects, in accordance with paragraph 4(d) of AASB 4, to apply AASB 4 in recognising and measuring them.
          Aus4.2 Public sector entities apply AASB 4 to financial instruments that are within the scope of AASB 4 because they contain a discretionary participation feature. The issuer of these instruments is exempt from applying to these features paragraphs 15–32 and AG25–AG35 of this Standard regarding the distinction between financial liabilities and equity instruments. However, these instruments are subject to all other requirements of this Standard. Furthermore, this Standard applies to derivatives that are embedded in these instruments (see AASB 9).

…

Financial assets and financial liabilities
 …
AG8 The ability to exercise a contractual right or the requirement to satisfy a contractual obligation may be absolute, or it may be contingent on the occurrence of a future event. For example, a financial guarantee is a contractual right of the lender to receive cash from the guarantor, and a corresponding contractual obligation of the guarantor to pay the lender, if the borrower defaults. The contractual right and obligation exist because of a past transaction or event (assumption of the guarantee), even though the lender's ability to exercise its right and the requirement for the guarantor to perform under its obligation are both contingent on a future act of default by the borrower. A contingent right and obligation meet the definition of a financial asset and a financial liability, even though such assets and liabilities are not always recognised in the financial statements. Some of these contingent rights and obligations may be contracts within the scope of AASB 17.
          AusAG8.1 For public sector entities, some of the contingent rights and obligations addressed in paragraph AG8 may be insurance contracts within the scope of AASB 4.

Amendments to AASB 136 Impairment of Assets (August 2015)

Paragraph