This document provides an overview of a presentation on new accounting standards for entities adopting standards for the first time in 2019. It introduces Mazars and covers AASB 9 on financial instruments, AASB 16 on leases, AASB 15 on revenue, and AASB 1058 on income for not-for-profit entities. Timelines and key impacts are discussed for each new standard.

1. NEW ACCOUNTING STANDARDS
Adopting standards for the first time in 2019.
July 2019

2. - M A Z A R S
TODAY’S AGENDA
1. INTRODUCTION TO MAZARS
2. AASB 9 FINANCIAL INSTRUMENTS
3. AASB 16 LEASES
4. AASB 15 REVENUE FROM CONTRACTS WITH CUSTOMERS
5. AASB 1058 INCOME OF NOT-FOR-PROFIT ENTITIES
2

3. - M A Z A R S
EFFECTIVE DATES
4
AUSTRALIAN ACCOUNTING
STANDARDS
FOR ANNUAL REPORTING PERIODS
ENDING 31 DECEMBER
FOR ANNUAL REPORTING PERIODS
ENDING 30 JUNE
AASB 9 31 December 2018 30 June 2019
AASB 16 31 December 2019 30 June 2020
AASB 15 31 December 2019 30 June 2020
AASB 1058 31 December 2019 30 June 2020

4. - M A Z A R S
How do you stay
up-to-date?
TECHNICAL COMPETENCE
Sources of information:
 Mazars global updates
 Big 4/Forum of Firms websites & newsletters
 IASB
 AASB
 AuASB
 Standards newsletters
 CA ANZ newsletters
 CA ANZ My CA website
 GAAP Consulting newsletter
 www.iasplus.com (Deloitte site)
 Law firm newsletters
5

5. - M A Z A R S
MAZARS GAAP NEWSLETTER
6

6. - M A Z A R S
GAAP CONSULTING
7

7. - M A Z A R S
INTRODUCING MAZARS
Who are we …
Why can we speak about NFP accounting …
8

8. - M A Z A R S
The opportunity to join the Mazars global partnership
allows us to maintain our personal ownership of the
local practice, while overcoming the challenges
experienced by operating independently and from one
location. Being part of an international accounting
partnership will enable us to continue to serve our
Queensland clients in the same way as before and
enable us to provide enhanced services to those with
operations outside Queensland. The Mazars partnership
also enables us to provide more complex services, such
as cross border public company audit and multi-
jurisdiction IPO assignments. This Mazars partnership
will provide our people with increased opportunities to
work with overseas offices and learn new skills in audit
and advisory services.
COMMITMENTS
9
From 1 January 2019, Hanrick Curran merged with the global
partnership of Mazars. Whilst our people have remained the same,
we have changed our name and branding to reflect the merger with
the global Mazars partnership.
Matthew Green
Partner
10 July 2019

9. - M A Z A R S
INTRODUCING MAZARS NFP EXPERTS
Michael is a Chartered Accountant, Registered Company Auditor and Registered Tax
Agent. He specialises in financial statements audit, assurance services, and financial
reporting. Michael’s commercial background enables him to bring a commercial approach
to audit and reporting issues so that clients get the best outcome.
Michael looks after a broad range of industries from mining and manufacturing, to aged
care and retirement villages, insurance and indigenous organisations, to name a few. This
is where he can leverage expertise in areas such as external audit, risk management,
technical auditing and accounting issues, business and strategic planning, business and
systems reviews.
Matthew is a Fellow Chartered Accountant, Registered Company Auditor and Business
Valuation Specialist with experience in public practice and commercial roles with ASX
listed companies. He specialises in audit, financial reporting, assurance services, and
business valuation. Matthew’s commercial background helps him understand issues from
a client perspective so that he can work to get you the best possible outcome and enables
him to bring a commercial approach to audit and reporting issues.
Matthew brings a deep understanding of financial reporting for all types of companies and
related assurance and audit services and this ensures clients are well informed and
receive a ‘no surprises’ result.
Matthew is currently an independent committee member for the Lourdes Hill College Risk
& Governance Committee and an independent Non-Executive Director of Maleny Credit
Union (MCU Ltd), Vlocity Australia and CS Technology.
Michael Georghiou
Audit Partner
Matthew Green
Audit Partner
10

