Telstra 2013 Annual Report Download - page 92

NOTES TO THE
FINANCIAL STATEMENTS
(CONTINUED)
90 Telstra Annual Report 2013 Telstra Corporation Limited and controlled entities
2.24 New accounting standards to be applied in future
reporting periods (continued)
(b) Consolidated Financial Statements (continued)
Based on our assessments, it is anticipated that the revised
definition of control will have no significant impact to Telstra's
current accounting for investments held. Investments currently
accounted for as subsidiaries would continue to meet the revised
definition of control and therefore continue to be consolidated in the
group's financial statements. Investments currently accounted for
as associates have been assessed against the revised control
definition and there would be no changes in the accounting
treatment for these investments. Therefore, Telstra will continue to
equity account for them.
(c) Joint Arrangements
AASB 11: “Joint Arrangements” was also released by the AASB in
August 2011 and replaces the existing AASB 131: “Interests in Joint
Ventures”. This new standard has revised the definition types of
joint arrangements, focusing on the rights and obligations of the
arrangement, rather than its legal form. The definition types have
been consolidated into two joint ventures (currently referred to as
jointly controlled entities) and joint operations (currently referred to
as jointly controlled assets and jointly controlled operations).
Furthermore, the accounting treatment options for joint venture
arrangements have been removed to eliminate inconsistent
treatments, where equity accounting is mandatory for joint ventures
and proportionate consolidation can no longer be used.
This standard is applicable to Telstra from 1 July 2013 on a
retrospective basis, with early adoption permitted provided that the
entire suite of consolidation and related standards is adopted at the
same time.
Based on management’s current assessments, the revised
definition types of joint arrangements will have no impact on
Telstra's current joint arrangement classifications. The assessment
of Telstra's material jointly controlled entities shows there are no
jointly controlled entities that give Telstra direct rights over assets or
obligations to settle liabilities, such that they should be classified as
joint operations. Therefore, all of these jointly controlled entities
would be classified as joint ventures and given that Telstra's current
accounting policy for jointly controlled entities is to use the equity
accounting method, these joint ventures will remain equity
accounted for under AASB 11. Overall, we expect no impact on the
measurement of any of Telstra's existing joint arrangements.
(d) Disclosures of Interests in Other Entities
AASB 12: “Disclosure of Interests in Other Entities” was issued by
the AASB in August 2011 and is a new standard on disclosure
requirements for all forms of interests in investments, including
subsidiaries, associates, joint arrangements and consolidated and
unconsolidated structured entities.
This standard is applicable to Telstra from 1 July 2013 on a
retrospective basis, with early adoption permitted provided that the
entire suite of consolidation and related standards is adopted at the
same time.
Based on our current assessments, we expect additional
disclosures will be required by Telstra as a result of AASB 12, in the
following areas:
• controlled entities with non-controlling interests that are material
to Telstra;
• interests in consolidated structured entities; and
• unconsolidated structured entities.
(e) Separate Financial Statements
AASB 127: “Separate Financial Statements” has been released by
the AASB in August 2011 to replace the current AASB 127
standard, now only containing the accounting requirements for
preparation of separate financial statements of the parent.
This standard is applicable from 1 July 2013, with early adoption
permitted provided that the entire suite of consolidation and related
standards is adopted at the same time. There is no impact to
Telstra’s financial statements as we already comply with the
requirements in the standard.
(f) Investments in Associates and Joint Ventures
AASB 128: “Investments in Associates and Joint Ventures” was
issued by the AASB in August 2011 and replaces the current AASB
128 standard. Limited amendments have been made to AASB 128,
including the application of AASB 5: “Non current assets held for
sale and discontinued operations” to interests in associates and
joint ventures and how to account for changes in interests in joint
ventures and associates.
This standard is applicable from 1 July 2013, with early adoption
permitted provided that the entire suite of consolidation and related
standards is adopted at the same time.
We have assessed that there will be no impact to Telstra’s financial
statements as a result of this standard.
(g) Fair Value Measurement
AASB 13: “Fair Value Measurement” was released by the AASB in
August 2011 and is a new standard providing a single source of
guidance for all fair value measurements and a precise definition of
fair value. It replaces all fair value measurement guidance in
Australian Accounting Standards and Interpretations but does not
replace existing standards requirements on when fair values should
be used. A related omnibus standard AASB 2011-8: “Amendments
to Australian Accounting Standards Arising from AASB 13” makes
a number of definition and guidance amendments to other
accounting standards as a result of the amendments in AASB 13
and must be adopted at the same time.
This standard is applicable to Telstra from 1 July 2013, with early
adoption permitted.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES, ASSUMPTIONS AND JUDGEMENTS
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