ASLB 33 First Time Adoption

ASLB 33, First-Time Adoption of Accrual Basis
Accounting Standards for Local Bodies
Contents
Paragraphs
OBJECTIVE 1
SCOPE 2–8
DEFINITIONS 9–14
Date of Adoption of ASLBs 10
First ASLB Financial Statements 11
Previous Basis of Accounting 12
Transitional ASLB Financial Statements 13–14
RECOGNITION AND MEASUREMENT 15–22
Opening Balance Sheet on Adoption of ASLBs 15
Accounting Policies 16–22
EXCEPTIONS TO THE RETROSPECTIVE APPLICATION
OF ASLBS 23–26
FAIR PRESENTATION AND COMPLIANCE WITH ASLBS 27–32
EXEMPTIONS THAT AFFECT FAIR PRESENTATION AND
COMPLIANCE WITH ACCRUAL BASIS ASLBS DURING
THE PERIOD OF TRANSITION 33–62
Three Year Transitional Relief Period for the Recognition
and/or Measurement of Assets and/or Liabilities 36–62
EXEMPTIONS THAT DO NOT AFFECT FAIR PRESENTATION AND
COMPLIANCE WITH ACCRUAL BASIS ASLBS DURING THE PERIOD
OF ADOPTION.............. 63–134
Using Deemed Cost to Measure Assets and/or Liabilities 64–70
Using Deemed Cost to Measure Assets Acquired Through
a Non-Exchange Transaction 71
Using Deemed Cost for Investments in Controlled Entities,
Joint Ventures and Associates (ASLB 34) 72–73
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Date at which Deemed Cost can be determined 74–76
ASLB 1, ‘Presentation of Financial Statements’ 77–84
ASLB 4, ‘The Effects of Changes in Foreign Exchange Rates’ 85-87
ASLB 5, ‘Borrowing Costs’ 88 – 90
ASLB 13, ‘Leases’ 95–96
ASLB 18, ‘Segment Reporting’ 97
ASLB 21, ‘Impairment of Non-Cash-Generating Assets’ 98–100
ASLB 39, ‘Employee Benefits’ 101–107
ASLB 31, ‘Intangible Assets’ 125–126
ASLB 32, ‘Service Concession Arrangements’ 127–128
ASLB 34, ‘Separate Financial Statements’, ASLB 35,
‘Consolidated Financial Statements’ and ASLB 36,
‘Investments in Associates and Joint Ventures’ 129-130
ASLB 35, ‘Consolidated Financial Statements’ 131
ASLB 37, ‘Joint Arrangements’ 132–134
ASLB 42, ‘Social Benefits’ 1134A–134B
DISCLOSURES 135–152
Explanation of Transition to ASLBs 141
Reconciliations 142–147
Disclosures where Deemed Cost is Used for Inventory,
Investment Property, Property, Plant and Equipment,
Intangible Assets or Service Concession Assets 148
Disclosures Where Deemed Cost is Used for Investments
in Controlled Entities, Joint Ventures or Associates 149–150
Exemptions from Disclosure Requirements in ASLBs
during the Period of Transition 151–152
IMPLEMENTATION GUIDANCE
APPENDIX 1: COMPARISON WITH IPSAS 33, ‘FIRST TIME ADOPTION
OF ACCRUAL BASIS IPSASS’

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Accounting Standard for Local Bodies (ASLB) 33
First-Time Adoption of Accrual Basis Accounting
Standards for Local Bodies
(This Accounting Standard includes paragraphs set in bold italic type and
plain type, which have equal authority. Paragraphs in bold italic type indicate
the main principles. This Accounting Standard should be read in the context
of its objective and the ‘Preface to Accounting Standards for Local Bodies’1.)
The Accounting Standard for Local Bodies (ASLB) 33, ‗First-Time Adoption of
Accrual Basis Accounting Standards for Local Bodies (ASLBs)‘, issued by the
Council of the Institute of the Chartered Accountants of India, will be
recommendatory in nature in the initial years for use by the local bodies. This
Standard will be mandatory for local bodies in a State from the date specified
in this regard by the State Government concerned 2.
The following is the text of the Accounting Standard for Local Bodies:

Objective
1. The objective of this Standard is to provide guidance to a first-time
adopter that prepares and presents financial statements following the
adoption of accrual basis ASLBs, in order to present high quality
information:
(a) That provides transparent reporting about a first-time adopter‘s
transition to accrual basis ASLBs;
(b) That provides a suitable starting point for accounting in
accordance with accrual basis ASLBs irrespective of the basis
of accounting the first-time adopter has used prior to the date of
adoption; and
(c) Where the benefits are expected to exceed the costs.

1Attention is specifically drawn to paragraph 4.2 of the ‘Preface to Accounting Standards

for Local Bodies’, according to which Accounting Standards are intended to apply only to
items which are material.
2 In respect of compliance with the Accounting Standards for Local Bodies, reference

may be made to the paragraph 7.1 of the ‘Preface to the Accounting Standards for Local
Bodies’.

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Scope
2. An entity should apply this ASLB when it prepares and presents
its annual financial statements on the adoption of, and during the
transition to, accrual basis ASLBs.
2A. This Standard applies to all entities described as Local Bodies in
the ‘Preface to the Accounting Standards for Local Bodies’3.
3. This ASLB applies when an entity first adopts accrual basis ASLBs
and during the transitional period allowed in this ASLB. It does not
apply when, for example, a first-time adopter:
(a) Stops presenting financial statements in accordance with
prescribed requirements, having previously presented them as
well as another set of financial statements that contained an
explicit and unreserved statement of compliance with accrual
basis ASLBs;
(b) Presented financial statements in the previous reporting period
in accordance with prescribed requirements and those financial
statements contained an explicit and unreserved statement of
compliance with accrual basis ASLBs; or
(c) Presented financial statements in the previous reporting period
that contained an explicit and unreserved statement of
compliance with accrual basis ASLBs, even if the auditors
modified their audit report on those financial statements.
4. This Standard should be applied from the date on which a first-time
adopter adopts accrual basis ASLBs and during the period of
transition. This Standard permits a first-time adopter to apply
transitional exemptions and provisions that may impact fair
presentation. Where these transitional exemptions and provisions are
applied, a first-time adopter is required to disclose information about
the transitional exemptions and provisions adopted, and progress
towards fair presentation and compliance with accrual basis ASLBs.
5. At the end of the transitional period a first-time adopter must comply
with the recognition, measurement, presentation and disclosure
requirements in the other accrual basis ASLB in order to assert
compliance with accrual basis ASLBs as required in ASLB 1,
‗Presentation of Financial Statements’.

3 Refer paragraph 1.3 of the ‗Preface to the Accounting Standards for Local Bodies‘.

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6. This ASLB does not apply to changes in accounting policies made by
an entity that already applies ASLBs. Such changes are the subject of:
(a) Requirements on changes in accounting policies in ASLB 3,
‗Accounting Policies, Changes in Accounting Estimates and
Errors’; and
(b) Specific transitional requirements in other ASLBs. The
transitional provisions in other ASLBs apply only to changes in
accounting policies made by an entity that already applies
accrual basis ASLBs; they do not apply to a first-time adopter‘s
transition to ASLBs, except as specified in this ASLB.
7. [Deleted]
8. [Deleted]

Definitions
9. The following terms are used in this Standard with the meanings
specified:
Date of adoption of ASLBs is the date an entity adopts accrual
basis ASLBs for the first time, and is the start of the reporting
period in which the first-time adopter adopts accrual basis ASLBs
and for which the entity presents its first transitional ASLB
financial statements or its first ASLB financial statements.
Deemed cost is an amount used as a surrogate for acquisition
cost or depreciated cost at a given date.
First ASLB financial statements are the first annual financial
statements in which an entity complies with the accrual basis
ASLBs and can make an explicit and unreserved statement of
compliance with those ASLBs because it adopted one or more of
the transitional exemptions in this ASLB that do not affect the fair
presentation of the financial statements and its ability to assert
compliance with accrual basis ASLBs.
First-time adopter is an entity that adopts accrual basis ASLBs
for the first time and presents its first transitional ASLB financial
statements or its first ASLB financial statements.
Opening balance sheet is a first-time adopter’s balance sheet at
the date of adoption of ASLBs.

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Period of transition is the period during which a first-time adopter
applies one or more of the exemptions in this ASLB before it
complies with the accrual basis ASLBs, and before it is able to
make an explicit and unreserved statement of such compliance
with ASLBs.
Previous basis of accounting is the basis of accounting that a
first-time adopter used immediately before adopting accrual basis
ASLBs.
Transitional ASLB financial statements are the financial
statements prepared in accordance with this ASLB where a first-
time adopter cannot make an explicit and unreserved statement
of compliance with other ASLBs because it adopted one or more
of the transitional exemptions in this ASLB that affect the fair
presentation of the financial statements and its ability to assert
compliance with accrual basis ASLBs.
Terms defined in other ASLBs are used in this Standard with the
same meaning as in those Standards.
Date of Adoption of ASLBs
10. The date of adoption of ASLBs is the date that an entity adopts accrual
basis ASLBs for the first time. It is the start of the reporting period in
which the first-time adopter adopts accrual basis ASLBs and for which
it presents its first transitional ASLB financial statements or its first
ASLB financial statements. If a first-time adopter takes advantage of
the exemptions in this ASLBs that affect fair presentation and
compliance with accrual basis ASLBs (see paragraphs 36–62) in
producing its first transitional ASLB financial statements, it can only
make an explicit and unreserved statement of compliance with accrual
basis ASLBs when the exemptions that provided the relief have
expired, and/or when the relevant items are recognised, measured
and/or the relevant information is presented and/or disclosed in the
financial statements in accordance with the applicable ASLBs
(whichever is earlier). Financial statements should not be described as
complying with ASLBs unless they comply with all the requirements of
all the applicable ASLBs.

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First ASLB Financial Statements
11. An entity‘s first ASLB financial statements are the first annual financial
statements in which the first-time adopter can make an explicit and
unreserved statement in those financial statements of compliance with
accrual basis ASLBs. If a first-time adopter does not adopt the
exemptions in this ASLB that affect fair presentation and compliance
with accrual basis ASLBs (see paragraphs 36–62), its first financial
statements following the adoption of accrual basis ASLBs will also be
its first ASLB financial statements.
Previous Basis of Accounting
12. The previous basis of accounting is the basis of accounting that a first -
time adopter used immediately before adopting accrual basis ASLBs.
This might be a cash basis of accounting, an accrual basis of
accounting, a modified version of either a cash basis or an accrual
basis of accounting, or another prescribed basis.
Transitional ASLB Financial Statements
13. An entity‘s transitional ASLB financial statements are the annual
financial statements in which an entity transitions to accrual basis
ASLBs and adopts certain exemptions in this ASLB that affect the fair
presentation of the financial statements and its ability to assert
compliance with accrual basis ASLBs. If a first- time adopter adopts
the exemptions in this ASLBs that affect fair presentation and
compliance with accrual basis ASLBs (see paragraphs 36–62), it will
not be able to make an explicit and unreserved statement of
compliance with other accrual basis ASLBs until the exemptions that
provided the relief in this ASLB have expired and/or when the relevant
items are recognised, measured and/ or the relevant information has
been presented and/or disclosed in accordance with the applicable
ASLBs (whichever is earlier). Financial statements should not be
described as complying with ASLBs unless they comply with all the
requirements of all the applicable ASLBs.
14. An entity‘s transitional ASLB financial statements are those financial
statements, where the entity transitions from another accounting basis
such as when it:
(a) Prepared its most recent previous financial statements in

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accordance with the ASLB, ‗Financial Reporting Under the Cash
Basis of Accounting’;
(b) Presented its most recent previous financial statements:
(i) In accordance with prescribed requirements that are not
consistent with ASLBs in all respects;
(ii) In conformity with ASLBs in all respects, except that the
financial statements did not contain an explicit and
unreserved statement that they complied with ASLBs;
(iii) Containing an explicit statement of compliance with
some, but not all, ASLBs, including the adoption of the
exemptions provided in this ASLB that affect fair
presentation and compliance with accrual basis ASLBs
(see paragraphs 36–62);
(iv) In accordance with prescribed requirements inconsistent
with ASLBs, using some individual ASLBs to account for
items for which prescribed requirements did not exist; or
(v) In accordance with prescribed requirements, with a
reconciliation of some amounts to the amounts
determined in accordance with ASLBs;
(c) Prepared financial statements in accordance with ASLBs for
internal use only, without making them available to external
users;
(d) Prepared a reporting package in accordance with ASLBs for
consolidation purposes without preparing a complete set of
financial statements as defined in ASLB 1; or
(e) Did not present financial statements for previous periods.