10. - M A Z A R S
BRISBANE SENIOR PEOPLE
Hafsa has been a senior member of the
Mazars team since 2010 and is a
Chartered Accountant.
Hafsa is responsible for the oversight of
audit assignments, including determining
the smooth completion of the relevant
fieldwork.
Hafsa Manjra CA
Senior Assurance Manager
Dinushi has been a senior member of the
Mazars for a number of years and
commenced with the Firm in 2011.
Dinushi has a Bachelor of Business from
Griffith University.
Dinushi is responsible for the day-to-day
administration of audit assignments and
liaison with our client’s administration and
accounting staff.
Dinushi Soans-Ireland ACA
Assistant Assurance Manager
Bowie joined the Mazars audit team in
2018, is a Chartered Accountant and has
been with Mazars since 2015.
Bowie is responsible for the day-to-day
administration of audit assignments and
liaison with our client’s administration and
accounting staff.
Bowie Huang CA
Senior Assurance Analyst
Marina joined the Mazars team in 2014,
has a Masters in Accounting from QUT
and is a Chartered Accountant.
Marina is responsible for the day-to-day
administration of audit assignments and
liaison with our client’s administration and
accounting staff.
Marina Datova CA
Senior Assurance Analyst
11

11. - M A Z A R S
TAX ADVISERS IN NFP SECTOR
Jamie is a Fellow Chartered Accountant, Fellow of the Tax Institute, and Registered Tax
Agent. With significant experience with global entities exposed to tax regimes in
Australia, Asia and the Americas, Jamie is well positioned to assist Harsco Rail with its
future tax lodgements and requirements.
Jamie leads the Mazars tax technical consulting teams, is instrumental in our service
offering to companies with connections to China and other Asian locations, and teaches
at Chartered Accountants ANZ.
Jamie has a deep understanding of cross-border taxation issues and has clients across
all sectors of the economy and of all different sizes, including smaller Owner-Managed
Businesses, ASX Listed large companies, international large companies.
Robert is a Chartered Accountant with significant experience in public practice with
Mazars.
Areas of expertise:
- Business improvement consulting
- Business taxation and structuring advice
- Strategic Planning
Robert has consulted to well known charities regarding the introduction of the National
Disability Insurance Scheme and provided boards with strategic advice regarding
restructuring operations to achieve organisational redesign for the changing NFP markets.
Jamie Towers FCA
Tax adviser
Robert Pill
Tax adviser
12

12. - M A Z A R S
OUR CREDENTIALS IN THE NFP SECTOR
Queensland Aboriginal Australian
and Islander Health Council
(“QAIHC”).
QAIHC is a charity, registered with the
ACNC, and based in Brisbane. Mazars
have acted as auditor of QAIHC since
2014.
Nhulundu Health Service
Nhulundu is a charity, registered with
the ACNC, and Mazars have acted as
auditor of QAIHC since 2013.
Aboriginal & Torres Straight Islander
Community Health Service
ATSICHS is a charity, registered with
the ACNC, and Mazars have acted as
auditor since 2013.
Yulu-Burri-Ba Aboriginal Corporation
for Community Health
Yulu-Burri-Ba is a health service charity,
registered with the ACNC, and Mazars
have recently been appointed as auditor
of the entity.
13

13. - M A Z A R S
AASB 9 FINANCIAL INSTRUMENTS
Effective for 2019 statements.
14

14. - M A Z A R S
The new standard provides a new model for the
classification and measurement of financial
assets, makes some minor amendments to the
accounting for financial liabilities, provides a
new set of hedge accounting rules and
prescribes new principles for measuring and
recording impairment of financial assets.
AASB 9 FINANCIAL INSTRUMENTS - OVERVIEW
 AASB 9 has been slowly developed over a number of years. Our
people first worked with early adopters of this standard for
December 2009 reporting.
 The standard covers a wide range of items in a financial report,
including the basis such as RECEIVABLES and PAYABLES.
 AASB 9 was first released in 2009, with mandatory application
delayed until at least 2013.
 Initially the standard only addressed classification and
measurement of financial assets. Other areas were added to the
standard subsequently, until the full standard was released in 2014.
15

