ADAVB 2018/2019 Annual Report

A D A V B A N N U A L R E P O R T 2 0 1 8 / 1 9 | 3 1 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 The financial statements cover Australian Dental Association Victorian Branch Incorporated (‘ADAVB’) as an individual entity and ADAVB and its controlled entity as a consolidated entity. ADAVB is an incorporated association in Victoria, incorporated under the Associations Incorporation Reform Act 2012 (Victoria) . NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Australian Dental Association Victorian Branch Inc. applies Australian Accounting Standards – Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements and other applicable Australian Accounting Standards - Reduced Disclosure Requirements . The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Associations Incorporation Reform Act 2012. The association is a not-for-profit entity for financial reporting purposes under Australian Accounting standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of the financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. All amounts are presented in Australian dollars, unless otherwise noted. (a) CHANGES IN ACCOUNTING POLICIES AASB 9 Financial Instruments AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement. It makes major changes to the previous guidance on the classification and measurement of financial assets and introduces an ‘expected credit loss’ model for impairment of financial assets. When adopting AASB 9, the Group has applied transitional relief and opted not to restate prior periods. Differences arising from the adoption of AASB 9 in relation to classification, measurement, and impairment are recognised in opening retained earnings as at 1 January 2018. The adoption of AASB 9 has impacted the following areas: Classification and measurement of the Group’s financial assets Listed equity investments - Available for sale financial assets under AASB 139 included listed equity investments of $3,103,593 at 1 July 2018. These were reclassified to fair value through other comprehensive income (FVOCI) under AASB 9. $327,090 was transferred from the available for sale financial assets reserve to fair value reserve of financial assets through OCI on 1 July 2018. Held to maturity financial assets in relation to fixed interest bank bonds totalling $1,060,000 have been reclassified at amortised cost under AASB 9. The Group intends to hold these to maturity to collect the contractual cashflows and these cash flows are solely payments of principle and interest. Impairment of financial assets The Group’s debt instruments carried at amortised cost (bank bonds) are subject to AASB 9’s new three-stage expected credit loss model. These bonds are considered low credit risk and therefore the impairment allowance is determined as 12 months expected credit losses.