Recognition and Measurement
Opening Balance Sheet on Adoption of ASLBs
15. A first-time adopter should prepare and present an opening
balance sheet at the date of adoption of ASLBs. This is the
starting point for its accounting in accordance with accrual basis
ASLBs.
Accounting Policies
16. On the date of adoption of accrual basis ASLBs, a first-time

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adopter should apply the requirements of the ASLBs
retrospectively except if required, or otherwise permitted, in this
ASLB.
17. A first-time adopter should use the same accounting policies in
its opening balance sheet and throughout all periods presented,
except as specified in paragraphs 36–134. The accounting
policies should comply with each ASLB effective at the date of
adoption of ASLBs, except as specified in paragraphs 36–134.
18. A first-time adopter that takes advantage of the exemptions in
paragraph 36–134 will be required to amend its accounting policies
after the exemptions that provided the relief have expired and/or when
the relevant items are recognised, measured and/or the relevant
information is presented and/ or disclosed in the financial statements
in accordance with the applicable ASLBs (whichever is earlier).
19. A first-time adopter should apply the versions of accrual basis ASLBs
effective at the date of adoption of ASLBs. A first-time adopter may
apply a new ASLB that is not yet mandatory if that ASLB permits early
application. Any new ASLBs that become effective during the period of
transition should be applied by the first-time adopter from the date it
becomes effective.
20. Except as described in paragraphs 36–134, a first-time adopter
should, in its opening balance sheet:
(a) Recognise all assets and liabilities whose recognition is required
by ASLBs;
(b) Not recognise items as assets or liabilities if ASLBs do not
permit such recognition;
(c) Reclassify items that it recognised in accordance with the
previous basis of accounting as one type of asset, liability or
component of net assets/equity, but are a different type of
asset, liability or component of net assets/equity in accordance
with ASLBs; and
(d) Apply ASLBs in measuring all recognised assets and liabilities.
21. The accounting policies that a first-time adopter uses in financial
statements may differ from those that it used at the end of its

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comparative period under its previous basis of accounting. The
resulting adjustments arise from transactions, other events or
conditions before the date of adoption of ASLBs. Therefore, a first-
time adopter should recognise those adjustments to the opening
balance of accumulated surplus or deficit in the period in which the
items are recognised and/or measured (or, if appropriate, another
category of net assets/equity). The first-time adopter should recognise
these adjustments in the earliest period presented.
22. The transitional exemptions and provisions in other ASLB apply to
changes in accounting policies made by an entity that already applies
accrual basis ASLBs. The transitional exemptions and provisions in
this ASLB applies to a first-time adopter that prepares and presents its
annual financial statements on the adoption of, and during the
transition to accrual basis ASLBs.

Exceptions to the Retrospective Application of
ASLBs
23. A first-time adopter’s estimates in accordance with ASLBs at the
date of adoption of ASLBs, should be consistent with estimates
made in accordance with the previous basis of accounting (after
adjustments to reflect any difference in accounting policies),
unless there is objective evidence that those estimates were
inconsistent with the requirements in ASLBs.
24. This ASLB prohibits retrospective application of some aspects of
accrual basis ASLBs. A first-time adopter may receive information
after the date of adoption of ASLBs about estimates that it had made
under its previous basis of accounting. In accordance with paragraph
23, a first-time adopter should treat the receipt of that information in
the same way as non-adjusting events after the reporting period in
accordance with ASLB 14, ‗Events after the Reporting Period’.
25. A first-time adopter may need to make estimates in accordance with
ASLBs at the date of adoption of ASLBs or during the period of
transition that were not required at that date under the previous basis
of accounting. To achieve consistency with ASLB 14, those estimates
in accordance with ASLBs should reflect conditions that existed at the
date of adoption of ASLBs or at the date during the period of

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transition. In particular, estimates determined at the date of adoption
of ASLBs or during the period of transition of market prices, interest
rates should reflect market conditions at that date. For non-financial
assets, such as property, plant and equipment, estimates about the
asset‘s useful life, residual value or condition reflect management‘s
expectations and judgment at the date of adoption of ASLBs or the
date during the period of transition.
26. Paragraphs 23–25 apply to the opening balance sheet. They also
apply to a comparative period where an entity elects to present
comparative information in accordance with paragraph 78, in which
case the references to the date of adoption of ASLBs are replaced by
references to the end of that comparative period.

Fair Presentation and Compliance with ASLBs
27. A first-time adopter’s first ASLB financial statements should fairly
present the financial position, financial performance, and cash
flows of the entity. Fair presentation requires the faithful
representation of the effects of transactions, other events, and
conditions in accordance with the definitions and recognition
criteria for assets, liabilities, revenue, and expenses set out in
ASLBs. If a first-time adopter takes advantage of the exemptions
in paragraphs 36–62, these exemptions will affect the fair
presentation of the financial statements and the first-time
adopter’s ability to assert compliance with accrual basis ASLBs,
until the exemptions that provided the relief have expired and/or
when the relevant items are recognised and/or measured in
accordance with the applicable ASLB (whichever is earlier).
28. A first-time adopter should claim full compliance with ASLBs only
when it has complied with all the requirements of the applicable
ASLBs effective at that date, subject to paragraph 11. If a first -
time adopter adopts one or more of the exemptions in paragraph
36–62, the fair presentation of the financial statements and its
ability to assert compliance with accrual basis ASLBs will be
affected. An entity’s whose financial statements comply with
ASLBs should make an explicit and unreserved statement of such
compliance in the notes. Financial statements should not be
described as complying with ASLBs unless they comply with all

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the requirements of ASLBs, and should be qualified as accrual
basis ASLB complaint financial statements.
29. In accordance with paragraph 29 of ASLB 1 fair presentation is
achieved in virtually all circumstances by compliance with applicable
ASLBs. For a first- time adopter to claim full compliance with ASLBs,
all the requirements of the applicable ASLBs needs to be complied
with to ensure that information is presented in a manner that meets the
qualitative characteristics, subject to paragraph 11.
30. The exemptions in paragraphs 36–62 provide relief from the
recognition, measurement, presentation and/or disclosure
requirements in ASLBs on the date of adoption of ASLBs and during
the period of transition. A first-time adopter may elect to adopt these
exemptions, but should consider that applying these exemptions will
affect the fair presentation of its financial statements and its ability to
assert compliance with accrual basis ASLBs in accordance with
paragraphs 27 and 28 until the exemptions that provided the relief
have expired and/or when the relevant items are recognised,
measured, and/or the relevant information is presented and/or
disclosed in the financial statements in accordance with the applicable
ASLBs (whichever is earlier). Before making use of such exemptions,
a first-time adopter should consider all the relevant facts and
circumstances and the potential effect on its financial statements.
31. A first-time adopter should assess whether the transitional
exemptions adopted affect the fair presentation of the financial
statements and the first-time adopter’s ability to assert
compliance with accrual basis ASLBs.
32. For example, a first-time adopter adopts the three year transitional
relief period for the recognition and measurement of traffic fines
because insufficient data is available about the value of fines issued,
fines written off, the compromises reached with offenders etc. The
relief period is not applied to any other class of non-exchange
revenue. The revenue received from fines is not material in relation to
the financial statements as a whole. The entity concludes that, by
adopting the transitional exemption and provisions, fair presentation
and compliance with ASLBs will not be affected. As a result, the first-
time adopter will still be able to achieve fair presentation and assert
compliance with accrual basis ASLBs at the date of adoption of
accrual basis ASLBs or during the period of transition.

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Exemptions that Affect Fair Presentation and
Compliance with Accrual Basis ASLBs during the
Period of Transition
33. A first-time adopter may adopt the exemptions in paragraphs 36–
62. These exemptions will affect the fair presentation of a first-
time adopter’s financial statements and its ability to assert
compliance with accrual basis ASLBs during the period of
transition in accordance with paragraphs 27 and 28 while they are
applied. A first-time adopter should not apply these exemptions
by analogy to other items.
34. Notwithstanding the exemptions provided in paragraphs 36–62 a
first- time adopter is encouraged to comply in full with all the
requirements of the applicable ASLBs as soon as possible.
35. To the extent that a first-time adopter applies the exemptions in
paragraph 36–62, it is not required to apply any associated
presentation and/or disclosure requirements in the applicable
ASLBs until the exemptions that provided the relief have expired
or the relevant items are recognised and/or measured in the
financial statements in accordance with the applicable ASLBs
(whichever is earlier).
Three Year Transitional Relief Period for the Recognition
and/or Measurement of Assets and/or Liabilities
Recognition and/or Measurement of Assets and/or Liabilities
36. Where a first-time adopter has not recognised assets and/or
liabilities under its previous basis of accounting, it is not required
to recognise and/or measure the following assets and/or liabilities
for reporting periods beginning on a date within three years
following the date of adoption of ASLBs:
(a) Inventories (see ASLB 12, ‘Inventories’);
(b) Investment property (see ASLB 16, ‘Investment Property’);
(c) Property, plant and equipment (see ASLB 17, ‘Property,
Plant and Equipment’);
(d) Defined benefit plans and other long-term employee
benefits (see ASLB 39, ‘Employee Benefits’);

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(e) Biological assets and agricultural produce (see ASLB 27,
‘Agriculture’4);
(f) Intangible assets (see ASLB 31, ‘Intangible Assets’);
(g) Service concession assets and the related liabilities, either
under the financial liability model or the grant of a right to
the operator model (see ASLB 32, ‘Service Concession
Arrangements: Grantor’);
(h) Financial instruments (Refer paragraph 15 of ASLB 3 with
regard to Guidance on ‘Financial Instruments’); and
(i) Social benefits (see ASLB 42, ‘Social Benefits’).
37. Where a first-time adopter applies the exemption in paragraph
36(d), it should recognise the obligation and any related plan
assets at the same time.
38. Where a first-time adopter has recognised the assets and/or
liabilities included in paragraph 36 under its previous basis of
accounting, it is not required to change its accounting policy(ies)
in respect of the measurement of these assets and/or liabilities
for reporting periods beginning on a date within three years
following the date of adoption of ASLBs.
39. Subject to paragraphs 36 and 38, a first-time adopter is not required to
change its accounting policy(ies) in respect of the recognition and/or
measurement of assets and/or liabilities for reporting periods
beginning on a date within three years following the date of adoption of
ASLBs. The transitional exemptions in paragraphs 36 and 38 are
intended to allow a first-time adopter a period to develop reliable 5
models for recognising and/or measuring its assets and/ or liabilities
during the period of transition. The first-time adopter may apply

4 The Guidance with regard to accounting policy for ‗Agriculture‘, if required, may be

obtained from other corresponding pronouncement as per the hierarchy prescribed in
paragraph 15 of the ASLB 3, ‘Accounting Policies, Changes in Accounting Estimates,
and Errors’ till the time ASLB on this subject is not formulated.
5 Information that is reliable is free from material error and bias, and can be depended

on by users to faithfully represent that which it purports to represent or could reasonably
be expected to represent.

