Document ID: chunk:federal_register_of_legislation:F2024L00708:body:0:p15
Version: federal_register_of_legislation:F2024L00708
Segment Type: other
Provision Reference: 
Character Range: 39358–42296

they generate a return individually and largely independently of the entity's other resources) that an entity invests in as a main business activity (see paragraph B40), the entity shall classify the income and expenses specified in paragraph 54 in the operating category.

The financing category
59 To determine what income and expenses to classify in the financing category, an entity shall distinguish between:
(a) liabilities that arise from transactions that involve only the raising of finance (see paragraphs B50–B51); and
(b) liabilities other than those described in (a) – that is, liabilities that arise from transactions that do not involve only the raising of finance (see paragraph B53).
60 For the liabilities specified in paragraph 59(a) (that is, liabilities that arise from transactions that involve only the raising of finance), except as set out in paragraphs 63–66, an entity shall classify in the financing category the amounts included in the statement of profit or loss for:
(a) income and expenses that arise from the initial and subsequent measurement of the liabilities, including on derecognition of the liabilities (see paragraph B52); and
(b) the incremental expenses directly attributable to the issue and extinguishment of the liabilities – for example, transaction costs.
61 For the liabilities specified in paragraph 59(b) (that is, liabilities that arise from transactions that do not involve only the raising of finance), except as set out in paragraphs 63–64, an entity shall classify in the financing category:
(a) interest income and expenses, but only if the entity identifies such income and expenses for the purpose of applying other requirements in Australian Accounting Standards; and
(b) income and expenses arising from changes in interest rates, but only if the entity identifies such income and expenses for the purpose of applying other requirements in Australian Accounting Standards.
62 Paragraphs B56–B57 set out how an entity shall apply the requirements in paragraphs 59–61 to hybrid contracts that contain a host that is a liability.
63 The requirements in paragraphs 60–61 do not apply to gains and losses on derivatives and designated hedging instruments. An entity shall apply paragraphs B70–B76 to classify such gains and losses.
64 An entity shall exclude from the financing category and classify in the operating category:
(a) income and expenses from issued investment contracts with participation features recognised applying AASB 9 Financial Instruments (see paragraph B58); and
(b) insurance finance income and expenses included in the statement of profit or loss applying AASB 17 Insurance Contracts.

Entities with specified main business activities
65 If an entity provides financing to customers as a main business activity, it shall classify income and expenses (see paragraph B59):
(a) from the liabilities specified in paragraph 59(a) (that is, liabilities that arise