Document ID: chunk:federal_register_of_legislation:F2025C00207:front:0:p20
Version: federal_register_of_legislation:F2025C00207
Segment Type: other
Provision Reference: 
Character Range: 55643–58666

combinations that occurred before the date of transition to Australian Accounting Standards. If the entity does not apply AASB 121 retrospectively to those fair value adjustments and goodwill, it shall treat them as assets and liabilities of the entity rather than as assets and liabilities of the acquiree. Therefore, those goodwill and fair value adjustments either are already expressed in the entity's functional currency or are non-monetary foreign currency items, which are reported using the exchange rate applied in accordance with previous GAAP.
C3 An entity may apply AASB 121 retrospectively to fair value adjustments and goodwill arising in either:
(a) all business combinations that occurred before the date of transition to Australian Accounting Standards; or
(b) all business combinations that the entity elects to restate to comply with AASB 3, as permitted by paragraph C1 above.
C4 If a first-time adopter does not apply AASB 3 retrospectively to a past business combination, this has the following consequences for that business combination:
(a) The first-time adopter shall keep the same classification (as an acquisition by the legal acquirer, a reverse acquisition by the legal acquiree, or a uniting of interests) as in its previous GAAP financial statements.
(b) The first-time adopter shall recognise all its assets and liabilities at the date of transition to Australian Accounting Standards that were acquired or assumed in a past business combination, other than:
(i) some financial assets and financial liabilities derecognised in accordance with previous GAAP (see paragraph B2); and
(ii) assets, including goodwill, and liabilities that were not recognised in the acquirer's consolidated statement of financial position in accordance with previous GAAP and also would not qualify for recognition in accordance with Australian Accounting Standards in the separate statement of financial position of the acquiree (see (f)–(i) below).
The first-time adopter shall recognise any resulting change by adjusting retained earnings (or, if appropriate, another category of equity), unless the change results from the recognition of an intangible asset that was previously subsumed within goodwill (see (g)(i) below).
(c) The first-time adopter shall exclude from its opening Australian-Accounting-Standards statement of financial position any item recognised in accordance with previous GAAP that does not qualify for recognition as an asset or liability under Australian Accounting Standards. The first-time adopter shall account for the resulting change as follows:
(i) the first-time adopter may have classified a past business combination as an acquisition and recognised as an intangible asset an item that does not qualify for recognition as an asset in accordance with AASB 138 Intangible Assets. It shall reclassify that item (and, if any, the related deferred tax and non-controlling interests) as part of goodwill (unless it deducted goodwill directly from equity in accordance with previous