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accounting policies for the recognition and/or measurement of such
assets and/or liabilities that do not comply with the provisions of other
ASLBs.
40. Subject to the provisions of paragraphs 36 and 38, a first-time
adopter should only change its accounting policies during the
period of transition to better conform to the accounting policies
in accrual basis ASLBs, and may retain its existing accounting
policies until the exemptions that provided the relief have expired
or when the relevant items are recognised and/or measured in the
financial statements in accordance with the applicable ASLBs
(whichever is earlier). A first-time adopter may change its
accounting policy in respect of the recognition and/or
measurement of assets and/or liabilities on a class-by-class or
category-by-category basis where the use of classes or
categories is permitted in the applicable ASLB.
41. [Refer to Appendix 1]
Recognition and/or Measurement of Non-Exchange Revenue
42. A first-time adopter is not required to change its accounting
policy in respect of the recognition and measurement of non-
exchange revenue for reporting periods beginning on a date
within three years following the date of adoption of ASLBs. A
first-time adopter may change its accounting policy in respect of
revenue from non-exchange transactions on a class-by-class
basis.
43. The transitional provision in paragraph 42 is intended to allow a first-
time adopter a period to develop reliable models for recognising and
measuring revenue from non-exchange transactions in accordance
with ASLB 23, ‗Revenue from Non-Exchange Transactions (Taxes and
Transfers)’ during the period of transition. The first-time adopter may
apply accounting policies for the recognition and/or measurement of
revenue from non-exchange transactions that do not comply with the
provisions of ASLB 23. The transitional provision in paragraph 42
allows a first-time adopter to apply ASLB 23 incrementally to different
classes of revenue from non-exchange transactions. For example, a
first-time adopter may be able to recognise and measure property
taxes and some other classes of transfers in accordance with ASLB 23

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from the date of adoption of ASLBs, but may require three years to
fully develop a reliable model for recognising and measuring income
tax revenue.
Other Exemptions
ASLB 5, ‗Borrowing Costs’
44. Where a first-time adopter applies the exemption in paragraph 36
which allows a three year transitional relief period to not
recognise and/or measure assets, and, it is not required to
capitalise any borrowing costs on qualifying assets for which the
commencement date for capitalisation is prior to the date of
adoption of accrual basis ASLBs, until the exemption that
provided the relief has expired and/or when the relevant assets
are recognised and/or measured in accordance with the
applicable ASLBs (whichever is earlier).
45. Paragraph 36 allows a first-time adopter to not, recognise and/or
measure assets in accordance with ASLBs 16, 17, 27, 31 and 32 for a
period of up to three years from the date of adoption of ASLBs. During
this period, a first-time adopter may need to consider the requirements
of those ASLBs at the same time as the capitalisation of borrowing
costs. Where a first-time adopter takes advantage of the transitional
exemption period for the recognition and/or measurement of assets in
accordance with ASLBs 16, 17, 27, 31 and 32 it is not required to
capitalise borrowing costs incurred on qualifying assets prior, or during
the period of transition. Only when the exemptions that provided the
relief have expired, and/or when the relevant assets are recognised
and/or measured in accordance with the applicable ASLBs (whichever
is earlier) will a first-time adopter be allowed to capitalise borrowing
costs incurred on the qualifying assets in accordance with the
requirement of ASLB 5.
ASLB 13, ‗Leases‘
46. Where a first-time adopter takes advantage of the exemption in
paragraph 36 which allows a three year transitional relief period
to not recognise assets, it is not required to apply the
requirements related to finance leases until the exemption that
provided the relief has expired, and/or when the relevant assets
are recognised in accordance with the applicable ASLBs

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(whichever is earlier).
47. This ASLB allows a first-time adopter a period of up to three years
from the date of adoption of ASLBs to not recognise assets in
accordance with ASLBs 16, 17, 27, 31 and 32. During this period, a
first-time adopter may need to consider the recognition requirements
of those ASLBs at the same time as considering the recognition of
finance leases in this ASLB. Where a first-time adopter takes
advantage of the exemption in accordance with ASLBs 16, 17, 27, 31
and 32 it is not required to recognise finance lease assets and/or
liabilities until the exemptions that provided the relief have expired,
and/or when the relevant assets are recognised in accordance with the
applicable ASLBs (whichever is earlier).
ASLB 19, ‗Provisions, Contingent Liabilities and Contingent Assets’
48. Where a first-time adopter takes advantage of the exemption in
paragraph 36 which allows a three year transitional relief period
to not recognise and/or measure property, plant and equipment, it
is not required to recognise and/ or measure the liability relating
to the initial estimate of costs of dismantling and removing the
item and restoring the site on which it is located until the
exemption for ASLB 17 has expired, and/or the relevant asset is
recognised and/or measured in accordance with ASLB 17
(whichever is earlier).
49. This ASLB allows a first-time adopter a period of up to three years
from the date of adoption of ASLBs to not recognise and/or measure
property, plant and equipment. ASLB 17 requires an entity to include
as part of the cost of an item of property, plant and equipment, the
initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located. Where a first-time adopter
takes advantage of the exemption that allows a three year transitional
relief period for the recognition and/or measurement of property, plant
and equipment, a first-time adopter is not required to apply the
requirements related to the initial estimate of costs of dismantling and
removing the item and restoring the site on which it is located until the
exemption that provided the relief has expired, and/or when the
relevant asset is recognised and/or measured in accordance with
ASLB 17 (whichever is earlier). The liability should be measured as at

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the date of adoption of ASLBs, or where a first-time adopter has taken
advantage of the exemption that allows a three year transitional relief
period for the recognition and/or measurement of an asset, the date on
which the exemption that provides the relief has expired and/or the
asset has been recognised and/ or measured in accordance with the
applicable ASLBs.
50. Where a first-time adopter takes advantage of the exemption in
paragraph 48, it should recognise and/or measure the obligation
and any related asset at the same time.
ASLB 20, ‗Related Party Disclosures’
51. A first-time adopter is not required to disclose related party
relationships, related party transactions and information about
key management personnel for reporting periods beginning on a
date within three years following the date of adoption of ASLBs.
52. Notwithstanding the transitional provision in paragraph 51, a first-
time adopter is encouraged to disclose information about related
party relationships, related party transactions and information
about key management personnel that is known at the date of
adoption of ASLB.
ASLB 34, ‘Separate Financial Statements’, ASLB 35, ‘Consolidated Financial
Statements’ and ASLB 36, ‘Investments in Associates and Joint Ventures’6
53. Where a first-time adopter has not recognised its interests in
controlled entities, associates or joint ventures under its previous
basis of accounting, it is not required to recognise and/or
measure its interests in other entities as a controlled entity,
associate or joint venture for reporting periods beginning on a
date within three years following the date of adoption of accrual
basis ASLB.
54. Subject to paragraph 53, a first-time adopter is not required to change

6 Consolidation may not be applicable to local bodies in current scenario, therefore,

ASLB 35 is not yet formulated/issued. However, the provisions pertaining to
consolidation have been retained. The Guidance with regard to ‗Consolidated financial
Statements‘, if required, may be obtained from other corresponding pronouncement as
per the hierarchy prescribed in paragraph 15 of the ASLB 3, ‘Accounting Policies,
Changes in Accounting Estimates, and Errors’ till the time ASLB 35 is not formulated.

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its accounting policy in respect of the recognition and/or measurement
of its interests in controlled entities, associates or joint ventures for
reporting periods beginning on a date within three years following the
date of adoption of ASLBs. The transitional exemption in paragraph 53
is intended to allow a first-time adopter a period to identify and
appropriately classify its interests in other entities as either controlled
entities, associates or joint ventures during the period of transition.
The first-time adopter may apply accounting policies for the
recognition and/or measurement of its interests in controlled entities,
associates or joint ventures that do not comply with the provisions of
other ASLBs.
ASLB 35, ‗Consolidated Financial Statements’
55. Subject to paragraph 53, a first-time adopter should present
consolidated financial statements following the adoption of
accrual basis ASLBs. A first-time adopter presenting
consolidated financial statements is, however, not required to
eliminate all balances, transactions, revenue and expenses
between entities within the economic entity for reporting periods
beginning on a date within three years following the date of
adoption of ASLBs.
56. On adoption of ASLBs, an entity may have controlled entities with a
significant number of transactions between controlled entities.
Accordingly, it may be difficult to identify some transactions and
balances that need to be eliminated for the purpose of preparing the
consolidated financial statements of the economic entity. For this
reason, paragraph 55 provides relief for a period of up to three years
to fully eliminate balances, transactions, revenue and expenses
between entities within the economic entity.
57. Notwithstanding the transitional exemption in paragraph 55, a
first-time adopter is encouraged to eliminate those balances,
transactions, revenue and expenses that are known on the date of
adoption of ASLBs to comply in full with the provisions of ASLB
35 as soon as possible.
58. Where a first-time adopter has taken advantage of the transitional
exemption in paragraph 53 and/or paragraph 55, it should not
present financial statements as consolidated financial statements

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until:
(a) The exemptions that provided the relief have expired; and
(b) Its interests in other entities have been appropriately
recognised and/or measured as controlled entities,
associates or joint ventures; or
(c) Inter-entity balances, transactions, revenue and expenses
between entities within the economic entity are eliminated
(whichever is earlier).
ASLB 36, ‘Investments in Associates and Joint Ventures’
59. When a first-time adopter applies the equity method on adoption
of ASLB 36, the investor is not required to eliminate its share in
the surplus and deficit resulting from upstream and downstream
transactions between the investor and its associate or joint
venture for reporting periods beginning on a date within three
years following the date of adoption of ASLBs.
60. On adoption of ASLBs, a first-time adopter may be an investor in one
or more associates or joint ventures with a significant number of
upstream and downstream transactions between the investor and the
investee. Accordingly, it may be difficult to identify some upstream
and/or downstream transactions in which the investor‘s share in the
associate‘s or joint venture‘s surplus or deficit needs to be eliminated
in applying the equity method. For this reason, paragraph 59 provides
the investor relief with a period of up to three years to fully eliminate
its share in the associate‘s or joint venture‘s surplus or deficit resulting
from upstream and/or downstream transactions.
61. Notwithstanding the transitional exemption in paragraph 59, a
first-time adopter is encouraged to eliminate its share in the
associate’s and joint venture’s surplus and deficit resulting from
upstream and downstream transactions that are known on the
date of adoption of ASLBs, to comply in full with the provisions of
ASLB 36 as soon as possible.
62. Where a first-time adopter has taken advantage of the transitional
exemption in paragraph 53 and/or paragraph 59, it should not
present financial statements in which investments in associates
or joint ventures are accounted for using the equity method until:
(a) The exemptions that provided the relief have expired; and

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(b) The interest in other entities have been appropriately
recognised and/or measured as an associate or joint
venture; or
(c) Its share in the associate’s surplus and deficit resulting
from upstream and downstream transactions between the
investor and the investee are eliminated (whichever is
earlier).
ASLB 40, ‘Entity Combinations’7
62A. Where a first-time adopter applies the exemption in paragraph 36
which allows a three year transitional relief period to not
recognise and/or measure assets and/or liabilities, the first-time
adopter may be a party to an entity combination during that three
year transitional relief period. The first-time adopter is not
required to recognise and/or measure the assets and/or liabilities
associated with the entity combination, until the exemption that
provided the relief has expired and/or when the relevant assets
and/or liabilities are recognised and/or measured in accordance
with the applicable ASLBs (whichever is earlier).
62B. Where a first-time adopter applies the exemption in paragraph
62A it should not recognise goodwill in respect of an acquisition.
The first-time adopter should recognise the difference between (a)
and (b) below in net assets/equity:
(a) The aggregate of:
(i) Any consideration transferred;
(ii) Any non-controlling interests in an acquired
operation; and
(iii) Any previously held equity interests in an acquired
operation.
(b) The net amounts of any identifiable assets acquired and the
liabilities assumed.

7 The Guidance with regard to ‗Entity Combination‘, if required, may be obtained from

other corresponding pronouncement as per the hierarchy prescribed in paragraph 15 of
the ASLB 3, ‘Accounting Policies, Changes in Accounting Estimates, and Errors’ till the
time ASLB 40 is not formulated.

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62C. ASLB 40 is applied prospectively. Consequently, a first-time adopter
does not adjust any amounts of goodwill recognised as a result of an
entity combination that occurred prior to the application of ASLB 40.

