Practical examples of maturity disclosure

The requirements outlined in the FRR (and this guide) represent accounting policy decisions. If entities are required to change their accounting policy, they will be subject to the provisions of AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors (AASB 108).

Under paragraph 19(b) of AASB 108, a voluntary change in the accounting policy shall be applied retrospectively except to the extent that under paragraph 23 of AASB 108, it is impracticable to determine the effects.

Appropriations receivable would reasonably be reported as an asset that is expected to be recovered ‘within 12 months’ because the amount is generally immediately available to entities on an at-call basis.

Maturity disclosure of trade and other receivables is dependent on the terms of the receivable.

Property, plant and equipment (PPE) would reasonably be reported as an asset to be recovered in ‘more than 12 months’. Where a PPE asset is expected to be sold or disposed of within 12 months (for example, under AASB 5 Non-current Assets Held for Sale and Discontinued Operations), that asset is to be reported as ‘within 12 months’, with remaining PPE assets reported as ‘more than 12 months’.

Loans taken with a repayment term over a number of years would ordinarily be separated into amounts due within 12 months and more than 12 months based on contractual repayments of principal and interest. For example:

If an entity takes a new loan for a 5 year term, with equal yearly principal and interest repayments, the loan would be treated and disclosed as:

• four-fifths of the loan amount being due for repayment in more than 12 months,
• one-fifth of the loan amount being expected to be settled within 12 months.

Maturity information for employee entitlements required by section 34B of the FRR may differ to the accounting treatment for measurement purposes under AASB 119 Employee Benefits (AASB 119). For:

Table 1.1 shows the different treatment of employee provisions under section 34B of the FRR and AASB 119.

Table 1.1: Employee entitlements treatments

^{*The percentage split of amounts by maturity will depend on entity level analysis.}

Also note LSL classification under:

• AASB 119 as ‘long-term employee benefit’ for employee provisions,
• AASB 124 Related Party Disclosures (AASB 124) as ‘other long-term benefits’ for the key management personnel remuneration disclosure note.

The calculation methodology used must be subject to the same assurance processes used for other information in entity financial statements and consistently applied from year to year. Any significant judgements made or estimate uncertainty may need to be disclosed in accordance with paragraphs 122 and 125 of AASB 101.

Prepayments disclosure (for an asset or liability) is dependent on the terms of the obligation, for example:

• A service that is expected to be provided within the next 12 months would be disclosed as ‘within 12 months’.
• A service to be provided across the next 24 months would likely be disclosed across ‘within 12 months’ and ‘more than 12 months’.

Table 1.2 provides examples of asset and liability items and when these are commonly expected to be recovered/settled.

Table 1.2: Examples of maturity disclosures (illustrative only)