15. - M A Z A R S
AASB 9 SCOPE
16

16. - M A Z A R S
FINANCIAL INSTRUMENT SCOPE
 Covers many balances in the financial statements.
 Includes:
 Cash
 Receivables
 Investments
 Payables
 Borrowings
 Derivative financial instruments
 The definition of a financial instrument is
contained in AASB 132.
 Disclosure requirements for financial instruments
are contained in AASB 7.
17

17. - M A Z A R S
AASB 9 KEY CHANGES
Changes
 Streamlined asset categories.
 Tweaked accounting for liabilities (different terminology).
 Simplified hedge accounting rules.
 Removal of cost exemption for unlisted equity investments.
New concepts
 ‘loan loss accounting’ or ‘expected credit loss’ model.

18. - M A Z A R S
AASB 9: FINANCIAL INSTRUMENTS – AASB 9 VS AASB 139
19
AASB 9
EXPECTED CREDIT
LOSS MODEL (ECL)
ECLs are recognised at
each reporting period,
even if no actual loss
events have taken
place;
In addition to past
events & current
conditions, FORWARD-
LOOKING information
without undue cost or
effort is also considered;
One model which
applies to all financial
instruments.
AASB 139
INCURRED LOSS
MODEL
Delays the recognition
of credit losses until
there is objective
evidence of impairment;
Only past events &
current conditions are
considered;
Different impairment
models for different
financial instruments.

19. - M A Z A R S
AASB 9: FINANCIAL INSTRUMENTS – NEW MODEL
20
The general approach
The simplified
approach
The originated credit
impaired approach
Three approaches to impairment exist under AASB 9:

20. - M A Z A R S
AASB 9: FINANCIAL INSTRUMENTS – THE GENERAL APPROACH
21
STAGE 1: Initial recognition—recognise 12 month expected credit losses
STAGE 2: Significant increase in credit risk—recognise lifetime expected credit losses.
STAGE 3: Credit impaired—recognise lifetime expected credit losses and recognise interest revenue
based on the written down amount.
THE GENERAL APPROACH—THE THREE BUCKETS
The model uses what has been referred to as a ‘three bucket’ or ‘three stage’
approach:

21. - M A Z A R S
AASB 9: FINANCIAL INSTRUMENTS – THE SIMPLIFIED APPROACH
22
THE SIMPLIFIED APPROACH
The simplified approach requires an entity to always measure the loss allowance at an
amount equal to lifetime expected credit losses.
This approach is mandated for the following items that do not contain a significant
financing component:
 trade receivables;
 contract assets that result from transactions that are within the scope of AASB 15
This approach is optional for the following items that do contain a significant financing
component:
• trade receivables;
• contract assets; and
• lease receivables

22. - M A Z A R S
AASB 9: FINANCIAL INSTRUMENTS – THE CREDIT IMPAIRED APPROACH
23
THE CREDIT IMPAIRED APPROACH
This approach applies to the credit impaired asset at initial recognition (e.g. loans
acquired at a deep discount due to their credit risk).

23. - M A Z A R S
AASB 16 LEASES
No change for Lessors.
Significant changes for Lessees.
24

24. - M A Z A R S
AASB 16: LEASES
25
The objective of AASB 16 is to ensure that lessees and lessors provide relevant
information in a manner that faithfully represents their lease transactions in their financial
statements. This information provides a basis for users of the financial statements to
assess the effect that the leases have on the financial position, financial performance and
cash flows of an entity. (AASB 16:1)
AASB 16 introduces new concepts related to the ‘right-of-use asset’ (“ROU”) and retains
familiar concepts related to ‘lease liabilities’. Whilst there are exceptions to the scope,
recognition, and measurement of leases under AASB 16, the majority of entities applying
this standard will recognise more assets and liabilities related to their lease contracts. In
effect, AASB 16 results in the application of a ‘finance lease’ concept under the old
standard to all contracts for relevant entities.