Exemptions that Do Not Affect Fair Presentation
and Compliance with Accrual Basis ASLBs During
the Period of Adoption
63. A first-time adopter is required, or may elect, to adopt the
exemptions in paragraphs 64–134. These exemptions will not
affect the fair presentation of a first-time adopter’s financial
statements and its ability to assert compliance with accrual basis
ASLBs during the period of transition in accordance with
paragraphs 27 and 28 while they are applied. A first-time adopter
should not apply these exemptions by analogy to other items.
Using Deemed Cost to Measure Assets and/or Liabilities
64. A first-time adopter may elect to measure the following assets
and/or liabilities at their municipal value calculated as per
respective state accounting/asset valuation manual when reliable
cost information about the assets and liabilities is not available,
and use that value as the deemed cost for:
(a) Inventory (see ASLB 12);
(b) Investment property, if the first-time adopter elects to use
the cost model in ASLB 16;
(c) Property, plant and equipment (see ASLB 17);
(d) Intangible assets, other than internally generated intangible
assets (see ASLB 31) that meets the recognition criteria in
ASLB 31 (excluding the reliable measurement criterion);
(e) Financial Instruments; or
(f) Service concession assets (see ASLB 32).
65. Deemed cost can only be determined where the acquisition cost of the
asset and/ or the liability is not available. Deemed cost assumes that
the entity had initially recognised the asset and/ or the liability at the
given date. Subsequent depreciation or amortisation is based on that

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deemed cost on the premise that the acquisition cost is equal to the
deemed cost. For example, a first-time adopter may elect to measure
property, plant and equipment at deemed cost at the date of adoption
of ASLBs because cost information about the item of property, plant
and equipment was not available on that date, and use value as per
paragraph 64 as its deemed cost at that date. Any subsequent
depreciation is based on that value determined at that date and starts
from the date that the deemed cost has been determined.
66. [Refer to Appendix 1]
67. [Refer to Appendix 1]
68. A first-time adopter may have established a deemed cost in
accordance with its previous basis of accounting for property, plant
and equipment by measuring it at value as stated in paragraph 64 at
one particular date because of a specific event:
(a) If the measurement date is at or before the date of adoption of
ASLBs, a first-time adopter may use such event-driven value
measurements as deemed cost for ASLBs at the date of that
measurement.
(b) If the measurement date is after the date of adoption of ASLBs,
but during the period of transition where the first-time adopter
takes advantage of the exemption that provides a three year
transitional relief period to not recognise and/or measure certain
assets, the such event-driven value measurements may be
used as deemed cost when the event occurs. A first-time
adopter should recognise the resulting adjustments directly in
accumulated surplus or deficit when the asset is recognised
and/or measured.
69. [Refer to Appendix 1]
70. [Refer to Appendix 1]
Using Deemed Cost to Measure Assets Acquired
Through a Non-Exchange Transaction
71. A first-time adopter may elect to measure an asset acquired
through a non-exchange transaction in accordance with ASLB 23,
‘Revenue from Non-Exchange Transactions (taxes & transfers)’.

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Using Deemed Cost for Investments in Controlled
Entities, Joint Ventures and Associates (ASLB 34)
72. Where a first-time adopter measures an investment in a controlled
entity, joint venture or associate at cost in its separate financial
statements, it may, on the date of adoption of ASLBs, elect to
measure that investment at one of the following amounts in its
separate balance sheet:
(a) Cost; or
(b) Deemed cost. The deemed cost of such an investment
should be its fair value at the first-time adopter’s date of
adoption of ASLBs in its separate financial statements.
73. A first-time adopter may have established a deemed cost in
accordance with its previous basis of accounting for an investment in a
controlled entity, joint venture or associate by measuring it at its fair
value at one particular date because of a specific event. In such
instances, a first-time adopter applies paragraph 72(a) and (b).
Date at which Deemed Cost can be Determined
74. The date at which deemed cost is determined may vary depending
on whether the first-time adopter takes advantage of the
exemptions that provides a three year transitional relief period to
not recognise and/or measure certain assets and/or liabilities.
When the first-time adopter takes advantage of the exemption,
deemed cost can be determined at any date during this period, or
on the date that the exemption expires (whichever is earlier), and
should be recognised in accordance with paragraph 76. If a first-
time adopter does not adopt the exemption, deemed cost should
be determined at the beginning of the earliest period for which
the first-time adopter presents ASLB financial statements.
75. Where a first-time adopter takes advantage of the exemption that
provides a three year transitional relief period to not recognise and/or
measure certain assets and/or liabilities, it may determine a deemed
cost for that asset and/or liability at any point of time within the three
year transitional relief period.
76. When a deemed cost is determined during the period in which a
first-time adopter takes advantage of the exemption that provides

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a three year transitional exemption not to recognise and/or
measure an asset and/or liability, a first-time adopter should
recognise the adjustment against the opening accumulated
surplus or deficit in the year in which the deemed cost of the
asset and/or liability is recognised and/or measured.
ASLB 1, ‘Presentation of Financial Statements’
Comparative Information
77. A first-time adopter is encouraged, but not required, to present
comparative information in its first transitional ASLB financial
statements or its first ASLB financial statements presented in
accordance with this ASLB. When a first-time adopter presents
comparative information, it should be presented in accordance
with the requirements of ASLB 1.
78. Where a first-time adopter elects to present comparative
information, the transitional ASLB financial statements or the first
ASLB financial statements presented in accordance with this
ASLB should include:
(a) One balance sheet with comparative information for the
preceding period, and an opening balance sheet as at the
beginning of the reporting period prior to the date of
adoption of accrual basis ASLB;
(b) One income and expenditure statement with comparative
information for the preceding period;
(c) [Refer to Appendix 1];
(d) One cash flow statement with comparative information for
the preceding period;
(e) A comparison of budget and actual amounts for the current
year as a separate additional financial statement or as a
budget column in the financial statements if the first-time
adopter makes its approved budget publicly available; and
(f) Related notes including comparative information, and the
disclosure of narrative information about material
adjustments as required by paragraph 142.
79. Where a first-time adopter elects to not present comparative
information, its transitional ASLB financial statements following

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the adoption of accrual basis ASLBs or its first ASLB financial
statements presented in accordance with this ASLBs should
include:
(a) One balance sheet, and an opening balance sheet at the
date of adoption of accrual basis ASLB;
(b) One income and expenditure statement;
(c) [Refer to Appendix 1];
(d) One cash flow statement;
(e) A comparison of budget and actual amounts for the current
year as a separate additional financial statement or as a
budget column in the financial statements if the first-time
adopter makes its approved budget publicly available; and
(f) Related notes and the disclosure of narrative information
about material adjustments as required by paragraph 142.
80. Where a first-time adopter takes advantage of the exemptions in
paragraphs 36–62 which allow a three year transitional relief
period to not recognise and/or measure an item, comparative
information for the year following the date of adoption of ASLBs
should be adjusted only when information is available about the
items following their recognition and/or measurement during the
relief period.
81. ASLB 1 requires an entity to present comparative information in
respect of the previous period for all amounts reported in the financial
statements. Where a first-time adopter takes advantage of the
exemption that provides a three year transitional exemption to not
recognise and/or measure an item, it should, during the period of
transition present comparative information for an item recognised
and/or measured during that period only, if information is available
about the item for the comparative period. The first-time adopter
should apply the requirements in ASLB 1 after it has adjusted its first
ASLB financial statements.
Non-ASLB Comparative Information
82. A first-time adopter may present comparative information in
accordance with its previous basis of accounting. In any financial

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statements containing comparative information in accordance with the
previous basis of accounting, the first-time adopter should label the
information prepared using the previous basis of accounting
information as not being prepared in accordance with ASLBs, and
disclose the nature of the main adjustments that would be required to
comply with ASLBs.
83. Where a first-time adopter presents non-ASLB comparative
information in its first ASLB or first transitional ASLB financial
statements following its adoption of accrual basis ASLBs, the
transitional exemptions and provisions provided in this Standard
should not be applied to the non-ASLB comparative information
presented in the first ASLB financial statements or first transitional
ASLB financial statements.
Non-ASLB Historical Summaries
84. A first-time adopter may elect to present historical summaries of
selected data for periods before the first period for which it presents
financial statements in accordance with ASLBs. This ASLB does not
require such summaries to comply with the recognition and
measurement requirements of ASLBs. In any financial statements
containing historical summaries in accordance with the previous basis
of accounting, the first-time adopter should label the previous basis of
accounting information prominently as not being prepared in
accordance with ASLBs, and disclose the nature of the main
adjustments that would be required to comply with ASLBs. The first-
time adopter need not quantify those adjustments.
ASLB 4, ‘The Effects of Changes in Foreign Exchange Rates 8’
85. On the date of adoption of ASLBs a first-time adopter need not
comply with the requirements for cumulative translation
differences that exist at that date. If a first-time adopter uses this
exemption:
(a) The cumulative translation differences for all foreign
operations are deemed to be zero at the date of adoption of
ASLBs; and

8 The concept of foreign operations may not be relevant for local bodies in current

scenario. However, the provisions pertaining to this concept have been retained.

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(b) The gain or loss on a subsequent disposal of any foreign
operation should exclude translation differences that arose
before the date of adoption of ASLBs and should include
later translation differences.
86. A first-time adopter should apply the requirement to treat any
goodwill (see ASLB 40) arising on the acquisition of a foreign
operation and any fair value adjustments to the carrying amounts
of assets and liabilities arising on the acquisition of that foreign
operation, as assets and liabilities of the foreign operation,
prospectively on the date of adoption of ASLBs.
87. In applying the transitional exemption in paragraph 85, a first-time
adopter should not restate prior years for the acquisition of a foreign
operation acquired prior to the date of adoption of ASLBs, and
accordingly should, where appropriate, treat goodwill and fair value
adjustments arising on acquisition as assets and liabilities of the entity
rather than as assets and liabilities of the foreign operation. Therefore,
those goodwill and fair value adjustments either are already expressed
in the entity‘s functional currency or are non-monetary foreign currency
items, which are reported using the exchange rate at the date of the
acquisition.
ASLB 5, ‘Borrowing Costs’
88-89. [Refer to Appendix 1]
90. A first-time adopter should apply the requirements in ASLB 5
prospectively from the date of adoption of ASLBs.
91-94. [Refer to Appendix 1]
ASLB 13, ‘Leases’
95. A first-time adopter should on the date of adoption of ASLB,
classify all existing leases as operating or finance leases on the
basis of circumstances existing at the inception of the lease, to
the extent that these are known on the date of adoption of ASLBs.
96. If, however, the lessee and the lessor have agreed to change the
provisions of the lease between the date of inception of the lease
and the date of adoption of accrual basis ASLBs in a manner that
would have resulted in a different classification of the lease at the

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date of adoption, the revised agreement should be regarded as a
new agreement. A first-time adopter should consider the
provisions of the new agreement at the date of adoption of
accrual basis ASLBs in classifying the lease as an operating or
finance lease.
ASLB 18, ‘Segment Reporting’
97. A first-time adopter is not required to present segment
information for reporting periods beginning on a date within three
years following the date of adoption of ASLBs.
ASLB 21, ‘Impairment of Non-Cash-Generating Assets’
98. A first-time adopter should apply the requirements in ASLB 21
prospectively from the date of adoption of ASLBs, except in
relation to those assets where a first-time adopter takes
advantage of the exemption in paragraph 36 which allows a three
year transitional relief period to not recognise and/or measure
assets. When a first-time adopter takes advantage of the
exemption that provides a three year transitional relief period in
ASLB 16, 17, 27, 31 and 32, it applies ASLB 21 when the
exemption that provided the relief has expired, and/or the relevant
assets are recognised and/or measured in accordance with the
applicable ASLBs (whichever is earlier).
99. On the date that the transitional exemption that provided the relief
has expired, and/or when the relevant assets are recognised
and/or measured in the financial statements (whichever is earlier),
a first-time adopter should assess whether there is any indication
that the non-cash-generating assets recognised and/or measured
are impaired. Any impairment loss should be recognised in
opening accumulated surplus or deficit on the date of adoption of
ASLBs, or in opening accumulated surplus or deficit in the
reporting period in which the transitional exemption expires,
and/or the relevant assets are recognised and/or measured
(whichever is earlier).
100. A first-time adopter should apply the requirements of ASLB 21
prospectively. This means that on the date of adoption of accrual basis
ASLBs, or if the first- time adopter has adopted transitional relief

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relating to the recognition and/ or measurement of assets, only when
the three year transitional exemption expires, and/or when the relevant
assets are recognised and/or measured in the financial statements
(whichever is earlier), will a first-time adopter be required to assess
whether there is an indication that any non-cash-generating assets
included in the opening balance sheet, are impaired.
ASLB 39, ‘Employee Benefits’
101. A first-time adopter should recognise and/or measure all
employee benefits on the date of adoption of ASLBs, except for
defined benefit plans and other long-term employee benefits
where it takes advantage of the exemption in paragraph 36.
Defined Benefit Plans and Other Long-Term Employee Benefits
102. On the date of adoption of ASLBs, or where a first-time adopter
takes advantage of the three year transitional exemption, the date
on which the exemption expires, or when the relevant liabilities
are recognised and/or measured in the financial statements
(whichever is earlier), a first-time adopter should determine its
initial liability for defined benefit plans and other long-term
employee benefits at that date as:
(a) The present value of the obligation at the date of adoption
of ASLBs, or where a first-time adopter takes advantage of
the three year transitional relief period, the date on which
the exemption expires, or when the relevant liabilities are
recognised and/or measured in the financial statements
(whichever is earlier), by using the Projected Unit Credit
Method; and
(b) Minus the fair value, at the date of adoption of ASLBs, or
where a first-time adopter takes advantage of the three year
transitional relief period, the date on which the exemption
expires, or when the relevant liabilities are recognised
and/or measured in the financial statements (whichever is
earlier) of plan assets (if any) out of which the obligations
are to be settled directly.
(c) [Deleted]

