In September 2005 the Australian Accounting Standards Board released AASB 2005-09 Amendment to Australian Accounting Standards which amends AASB 4 Insurance Contracts, AASB 1023 General Insurance Contracts, AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement. In terms of the amendment, financial guarantee contracts issued are included within the scope of AASB 139. However, if the issuer has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts, the issuer may elect to apply either the requirements of this amendment or AASB 4.
This accounting alert provides an overview of the amendment.