25. - M A Z A R S
One of my great
ambitions before I die is
to fly in an aircraft that is
on an airline’s balance
sheet.
THE HISTORY OF LEASE ACCOUNTING …
 Sir David Tweedie, former Chair of IASB
Speech to the Empire Club, Toronto, April 2008
26

26. - M A Z A R S
GENERIC IMPACT OF AASB 16
27 Source: Training notes presented by Mr D. Sauer, Brisbane 2019.

27. - M A Z A R S
AASB 16 APPLICATION
28 Source: Mazars IFRS 16 Overview: What does the future hold for your lease contracts? (June 2016)

28. - M A Z A R S
AASB 16 EXEMPTIONS FOR SHORT-TERM AND LOW-VALUE
29 Source: Mazars IFRS 16 Overview: What does the future hold for your lease contracts? (June 2016)

29. - M A Z A R S
AASB 16 LEASE TERM
Introduction of Judgement
 Consider the interpretation of the term ‘reasonably certain’.
30 Source: Mazars IFRS 16 Overview: What does the future hold for your lease contracts? (June 2016)

30. - M A Z A R S
AASB 16 INITIAL MEASUREMENT OF LIABILITY
31 Source: Mazars IFRS 16 Overview: What does the future hold for your lease contracts? (June 2016)

31. - M A Z A R S
AASB 16 IMPLEMENTATION CHOICES
AASB 16 implementation choices
2. Modified implementation
2A. Cumulative
catch-up
2B. Equalise
asset & liability
1. Full
retrospective
32

32. - M A Z A R S
AASB 16 Leases required not-for-profit (NFP)
lessees to fair value their right-of-use (ROU)
assets subject to ‘peppercorn’ leases for annual
periods beginning on or after 1 January 2019.
On 13 November 2018, the Australian
Accounting Standards Board (AASB) announced
that it has decided to issue an Exposure Draft
proposing a temporary option to defer these
requirements.
AASB 16: LEASES – TEMPORARY DEFERRAL
(PEPPERCORN LEASES)
 Temporary reprieve for NFP entities operating with peppercorn
leases.
33

33. - M A Z A R S
REVENUE & INCOME
AASB 15
AASB 1058
AASB 1004
34

34. - M A Z A R S
Revenue has to be earned.
REVENUE FOCUS
 Revenue has been a focus area for accountants and regulators
since late 1990s.
 Accounting collapses, including Enron and WorldCom, have
highlighted the risk of revenue for accountants, directors, auditors,
and regulators.
 AASB 15 is based on a principle that requires an entity to recognise
revenue in a manner that depicts the transfer of goods and services
to customers at an amount that reflects the consideration the entity
expects to be entitled to in exchange for those goods or services.
35

35. - M A Z A R S
INCOME OF NOT-FOR-PROFIT ENTITIES – DECISION TREE
36
Source: NSW Treasury “Guidance for AASB 1058 Income of not-for-profit entities” (6 Dec. 2017)

36. - M A Z A R S
AASB 1058 ‘SUFFICIENTLY SPECIFIC’ & ‘ENFORCEABLE’
37
Enforceable Agreement
A ‘contract’ is an agreement between two or
more parties that creates ‘enforceable’ rights and
obligations. An agreement is typically
enforceable by another party through legal or
equivalent means.
Sufficiently Specific
Entities need to use judgement when assessing
whether a promise is ‘sufficient specific’, taking
into account any conditions specified in he
arrangement regarding the promised goods or
services, including conditions regarding:
 The nature or type of the goods or service
 The cost or value of the goods or services
 The quantity of the goods or services
 The period of the goods or service

37. - M A Z A R S
AASB 15: REVENUE FROM CONTRACTS WITH CUSTOMERS - FIVE-STEP REVENUE MODEL
38
STEP 1
Identified
contract(s)
with a
customer
STEP 2
Identify the
separate
performance
obligation
STEP 3
Determine
the
transaction
price
STEP 4
Allocate
transaction
price
STEP 5
Recognise
revenue
when a
performance
obligation is
satisfied
Source: Chartered Accountants ANZ, FIN 119 module guide.