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103. If the initial liability in accordance with paragraph 102 is more or
less than the liability that was recognised and/or measured at the
end of the comparative period under the first-time adopter’s
previous basis of accounting, the first-time adopter should
recognise that increase/decrease in opening accumulated surplus
or deficit in the period in which the items are recognised and/or
measured.
104. The effect of the change in the accounting policy to ASLB 39 includes
any remeasurements that arose, if any, in earlier periods. Under its
previous basis of accounting, a first-time adopter may not have
recognised and/or measured any liability, in which case the increase in
the liability will represent the full amount of the liability minus the fair
value, at the date of adoption of ASLBs or where a first-time adopter
takes advantage of the three year transitional relief period, the date on
which the exemption expires, or when the relevant liabilities are
recognised and/or measured in the financial statements (whichever is
earlier), of any plan assets in accordance with paragraph 102(b). This
increased liability is recognised in opening accumulated surplus or
deficit in the period in which the items are recognised and/or
measured.
105. A first-time adopter should recognise all cumulative
remeasurements in opening accumulated surplus or deficit in the
period in which the items are recognised and/or measured.
106. [Deleted]
107. [Deleted]
ASLB 26, ‘Impairment of Cash-Generating Assets’
108. A first-time adopter should apply the requirements in ASLB 26
prospectively from the date of adoption of ASLBs, except in
relation to those assets where a first-time adopter takes
advantage of the exemption in paragraph 36 which allows a three
year transitional relief period to not recognise and/or measure
assets. When a first-time adopter takes advantage of the
exemption that provides a three year transitional relief period in
ASLBs 16, 17, 27, 31 and 32, it applies ASLB 26 when the
exemption that provided the relief has expired, and/or the relevant

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assets are recognised and/or measured in accordance with the
applicable ASLBs (whichever is earlier).
109. On the date that the transitional exemption that provided the relief
has expired, and/or when the relevant assets are recognised
and/or measured in the financial statements (whichever is earlier),
a first-time adopter should assess whether there is any indication
that the cash-generating assets recognised and/or measured are
impaired. Any impairment loss should be recognised in opening
accumulated surplus or deficit on the date of adoption of ASLBs,
or in opening accumulated surplus or deficit in the reporting
period in which the transitional exemption expires, and/or the
relevant assets are recognised and/or measured (whichever is
earlier).
110. A first-time adopter should apply the requirements of ASLB 26
prospectively. This means that on the date of adoption of accrual basis
ASLBs, or if the first- time adopter has adopted the transitional relief
relating to the recognition and/ or measurement of assets, only when
the three year transitional exemption expires, and/or when the relevant
assets are recognised and/or measured in the financial statements
(whichever is earlier), will a first-time adopter be required to assess
whether there is an indication that any cash-generating assets
included in the opening balance sheet, are impaired.
111-124. [Refer to Appendix 1]
ASLB 31, ‘Intangible Assets’
125. A first-time adopter should recognise and/or measure an
internally generated intangible asset if it meets the definition of
an intangible asset and the recognition criteria in ASLB 31, even
if the first-time adopter has, under its previous basis of
accounting, expensed such costs. A deemed cost may not be
determined for internally generated intangible assets.
126. As required by paragraph 20, a first-time adopter is required to
recognise all assets for which recognition is required by ASLBs. A first-
time adopter should therefore recognise any internally generated
intangible asset if it meets the definition of an intangible asset and the
recognition criteria in ASLB 31, irrespective of whether such costs
were expensed under its previous basis of accounting.

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ASLB 32, ‘Service Concession Arrangements: Grantor’
Initial Measurement of Related Liability
127. Where a first-time adopter elects to measure service concession
assets using deemed cost, the related liabilities should be
measured as follows:
(a) For the liability under the financial liability model, the
remaining contractual cash flows specified in the binding
arrangement and the rate prescribed in ASLB 32; or
(b) For the liability under the grant of a right to the operator
model, the fair value of the asset less any financial
liabilities, adjusted to reflect the remaining period of the
service concession arrangement.
128. A first-time adopter should recognise and/or measure any
difference between the value of the service concession asset and
the financial liability under the financial liability model in
paragraph 127 in opening accumulated surplus or deficit in the
period in which the items are recognised and/or measured.
ASLB 34, ‘Separate Financial Statements’, ASLB 35,
‘Consolidated Financial Statements’ and ASLB 36,
‘Investments in Associates and Joint Ventures’
129. If a controlled entity becomes a first-time adopter later than its
controlling entity, except for the controlled entity of an
investment entity, the controlled entity should, in its financial
statements, measure its assets and liabilities at either:
(a) The carrying amounts determined in accordance with this
ASLB that would be included in the controlling entity’s
consolidated financial statements, based on the controlled
entity’s date of adoption of ASLBs, if no adjustments were
made for consolidation procedures and for the effects of
the entity combination in which the controlling entity
acquired the controlled entity; or
(b) The carrying amounts required by the rest of this ASLB,
based on the controlled entity’s date of adoption of ASLBs.
These carrying amounts could differ from those described
in (a):

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(i) When the exemptions in this ASLB result in
measurements that depend on the date of adoption of
ASLBs.
(ii) When the accounting policies used in the controlled
entity’s financial statements differ from those in the
consolidated financial statements. For example, the
controlled entity may use as its accounting policy the
cost model in ASLB 17, whereas the economic entity
may use the revaluation model.
A similar election is available to an associate or joint venture that
becomes a first-time adopter later than an entity that has
significant influence or joint control over it.
130. However, if a controlling entity becomes a first-time adopter later
than its controlled entity (or associate or joint venture) the
controlling entity should, in its consolidated financial statements,
measure the assets and liabilities of the controlled entity (or
associate or joint venture) at the same carrying amounts as in the
financial statements of the controlled entity (or associate or joint
venture), after adjusting for consolidation and equity accounting
adjustments and for the effects of the entity combination in which
the controlling entity acquired the controlled entity (or associate
or joint venture), subject to the exemptions that may be adopted
in terms of this ASLB. Similarly, if a controlled entity becomes a
first-time adopter for its separate financial statements earlier or
later than for its consolidated financial statements, it should
measure its assets and liabilities at the same amounts in both
financial statements, subject to the exemptions that may be
adopted in this ASLB, except for consolidation adjustments.
ASLB 35, ‘Consolidated Financial Statements’
131. A first-time adopter that is a controlled entity should assess
whether it is an investment entity on the basis of the facts and
circumstances that exist at the date of adoption of accrual basis
ASLBs, and measure its investment in each controlled entity at
fair value through surplus or deficit at the date of adoption of
accrual basis ASLBs.

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ASLB 37, ‘Joint Arrangements 9’
132. Where a first-time adopter accounted for its investment in a joint
venture under its previous basis of accounting basis using
proportionate consolidation, the investment in the joint venture
should be measured on the date of adoption as the aggregate of
the carrying amount of the assets and liabilities that the entity
previously proportionately consolidated, including any purchased
goodwill arising from acquisition transactions (see ASLB 40).
133. The opening balance of the investment determined in accordance
with paragraph 132 is regarded as the deemed cost of the
investment at initial recognition. A first-time adopter should test
the investment for impairment as at the date of adoption,
regardless of whether there is any indication that the investment
may be impaired. Any impairment loss should be adjusted to the
accumulated surplus or deficit at the date of adoption.
134. If aggregating all previously proportionately consolidated assets
and liabilities results in negative net assets, the first-time adopter
should assess whether it has legal or constructive obligations in
relation to the negative net assets and, if so, the first-time adopter
should recognise a corresponding liability. If the first-time
adopter concludes that it does not have legal or constructive
obligations in relation to the negative net assets, it should not
recognise the corresponding liability but it should adjust
accumulated surplus or deficit at the date of adoption. The first-
time adopter should disclose this fact, along with its cumulative
unrecognised share of losses of its joint ventures as at the date
of adoption of accrual basis ASLBs.
ASLB 42, ‘Social Benefits’
134A. A first-time adopter should apply the requirements in ASLB 42
prospectively from the date of adoption of ASLBs. On the date of
adoption of ASLBs, or where a first-time adopter takes advantage

9 The Guidance with regard to ‗Joint Arrangements‘, if required, may be obtained from

other corresponding pronouncement as per the hierarchy prescribed in paragraph 15 of
the ASLB 3, ‘Accounting Policies, Changes in Accounting Estimates, and Errors’ till the
time ASLB on this subject is not formulated.

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of the three year transitional exemption, the date on which the
exemption expires, or when the relevant liabilities are recognised
and/or measured in the financial statements (whichever is earlier),
a first-time adopter should determine its initial liability for a social
benefit scheme at that date in accordance with ASLB 42.
134B. If the initial liability in accordance with paragraph 134A is more or
less than the liability that was recognised and/or measured at the
end of the comparative period under the first-time adopter’s
previous basis of accounting, the first-time adopter should
recognise that increase/decrease in opening accumulated surplus
or deficit in the period in which the items are recognised and/or
measured.

Disclosures
135. A first-time adopter with financial statements that comply with the
requirements of this ASLB while taking advantage of the
transitional exemptions and provisions that affect fair
presentation and its ability to assert compliance with accrual
basis ASLBs, should make an explicit and unreserved statement
of compliance with this ASLB in the notes to the financial
statements. This statement should be accompanied by a
statement that the financial statements do not fully comply with
accrual basis ASLBs.
136. Where a first-time adopter takes advantage of the transitional
exemptions in this ASLB, the first-time adopter should disclose:
(a) The extent to which it has taken advantage of the
transitional exemptions that affect the fair presentation of
the financial statements and its ability to assert compliance
with accrual basis ASLBs; and/or
(b) The extent to which it has taken advantage of the
transitional exemptions that do not affect the fair
presentation of the financial statements and its ability to
assert compliance with accrual basis ASLBs.
137. To the extent that a first-time adopter has taken advantage of the
transitional exemptions and provisions in this ASLB that affect
fair presentation and compliance with accrual basis ASLBs in

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relation to assets, liabilities, revenue and/or expenses, it should
disclose:
(a) Progress made towards recognising, measuring, presenting
and/or disclosing assets, liabilities revenue and/or
expenses in accordance with the requirements of the
applicable ASLB;
(b) The assets, liabilities, revenue and/or expenses that have
been recognised and measured under an accounting policy
that is not consistent with the requirements of applicable
ASLB;
(c) The assets, liabilities, revenue and/or expenses that have
not been measured, presented and/or disclosed in the
previous reporting period, but which are now recognised
and/or measured, and/or presented and/or disclosed;
(d) The nature and amount of any adjustments recognised
during the reporting period; and
(e) An indication of how and by when it intends to comply in
full with the requirements of the applicable ASLB.
138. Where a first-time adopter takes advantage of the transitional
exemption to not eliminate some balances, transactions, revenue
and expenses, and/ or where it applies the three year transitional
relief for the recognition and/or measurement of its interest in
controlled entities, associates or joint ventures in paragraph 55, it
should disclose the nature of the balances, transactions, revenue
and expenses and/or upstream or downstream transactions that
have been eliminated during the reporting period.
139. Where a first-time adopter is not able to present consolidated
financial statements because of the transitional exemptions and
provisions adopted in paragraphs 58 or 62, it should disclose:
(a) The reason why the financial statements, investments in
associates or interests in joint ventures could not be
presented as consolidated financial statements; and
(b) An indication by when the first-time adopter will be able to
present consolidated financial statements.