38. - M A Z A R S
AASB 15: STEP 1 - IDENTIFIED CONTRACT(S) WITH A CUSTOMER
39
STEP 1
Identified
contract(s) with
a customer
Consists of two parts:
Identify the
contract
Considering
the
potential
combination
of contracts
Source: Chartered Accountants ANZ, FIN 119 module guide.

39. - M A Z A R S
STEP 1 – IDENTIFY CONTRACTS - CRITERIA
The contract is approved and the parties are
committed to their obligations
The entity can identify each party’s rights and
payment terms
The contract has commercial substance Collection of consideration is probable
Contracts with customers
must meet ALL of these
criteria (Para 9)
“If each party has the unilateral enforceable right to terminate a wholly unperformed
contract without compensating the other party (or parties) – no contract for the purpose
of AASB 15 (Para 12)”

40. - M A Z A R S
AASB 15: STEP 2 - IDENTIFY THE SEPARATE PERFORMANCE OBLIGATION
41
STEP 2
Identify the
separate
performance
obligation
A performance obligation is:
A
promise
In a
contract
To
transfer
A good or
service (or a
bundle of goods
or service) that is
distinct
Or
 A series of
distinct goods
or services
 That are
substantially
the same, and
 That have the
same pattern
of transfer to
the customer
Source: Chartered Accountants ANZ, FIN 119 module guide.

41. - M A Z A R S
AASB 15: STEP 3 – DETERMINE THE TRANSACTION PRICE
42
STEP 3
Determine the
transaction price
Transaction
price
Amount of
consideration
the entity
expects to be
entitled to
Entities have to consider the following in order to determine the
transaction price:
 Terms of a contract
 The entity’s customary business practices
Source: Chartered Accountants ANZ, FIN 119 module guide.

42. - M A Z A R S
AASB 15: STEP 4 – DETERMINE THE TRANSACTION PRICE
43
Fixed
consideration
Variable
consideration
Transaction price
OR BOTH
Constraining
estimates of
variable
consideration
Existence of a
significant
financing
component
Non-cash
consideration
Consideration
payable to a
customer
Variable
consideration
An entity should consider the effects of all of the
following when determining transaction price:
Source: Chartered Accountants ANZ, FIN 119 module guide.

43. - M A Z A R S
AASB 15: STEP 4 – ALLOCATE THE TRANSACTION PRICE
44
STEP 4
Allocate the
transaction price
Transaction
price
Allocating transaction price to performance obligations:
General rule
Allocate based
on stand-alone
selling prices at
inception
Expectation
Stand-alone
selling price not
observable:
estimate using
methods in para.
79
Source: Chartered Accountants ANZ, FIN 119 module guide.

44. - M A Z A R S
AASB 15: STEP 5 – RECOGNISED REVENUE WHEN A PERFORMANCE OBLIGATION IS SATISFIED
45
STEP 5
Recognise
revenue when a
performance
obligation is
satisfied
Key Question: Does the entity transfer
control of the asset over time?
The entity should recognise
revenue at a point in time at
which it transfers control of the
good or service to the customer
The entity should recognise
revenue over time, using
method that depicts its
performance
NOYES
Source: Chartered Accountants ANZ, FIN 119 module guide.

45. - M A Z A R S
STEP 5 – SATISFACTION OF PERFORMANCE OBLIGATIONS – OVER TIME
 Output methods – revenue based on direct measurement of the value transferred to the customer, e.g.
surveys of work performed, units produced, units delivered, contract milestones. (Para B15-B17)The
disadvantages of output method are that the outputs may not be directly observable. Also, as an example,
output methods based on units produced or units delivered would not represent an entity’s performance in
satisfying a performance obligation in case if, at the end of reporting period, the entity’s performance has
produced work in progress or finished goods controlled by the customer that are not included in the
measurement of the output (Para 15).
 Input methods – revenue based on the entity’s efforts to satisfy the performance obligation – costs incurred,
labour hours expended, machine hours used, time elapsed, quantities of materials. Input method must
exclude any costs that do not result in goods or services transferred. (Para B18-B19)