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140. The disclosure requirements of paragraphs 135 and 139 will
assist users to track the progress of the first-time adopter in
conforming its accounting policies to the requirements in the
applicable ASLBs during the period of transition.
Explanation of Transition to ASLBs
141. A first-time adopter should disclose:
(a) The date of adoption of ASLBs; and
(b) Information and explanations about how the transition from
the previous basis of accounting to ASLBs affected its
reported financial position, and, where appropriate, its
reported financial performance and cash flows.
Reconciliations
142. A first-time adopter should present in the notes to its transitional
ASLB financial statements or its first ASLB financial statements:
(a) A reconciliation of its net assets/equity reported in
accordance with its previous basis of accounting to its
opening balance of net assets/equity at the date of adoption
of ASLBs; and
(b) A reconciliation of its surplus or deficit in accordance with its
previous basis of accounting to its opening balance of surplus or
deficit at the date of adoption of ASLBs.
A first-time adopter that has applied a cash basis of accounting in
its previous financial statements is not required to present such
reconciliations.
143. The reconciliation presented in accordance with paragraph 142 should
provide sufficient detail, both quantitative and qualitative, to enable
users to understand the material adjustments to the opening balance
sheet and, where applicable, the restated comparative income and
expenditure statement presented in accordance with accrual basis
ASLB.
144. If an entity becomes aware of errors made under its previous basis of
accounting, the reconciliations required by paragraph 142 should
distinguish the correction of those errors from changes in accounting
policies.

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145. If an entity did not present financial statements for previous
periods, its transitional ASLB financial statements or its first
ASLB financial statements should disclose that fact.
146. Where a first-time adopter takes advantage of the exemptions in
paragraphs 36–43 which allow a three year transitional relief
period to not recognise and/or measure items, it should present
as part of the notes, a reconciliation of items that have been
recognised and/or measured during the reporting period when
these items were not included in the previous reported financial
statements. The reconciliation should be presented in each
period when new items are recognised and/or measured in
accordance with this ASLB.
147. The reconciliation presented in accordance with paragraph 146
provides sufficient detail to enable users to understand which items
have been recognised and/or measured during the reporting period
where the first-time adopter adopts one of more of the exemptions that
provide a three year transitional relief period to not recognise and/or
measure an item. The reconciliation explains the adjustments to the
previously reported balance sheet and, where applicable, the
previously reported income and expenditure statement in each period
when new items are recognised and/or measured in accordance with
this ASLB.
148. [Refer to Appendix 1]
Disclosures Where Deemed Cost is Used for Investments
in Controlled Entities, Joint Ventures or Associates
149. If a first-time adopter uses fair value as deemed cost in its
opening balance sheet for an investment in a controlled entity,
joint venture or associate in its separate financial statements, its
separate financial statements should disclose:
(a) The aggregate deemed cost of those investments for which
deemed cost is fair value; and
(b) The aggregate adjustment to the carrying amounts reported
under the previous basis of accounting.
150. The disclosure requirements required in paragraphs 148 and 149
should be disclosed in each period when new items are

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recognised and/or measured until the exemptions that provided
the relief have expired and/or when the relevant assets are
recognised and/or measured in accordance with the applicable
ASLBs (whichever is earlier).
Exemptions from Disclosure Requirements in ASLBs
During the Period of Transition
151. To the extent that a first-time adopter takes advantage of the
exemption that provides a three year relief period to not
recognise and/or measure items, it is not required to apply any
associated presentation and/or disclosure requirements related to
such items as required in ASLB 1, ASLB 18 and/or the applicable
ASLBs until such time as the exemptions that provided the relief
have expired and/or when the relevant items have been
recognised and/or measured in accordance with the applicable
ASLBs (whichever is earlier).
152. Notwithstanding the transitional provision in paragraph 151, a
first-time adopter is encouraged to disclose the information
required by ASLB 1, ASLB 18 and/or the applicable ASLB as soon
as possible.
153-154. [Refer to Appendix 1]

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Implementation Guidance
This guidance accompanies, but is not part of, ASLB 33.
IG1. The purpose of this Implementation Guidance is to illustrate certain
aspects of the requirements of ASLB 33.
Date of Adoption of ASLBs
IG2. The date of adoption of ASLBs is the date an entity adopts accrual
basis ASLB for the first time in preparing its financial statements.
IG3. Prior to the adoption of this ASLB, a first-time adopter should have
adequately prepared for its transition to accrual basis ASLBs. The
relief provided in this ASLB should therefore not be seen as a
complete roadmap for the adoption of accrual basis ASLBs, but rather
the end stage of the adoption process.
IG4. A first-time adopters‘ date of adoption will therefore to be the start of
the reporting period in which it elects to adopt accrual basis ASLBs for
which it presents its transitional ASLB financial statements or its first
ASLB financial statements. For example, an entity elects to adopt
accrual basis ASLBs from April 1, 20X0 for its reporting period ending
March 31,20X1. The date of adoption of ASLBs will be April1, 20X0.
Transitional ASLB Financial Statements
IG5. On the date of adoption of ASLBs, a first-time adopter may elect to
adopt one of more of the exemptions included in ASLB 33, ‗First-time
Adoption of Accrual Basis Accounting Standards for Local Bodies
(ASLBs)’. Some of the exemptions included in ASLB 33 affect the fair
presentation of a first-time adopter‘s financial statements and its ability
to assert compliance with accrual basis ASLBs (Appendix A lists the
transitional exemptions and provisions that a first-time adopter is
required to apply and/or can elect to apply on adoption of accrual
basis ASLBs and illustrates whether fair presentation and the first-time
adopter‘s ability to assert compliance with accrual basis ASLBs will be
affected).
IG6. As a first-time adopter is not able to make an explicit and unreserved
statement of compliance with accrual basis ASLBs following the
adoption of the exemptions provided in ASLB 33, the financial
statements presented for the first reporting period following the

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adoption of accrual basis ASLBs, will be referred to as the ―transitional
ASLB financial statements‖.
IG7. For example, if the first-time adopter adopts the transitional exemption
that provides relief for the recognition of certain items of property,
plant and equipment when adopting accrual basis ASLBs on April1,
20X0, it would not be able to make an explicit and unreserved
statement of compliance with accrual basis ASLBs at the end of its
first reporting period, i.e., March 31, 20X1. The financial statements
prepared for the first reporting period, will therefore be referred to as
the ―first transitional ASLB financial statements‖.
IG8. The financial statements presented during the period of transition until
the exemptions that provided the relief have expired, and/or when the
relevant items are recognised and/or measured in the financial
statements in accordance with the applicable ASLBs, will be referred
to as the ―transitional ASLB financial statements‖.
Basis of Preparation When Preparing Transitional ASLB Financial
Statements
IG9. As stated in paragraph 27 of ASLB 33, a first-time adopter that elects
to adopt one or more of the exemptions included in ASLB 33, may not
be able to make an explicit and unreserved statement of compliance
with accrual basis ASLBs as required by ASLB 1. During the period of
transition, this fact should be highlighted to the users of financial
statements in presenting the ―basis of preparation‖ in the financial
statements.
IG10. As an illustration, if a first-time adopter elected to adopt the
transitional exemption that allows it three years in which to recognise
and/or measure investment property, the following explanation may be
provided in the ―basis of preparation‖ paragraph in the financial
statements during the period of transition:
Basis of preparation
The financial statements have been prepared in accordance with
accrual basis Accounting Standards for Local Bodies (ASLBs). ASLB
33 allows a first-time adopter a period of up to three years to
recognise and/or measure certain assets and/or liabilities.

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In its transition to accrual basis ASLBs, Entity X took advantage of this
transitional exemption for investment property. As a result, it is unable
to make an explicit and unreserved statement of compliance with
accrual basis ASLBs in preparing its transitional ASLB financial
statements for this reporting period. Entity X intends to recognise
and/or measure its investment property by April 20X3.
First ASLB Financial Statements
IG11. A first-time adopter‘s first ASLB financial statements will be the first set
of financial statements that it presents in which it makes an explicit
and unreserved statement of compliance with accrual basis ASLBs.
IG12. A first-time adopter will not be able to prepare its first ASLB financial
statements until the exemptions in ASLB 33 that provided relief which
affected fair presentation and compliance with ASLB, have expired, or
when the relevant items are recognised, measured and/or the relevant
information has been presented and/or disclosed in accordance with
the applicable ASLBs (whichever is earlier).
IG13. Following from the example in IG5, the transitional exemptions that
provided the relief for the recognition of certain items of property, plant
and equipment expire after three years, i.e., March 31, 20X3. If it is
assumed that the entity has not adopted any other transitional
exemptions in ASLB 33 that affect fair presentation and compliance
with ASLBs, and that it recognises and/or measures the items of
property, plant and equipment during the transitional period, a first-
time adopter will present its first ASLB financial statements for the
period ending March 31, 20X3.
IG14. If a first-time adopter has not adopted any of the exemptions in ASLB
33 that affect fair presentation and its ability to claim compliance with
accrual basis ASLBs, its first accrual financial statements will also be
its first ASLB financial statements.
To illustrate:
Timeline – First Time Adoption ASLB (assuming that entity
elects to apply the three year transitional relief for the
recognition and/or measurement of certain assets)
An entity adopts accrual basis ASLBs on 1 April 20X0 by applying
ASLB 33, ‗First Time Adoption of Accrual Basis ASLBs’

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The first-time adopter elects to apply the three year relief for the
recognition of property, plant and equipment. Assume that it does not
adopt of any other relief periods. It also elects not to present
comparative information.
The first-time adopter recognises all property, plant and equipment by
31 March 20X3.
Start of second reporting period 1 Start of third reporting period 1
April 20X1 April 20X2
Year 1 Year 2 Year 3

Year 1 (ending 31 March 20X0) Year 2 (ending 31 Year 3 (ending 31
– First Transitional ASLB March 20X1) – March 20X3) – First
Financial Statements Transitional ASLB ASLB Financial
Cannot assert compliance with Financial Statements Statements
accrual basis ASLBs Cannot assert Can assert
Present the following compliance with compliance with
statements: ASLBs ASLBs
opening balance sheet as at Present the following Present the following
01/04/20X0 statements for both statements for both
balance sheet as at 31/03/20X1 and 20X0: 31/03/20X2 and 20X1:
31/03/20X1 balance sheet balance sheet
statement of income and statement of income statement of income
expenditure for 31/03/20X1 and expenditure and expenditure
cash flow statement for cash flow statement cash flow statement
31/03/20X1 Present the Present the
statement of comparison of statement of statement of
budget and actual information comparison of comparison of
for 31/03/20X1 budget and actual budget and actual
(depending on the policy information for information for
chosen for presentation of 31/03/20X1 only 31/03/20X2 only
information the first-time (depending on policy (depending on policy
adopter may include an chosen for chosen for
additional column in the presentation of presentation of
annual financial statements) information the first- information, the first-
Present the following in the time adopter may time adopter may
notes: include an additional include an additional
reconciliation of changes column in the annual column in the annual
financial statements) financial statements)

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from its previous basis of Present the following
accounting (reflect in the notes:
adjustments related to the reconciliation of
adoption of all ASLBs besides adjustments made to
ASLB 17) recognize property,
Note: If the first-time adopter plant and equipment
elected to present comparative
information, the following
statements should have been
presented:
opening balance sheet as at
01/04/19X9
balance sheet as at
31/03/19X9 and 31/03/20X0
statement of income and
expenditure for 31/03/19X9 and
31/03/20X0
cash flow statement for
31/03/19X9 and 31/03/20X0
statement of comparison of
budget and actual information
for 31/03/19X9 and 31/03/20X0

Estimates
IG15. Paragraph 23 of ASLB 33 requires that a first-time adopter‘s estimates
in accordance with ASLBs at the date of adoption of ASLBs should be
consistent with estimates made at the end of its comparative period in
accordance with the previous basis of accounting (after adjustments to
reflect any difference in accounting policies), unless there is objective
evidence that those estimates were in error. An entity may receive
information after the date of adoption of ASLBs about estimates that it
had made under the previous basis of accounting. In accordance with
paragraph 24, a first-time adopter should treat the receipt of that
information in the same way as non-adjusting events after the
reporting period in accordance with ASLB 14, ‗Events after the
Reporting Period’.
IG16. For example, assume that a first-time adopter‘s date of adoption of
ASLBs is April1, 20X4 and new information on July 15, 20X4 requires
the revision of an estimate made in accordance with the previous basis
of accounting at March 31, 20X4. The first-time adopter should not

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reflect that new information in its opening balance sheet (unless the
estimates require adjustment for any differences in accounting policies
or there is objective evidence that the estimates were in error).
Instead, the first-time adopter should reflect that new information in
surplus or deficit for the year ended March 31, 20X5.
Transitional Exemptions that Provide Three Year Relief for the
Recognition and/or Measurement of Assets and/or Liabilities
IG17. ASLB 33 provides a first-time adopter a period of up to three years‘
relief in which it is allowed to not recognise and/or measure certain
assets and liabilities. Where a first-time adopter takes advantage of
this exemption, it will have to consider and analyse title deeds,
contracts and other similar arrangements in accounting for, and
classifying these assets in accordance with the applicable ASLB.
IG18. For example, assume that a first-time adopter controls a wide range of
property, plant and equipment when it adopts accrual basis ASLBs on
April1, 20X1. If the first-time adopter takes advantage of the exemption
that provides a three year transitional relief period to not recognise
and/or measure the property, plant and equipment, it may recognise
and/or measure the property, plant and equipment during the period of
transition from April 1, 20X1 until March 31, 20X4. If the property, plant
and equipment is recognised for example, on July 1, 20X2, the first-
time adopter should adjust the opening accumulated surplus or deficit
on April 1, 20X2. As required by paragraph 142 of ASLB 33, the first-
time adopter should, as part of the notes to the financial statements,
provide a reconciliation to the accumulated surplus or deficit as at
March 31, 20X2 (i.e. the opening balance as at April 1, 20X2) for the
property, plant and equipment that was recognised on July 1, 20X2.
IG19. Where a first-time adopter has taken advantage of the three year relief
period, it should not derecognise any of the assets and/or liabilities
that were recognised under its previous basis of accounting unless it is
to comply with an ASLB requirement. Any adjustments to the assets
and/or liabilities recognised under its previous basis of accounting
should be adjusted during the period of transition against the opening
accumulated surplus of deficit in the period in which the adjustment is
made.
Accounting for Finance Leases Assets and Finance Lease Liabilities
IG20. Where a first-time adopter takes advantage of the exemption that

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provides a three year transitional relief period to not recognise its
finance lease assets, it will also not be able to comply with the
recognition requirements relating to the finance lease liabilities, until
the transitional exemptions related to the finance leased assets have
expired, or the finance leased assets have been recognised in
accordance with ASLB 13.
IG21. For example, assume that a first-time has a motor vehicle that is
subject to a finance lease agreement on the date of adoption of
accrual basis ASLBs on April 1, 20X1. The first-time adopter takes
advantage of the exemption that provides a three year transitional
relief period to not recognise the motor vehicle. The motor vehicle is
recognised on March 31, 20X4 when the exemption expires. ASLB 33
requires the first-time adopter to only recognise the corresponding
finance lease liability for the motor vehicle on March 31, 20X4, i.e., on
the date that the finance lease asset (the motor vehicle) is recognised.
Recognition of Provisions Included in the Initial Cost of an Item of Property,
Plant and Equipment
IG22. ASLB 17 recognises that in some cases, the construction or
commissioning of an item of property, plant and equipment will result
in an obligation for an entity to dismantle or remove the item of
property, plant and equipment and restore the site on which the asset
is located. An entity is required to apply ASLB 19, ‗Provisions,
Contingent Liabilities and Contingent Assets’ in recognising and
measuring the resulting provision to be included in the initial cost of
the item of property, plant and equipment.
IG23. ASLB 33 provides an exemption for the recognition of this liability. A
first-time adopter is allowed to not recognise and/or measure the
liability relating to the initial estimate of costs of dismantling and
removing the item and restoring the site on which it is located, until
such time as the exemption for ASLB 17 expires and/or the relevant
asset is recognised and/or measured and relevant information has
been presented and/or disclosed in the financial statements in
accordance with ASLB 17 (whichever is earlier).
IG24. For example, an entity adopts accrual basis ASLBs on April 1, 20X1
and takes advantage of the exemption in ASLB 33 that provides a
three year transitional relief period to not recognise a sewage plant.

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The first-time adopter determines a deemed cost for the asset on June
30, 20X3 and recognises the asset on that date at ₹ 1,000,000. The
first-time adopter determines that it has a decommissioning obligation
under ASLB 19 of ₹ 500,000 at the date of adoption of ASLBs. The
obligation amounts to ₹ 550,000 on June 30, 20X3 when the asset is
recognised.
IG25. ASLB 33 requires the first-time adopter to only recognise and/or
measure its obligation relating to the dismantling and restoring of the
site on June 30, 20X3, i.e., the date on which the asset is recognised.
The liability will be measured at ₹ 550,000 which reflects the first-time
adopter‘s obligation on the date that the asset is recognised. The first-
time adopter should, as part of the notes to the financial statements,
provide a reconciliation to the accumulated surplus or deficit as at
March 31, 20X3 (i.e., the opening balance as at April 1, 20X3) for the
recognition of the obligation and the related asset that was recognised
on June 30, 20X3.
Borrowing Costs Incurred on Qualifying Assets
IG26. Paragraph 90 of ASLB 33 requires that, requirements of ASLB 5,
‗Borrowing Costs’ should be applied prospectively.
IG27. Paragraph 44 of ASLB 33 provides an exemption to this requirement
by allowing a first-time adopter to commence capitalisation of
borrowings costs incurred on qualifying assets after the recognition of
an asset where the first-time adopter takes advantage of the
exemption that provides a three year transitional relief period for the
recognition of assets.
IG28. [Refer to Appendix 1]
Presenting Comparative Information
IG29. Paragraph 78 of ASLB 33 encourages, but does not require an entity
to present comparative information in its transitional ASLB financial
statements or its first ASLB financial statements in accordance with
this ASLB. The decision to present comparative information affects not
only the extent of the information presented, but also the date of
adoption of ASLBs.
Date of Adoption of ASLBs
IG30. To illustrate: The end of a first-time adopter‘s first accrual basis

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reporting period is March 31, 20X6. The first-time adopter decides to
present comparative information in those financial statements for one
year only (see paragraph 78 of ASLB 33). Therefore, its date of
adoption of ASLBs is the beginning of the comparative period, i.e.,
April 1, 20X4 (or equivalently March 31, 20X4).
Information Presented when a First-Time Adopter Elects to Prepare
Comparative Information
IG31. Where the first-time adopter elects to prepare comparative information,
it is required to apply the accrual basis ASLBs effective for periods
ending on March 31, 20X6 in:
(a) Preparing and presenting its opening accrual basis balance
sheet at April 1, 20X4; and
(b) Preparing and presenting its:
(i) Balance sheet for March 31, 20X6 (including comparative
amounts for the year ended March 31, 20X5);
(ii) Statement of income and expenditure (including
comparative amounts for the year ended March 31,
20X5);
(iii) [Refer to Appendix 1];
(iv) Statement of cash flows for the year to March 31, 20X6
(including comparative amounts for the year ended March
31, 20X5);
(v) Disclosures (including comparative information for the
year ended March 31, 20X5);
(vi) A comparison of budget and actual amounts for the year
to March 31, 20X6; and
(vii) Reconciliations in accordance with paragraph 142 .
First-Time Adopter Elects to Not Prepare Comparative Information
IG32. Where a first-time adopter elects to not prepare comparative
information, it is required to apply the accrual basis effective for
periods ending on March 31, 20X6:
(a) Preparing and presenting its opening accrual basis balance
sheet at 1 April 20X5; and

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(b) Preparing and presenting its:
(i) Balance sheet for March 31, 20X6;
(ii) Statement of income and expenditure for March 31, 20X6;
(iii) [Refer to Appendix 1];
(iv) Statement of cash flows for the year to March 31, 20X6;
(v) Disclosures;
(vi) A comparison of budget and actual amounts for the year
to March 31, 20X6; and
(vii) Reconciliations in accordance with paragraph 142.
Adoption of Three Year Transitional Relief Period
IG33. Where the first-time adopter takes advantage of the exemptions that
provide relief from the recognition and/or measurement of assets
and/or liabilities, ASLB 33 requires it to only adjust comparative
information for reporting periods following the date of adoption of
ASLBs to the extent that reliable and relevant information is available
about the items that have been recognised and/or measured.
IG34. To illustrate: The end of a first-time adopter‘s first accrual basis
reporting period is March 31, 20X3. The first-time adopter on the date
of adoption of ASLBs on April 1, 20X1, adopts the transitional
exemption providing a three year relief period for the recognition of
investment property. At March 31 20X4 the first-time adopter has
recognised the investment property, which is included in the balance
sheet as at March 31, 20X4. Only if reliable and relevant information if
available about the value of the investment property recognised during
20X3-20X4, the first-time adopter adjust the comparative information
presented (i.e., for the period ending March 31, 20X3).
Presenting Reconciliations
IG35. Paragraph 142 of ASLB 33 requires a first-time adopter to present a
reconciliation of its closing balances reported under its previous basis
of accounting, to its net assets/equity in accordance with ASLBs for
the transitional ASLB financial statements or its first ASLB financial
statements. A reconciliation is presented of its surplus or deficit in
accordance with its previous basis of accounting to its opening
balance of surplus or deficit at the date of adoption of ASLBs.

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IG36. For example, a first-time adopter, which previously applied a modified-
accrual basis of accounting, adopts accrual basis ASLBs on April 1,
20X4 and elects to present comparative information as permitted in
ASLB 33. The first-time adopter should, in accordance with
paragraphs 142 and 143 of ASLB 33, present a reconciliation in the
notes to its transitional ASLB financial statements that provides
sufficient detail to enable users to understand the material adjustments
to the opening balance sheet as at April 1, 20X4, and the restated
comparative statement of income and expenditure, where applicable.
IG37. Paragraph 146 further requires a first-time adopter that takes
advantage of the exemptions that provide a three year transitional
relief period to not recognise and/or measure items, to present a
reconciliation of items that have been recognised and/or measured
during the reporting period which were not recognised and/or
measured in the previous financial statements.
IG38. Following from the example in IG29, a first-time adopter adopts the
exemption in ASLB 33 that allows it to not recognise investment
property for a period of three years. The first-time adopter applies this
exemption and only recognises the investment property at the end of
year three, i.e., March 31, 20X5. As an adjustment is made to the
opening balance of accumulated surplus or deficit as on April 1, 20X4
in recognising the investment property, paragraph 146 requires the
first-time adopter to present a reconciliation in its notes to the financial
statements for the year ending March 31, 20X5 to allow users to
understand the adjustment that was made following the recognition of
the investment property.
Deemed Cost
IG39. ASLB 33 allows a first-time adopter to determine a deemed cost as a
substitute for acquisition cost or depreciated cost at the date of
adoption of ASLBs, where a first-time adopter takes advantage of the
exemption that provides a three year transitional relief period to not
recognise and/or measure certain assets and/or liabilities. A deemed
cost may however only be determined if no cost information is
available about the historical cost of the asset and/or liability. When a
first-time adopter initially measures these assets on the date of
adoption of ASLBs, or when the transitional exemptions that provided

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the first-time adopter with a three year relief period to not recognise
and/or measure certain assets have expired, it recognises the effect:
As an adjustment to the opening balance of accumulated surplus or
deficit in the opening balance sheet in the period in which the deemed
is determined.
Determining a Deemed Cost During the Period of Transition
IG40. If a first-time adopter takes advantage of the exemption in ASLB 33
that provides a three year transitional relief period to not recognise
and/or measure an asset, the ASLB requires that it may determine a
deemed cost for that asset during any point of time within the three
year transitional relief period.
IG41. Subsequent depreciation and amortisation, if applicable, is based on
that deemed cost and starts from the date of adoption of ASLBs, or
when the transitional exemptions that provided the relief have expired,
or when the relevant items are recognised and/or measured in
accordance with the applicable ASLBs (whichever is earlier).
IG42. For example, a first-time adopter adopts ASLBs on April 1, 20X1 and
adopts the exemption that provides a three year transitional relief
period for the recognition of an investment property. Because the first-
time adopter does not have reliable cost information about the
historical cost of the investment property on the date of adoption of
ASLBs it decides to determine a deemed cost for the investment
property. The deemed cost for the investment property is determined
during the second reporting period (i.e., 20X2-20X3) in which the first-
time adopter applies the exemption. ASLB 33 allows the first-time
adopter to use the deemed cost determined during 20X2-20X3 in
recognising the investment property by adjusting the opening
accumulated surplus and deficit on April 1, 20X2. The deemed cost as
determined on April 1, 20X2 will be used in determining subsequent
depreciation and in assessing impairment where the first-time adopter
elects to apply the cost model as its subsequent measurement basis in
applying ASLB 16.
IG43-44. [Refer to Appendix 1]