46. - M A Z A R S
CHANGES IN REVENUE ACCOUNTING JOURNALS
AASB 118
Dr Debtors
Cr Sales
AASB 15
Step 1.
Dr Contract asset
Cr Contract Liability
Step 2.
Dr Contract Liability
Cr Sales
Dr Debtors
Cr Contract asset

47. - M A Z A R S
AASB 1058 INCOME OF NOT-FOR-PROFIT
ENTITIES
Where income is not captured by AASB 15, it will generally be dealt with
under AASB 1058.
Exceptions may occur where cash received is treated as a liability under
AASB 9, on the basis of the principle v agent arrangements.
50

48. - M A Z A R S
PRINCIPAL V AGENT REFRESH FOR GRANT ACCOUNTING
 When considering revenue transactions, an initial consideration is
whether the organisation is acting as principal or agent (AASB
15.B.34 – B.38).
 These considerations become fundamental to later assessments.
 Indicators of an agency relationship include:
a) Another party is responsible for fulfilling the contract.
b) The entity does not carry inventory risk.
c) Pricing is established by another party.
d) Compensation is earned in the form of commission.
e) Limited exposure to credit risk.
Principal Agent
51

49. - M A Z A R S
AASB 1058 SCOPE
52
Under the new income recognition model, Not-for-
profit (NFP) first considers whether AASB 15
Revenue from contract with customers applied to
a transaction or part of a transaction. In order for
AASB 15 to apply to a transaction, the
performance obligation(s) arising from the
transaction needs to be ‘sufficiently specific’ and
‘enforceable’.
When AASB 15 does not apply to a transaction or
part of a transaction, the NFP then considers
whether AASB 1058 applies. AASB 1058 will
apply when a NFP;
 Enters into a transaction where the
consideration to acquire an asset is
significantly less than fair vale principally to
enable the NFP to further its objectives
 Receives volunteer services (only a
requirement for government entities, optional
for other NFP entities)

50. - M A Z A R S
AASB 1058 CONSIDERATIONS
Able to control delivery
 Provided that the entity can control delivery of conditions for a grant,
the income would be recognised when received and controlled by
the entity.
Not able to control delivery
 Would generally defer recognition of income until delivery can be
assured (e.g., until after legislation passes Parliament).
53

51. - M A Z A R S
CONCLUSION
Time for questions …
69

52. - M A Z A R S
OUR VALUES
LIVING BY OUR VALUES
The values we live by date back to our founding fathers and have never stopped guiding
us. They represent the core of the principles we apply every day, with our people, our
clients and wider society. They have been the key to our development for more than 70
years and we are convinced that they will continue to be the foundation for our
sustainable growth in the years and decades to come.
74
INTEGRITY
RESPONSIBILITY
TECHNICAL
EXCELLENCE
INDEPENDENCE
STEWARDSHIPDIVERSITY
& RESPECT

53. - M A Z A R S
CAVEATS AND WARRANTIES
This document contains information in summary form and is therefore intended for
general guidance only. It is not intended to be a substitute for detailed research
or the exercise of professional judgement. It does not purport to be
comprehensive or to render professional advice. The reader should not act on
the basis of any matter contained in this publication without first obtaining specific
professional advice.
We believe that the statements made by us in this document are accurate but no
warranty of accuracy or reliability is given. Our conclusions are based on
interpretations of accounting standards and other relevant professional
pronouncements and legislation current as at the date of this document. Should
the interpretations, accounting standards, other relevant professional
pronouncements or legislation change, our conclusions may not be valid. We are
under no obligation to update the matters considered in this document after its
publication.
© Mazars, July 2019
90

54. About Mazars
Mazars is an international, integrated and independent firm, specialising in audit,
accountancy, advisory, tax and legal services. Operating in 89 countries and
territories, as of 1 January 2019, the firm draws on the expertise of 23,000
professionals to assist major international groups, SMEs, private investors
and public bodies at every stage in their development.
CONTACT
Mazars Queensland
GPO Box 2268, Brisbane Qld 4001
L.11, 307 Queen Street, Brisbane Qld 4000
Tel. + (61)(07) 3218 3900
www.mazars.com / www.mazars.com.au
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