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ASLB 9, ‘Revenue from Exchange Transactions’
IG45. If a first-time adopter has received amounts that do not yet qualify for
recognition as revenue in accordance with ASLB 9 (for example, the
proceeds of a sale that does not qualify for recognition as revenue),
the first-time adopter recognises the amounts received as a liability in
its opening balance sheet and measures that liability at the amount
received. It should derecognise the liability and recognise the revenue
in its statement of income and expenditure when the recognition
criteria in ASLB 9 are met.
IG46-47 [Refer to Appendix 1]
ASLB 14, ‘Events After the Reporting Date’
IG48. Except as described in paragraph IG49, a first-time adopter applies
ASLB 14, ‗Events After the Reporting Date’ in determining whether:
(a) Its opening balance sheet reflects an event that occurred after
the date of transition; and
(b) Comparative amounts in its transitional ASLB financial
statements or its first ASLB financial statements, where
applicable, reflect an event that occurred after the end of that
comparative period.
IG49. Paragraphs 23–26 of ASLB 33 require some modifications to the
principles in ASLB 14 when a first-time adopter determines whether
changes in estimates are adjusting or non-adjusting events at the date
of adoption of ASLBs (or, when applicable, the end of the comparative
period). Cases 1 and 2 below illustrate those modifications. In case 3
below, paragraphs 23–26 of ASLB 33 do not require modifications to
the principles in ASLB 14.
(a) Case 1—If a first-time adopter‘s previous basis of accounting
required estimates of similar items for the date of adoption of
ASLBs, using an accounting policy that is consistent with
ASLBs. In this case, the estimates in accordance with ASLBs
need to be consistent with estimates made for that date in
accordance with previous basis of accounting, unless there is
objective evidence that those estimates were in error (see ASLB
3, ‗Accounting Policies, Changes in Accounting Estimates and
Errors’). The first-time adopter reports later revisions to those

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estimates as events of the period in which it makes the
revisions, rather than as adjusting events resulting from the
receipt of further evidence about conditions that existed at the
date of adoption of ASLBs.
(b) Case 2—Previous basis of accounting required estimates of
similar items for the date of adoption of ASLBs, but the first-time
adopter made those estimates using accounting policies that
are not consistent with its accounting policies in accordance
with ASLBs. In this case, the estimates in accordance with
ASLBs need to be consistent with the estimates required in
accordance with the previous basis of accounting for that date
(unless there is objective evidence that those estimates were in
error), after adjusting for the difference in accounting policies.
The opening balance sheet reflects those adjustments for the
difference in accounting policies. As in case 1, the first-time
adopter reports later revisions to those estimates as events of
the period in which it makes the revisions.
(c) Case 3—Previous basis of accounting did not require estimates
of similar items for the date of adoption of ASLBs. Estimates in
accordance with ASLBs for that date reflect conditions existing
at that date. In particular, estimates of market prices, interest
rates or foreign exchange rates at the date of adoption of
ASLBs reflect market conditions at that date. This is consistent
with the distinction in ASLB 14 between adjusting events after
the reporting period and non-adjusting events after the reporting
period.
IG50. To illustrate: Entity A‘s first transitional ASLB financial statements are
for the period ending March 31, 20X6 with the first-time adopter
electing to present comparative information. In terms of its previous
basis of accounting the following transactions and events are noted in
entity A‘s financial statements for March 31, 20X4 and 20X5:
(a) Estimates of accrued expenses and provisions were made at
those dates;
(b) The entity accounted on a cash basis for a defined benefit
pension plan; and

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(c) No provision was recognised for a court case arising from
events that occurred in September 20X4. When the court case
was concluded on June 30, 20X5, entity A was required to pay ₹
1000 and paid this on July 10, 20X5.
In preparing its transitional ASLB financial statements, entity A
concludes that its estimates in accordance with its previous basis of
accounting of accrued expenses and provisions at March 31, 20X4
and 20X5 were made on a basis consistent with its accounting policies
in accordance with ASLBs. Although some of the accruals and
provisions turned out to be overestimates and others to be
underestimates, entity A concludes that its estimates were reasonable
and that, therefore, no error had occurred. As a result, accounting for
those overestimates and underestimates involves the routine
adjustment of estimates in accordance with ASLB 3, ‗Accounting
Policies, Changes in Accounting Estimates and Errors’.
Application of Requirements
In preparing its opening balance sheet at April 1, 20X4 and in its
comparative balance sheet at March 31, 20X5, entity A:
(a) Does not adjust the previous estimates for accrued expenses
and provisions; and
(b) Makes estimates (in the form of actuarial assumptions)
necessary to account for the pension plan in accordance with
ASLB 39, ‗Employee Benefits’. Entity A‘s actuarial assumptions
at April 1, 20X4 and March 31, 20X5 do not reflect conditions
that arose after those dates. For example, entity A‘s:
(i) Discount rates at April 1, 20X4 and March 31, 20X5 for
the pension plan and for provisions reflect market
conditions at those dates; and
(ii) Actuarial assumptions at April 1, 20X4 and March 31,
20X5 about future employee turnover rates do not reflect
conditions that arose after those dates—such as a
significant increase in estimated employee turnover rates
as a result of a curtailment of the pension plan after
March 31, 20X5.

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The treatment of the court case at March 31, 20X5 depends on the
reason why entity A did not recognise a provision in accordance with
its previous basis of accounting at that date.
Assumption 1 – The previous basis of accounting was consistent with
ASLB 19, ‗Provisions, Contingent Liabilities and Contingent Assets’.
Entity A concluded that the recognition criteria were not met. In this
case, entity A‘s assumptions in accordance with ASLBs are consistent
with its assumptions in accordance with its previous basis of
accounting. Therefore, entity A does not recognise a provision at
March 31, 20X5.
Assumption 2 – Entity A‘s previous basis of accounting was not
consistent with ASLB 19. Therefore, entity A develops estimates in
accordance with ASLB 19. Under ASLB 19, an entity determines
whether an obligation exists at the end of the reporting period by
taking account of all available evidence, including any additional
evidence provided by events after the reporting period. Similarly, in
accordance with ASLB 14, ‗Events after the Reporting Period’, the
resolution of a court case after the reporting period is an adjusting
event after the reporting period if it confirms that the entity had a
present obligation at that date. In this instance, the resolution of the
court case confirms that entity A had a liability in September 20X4
(when the events occurred that gave rise to the court case). Therefore,
entity A recognises a provision at March 31, 20X5. Entity A will make
provision of ₹ 1000 paid on July 10, 20X5 in accordance with ASLB 19
and reflects market conditions at March 31, 20X5.
IG51. Paragraphs 23–26 of the ASLB 33 do not override requirements in
other ASLBs that base classifications or measurements on
circumstances existing at a particular date. Example include: the
distinction between finance leases and operating leases (see ASLB
13, ‗Leases’).
ASLB 13, ‘Leases’
IG52. In accordance with paragraph 95 of ASLB 33 and paragraph 18 of
ASLB 13, a lessee or lessor classifies leases as operating leases or
finance leases on the basis of circumstances existing at the inception
of the lease, on the date of adoption of accrual basis ASLBs. In some
cases, the lessee and the lessor may agree to change the provisions

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of the lease, other than by renewing the lease, in a manner that would
have resulted in a different classification in accordance with ASLB 13
had the changed terms been in effect at the inception of the lease. If
so, the revised agreement is considered as a new agreement over its
term from the date of adoption of accrual basis ASLBs. However,
changes in estimates (for example, changes in estimates of the
economic life or of the residual value of the leased asset) or changes
in circumstances (for example, default by the lessee) do not give rise
to a new classification of a lease.
ASLB 17, ‘Property, Plant and Equipment’
IG53. If a first-time adopter‘s depreciation methods and rates in accordance
with its previous basis of accounting are acceptable in accordance
with ASLBs, it accounts for any change in estimated useful life or
depreciation pattern prospectively from when it makes that change in
estimate (paragraphs 22 and 26 of ASLB 33 and paragraph 76 of
ASLB 17). However, in some cases, a first-time adopter‘s depreciation
methods and rates in accordance with its previous basis of accounting
may differ from those that would be acceptable in accordance with
ASLBs (for example, if they do not reflect a reasonable estimate of the
asset‘s useful life). If those differences have a material effect on the
financial statements, the entity adjusts accumulated depreciation in its
opening balance sheet retrospectively so that it complies with ASLBs.
IG54. [Refer to Appendix 1]
IG55. Subsequent depreciation is based on that deemed cost and starts from
the date for which the first-time adopter determined the deemed cost,
or where the first-time adopter takes advantage of the exemption that
provides a three year transitional relief period to not recogni se certain
assets, when the exemptions providing the relief have expired, or the
asset has been recognised in accordance with ASLB 17 (whichever is
earlier).
IG56-57. [Refer to Appendix 1]
IG58. ASLB 17 requires each part of an item of property, plant and
equipment with a cost that is significant in relation to the total cost of
the item to be depreciated separately. However, ASLB 17 does not
prescribe the unit of measurement for recognition of an asset, i.e.,
what constitutes an item of property, plant and equipment. Thus,

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judgment is required in applying the recognition criteria to an entity‘s
specific circumstances (paragraphs 18 and 59).
ASLB 39, ‘Employee Benefits’
IG59. At the date of adoption of ASLBs, a first-time adopter applies ASLB 39
in measuring defined benefits plans and other long-term employee
benefits, and recognises all cumulative actuarial gains or losses from
the inception of the plan until the date of adoption of ASLBs, or where
the first-time adopter takes advantage of the exemption that provides a
three year transitional relief period from the recognition of defined
benefit plans and other long-term employee benefits, the date on
which the exemptions expire or when the defined benefits plans and
other long-term employee benefits are recognised and/or measured in
accordance with ASLB 39 (whichever is earlier).
IG60. A first-time adopter‘s actuarial assumptions at the date of adoption of
ASLBs, or where the first-time adopter takes advantage of the
exemptions that provide relief from the recognition of defined benefit
plans and other long-term employee benefits, the date on which the
exemptions expire or when the defined benefits plans and other long -
term employee benefits are recognised and/or measured in
accordance with ASLB 39 (whichever is earlier), are consistent with
actuarial assumptions made at the end of its comparative period (if the
first-time adopter elects to present comparative information in
accordance with paragraph 78 of ASLB 33) in accordance with its
previous basis of accounting (after adjustments to reflect any
difference in accounting policies), unless there is objective evidence
that those assumptions were in error (paragraph 23 of the ASLB 33).
Any later revisions to those assumptions are an actuarial gain or loss
of the period in which the first-time adopter makes the revisions.
IG61. A first-time adopter may need to make actuarial assumptions at the
date of adoption of ASLBs, or where the first-time adopter takes
advantage of the exemptions that provide relief from the recognition of
defined benefit plans and other long-term employee benefits, the date
on which the exemptions expire or when the defined benefits plans
and other long-term employee benefits are recognised and/or
measured in accordance with ASLB 39 (whichever is earlier), that
were not necessary in accordance with its basis of accounting. Such

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actuarial assumptions do not reflect conditions that arose after the
date of adoption of ASLBs, or where the first-time adopter takes
advantage of the exemptions that provide relief from the recognition of
defined benefit plans and other long-term employee benefits, the date
on which the exemptions expire or when the defined benefits plans
and other long-term employee benefits are recognised and/or
measured in accordance with ASLB 39 (whichever is earlier). In
particular, discount rates and the fair value of plan assets at the date
of adoption of ASLBs, or where the first-time adopter takes advantage
of the exemptions that provide relief from the recognition of defined
benefit plans and other long-term employee benefits, the date on
which the exemptions expire or when the liabilities are recognised
and/or measured in accordance with ASLB 39 (whichever is earlier),
reflect market conditions at that date. Similarly, the first-time adopter‘s
actuarial assumptions at the date of adoption of ASLBs, or where the
first-time adopter takes advantage of the exemptions that provide relief
from the recognition of defined benefit plans and other long-term
employee benefits, the date on which the exemptions expire or when
the defined benefits plans and other long-term employee benefits are
recognised and/or measured in accordance with ASLB 39 (whichever
is earlier), about future employee turnover rates do not reflect a
significant increase in estimated employee turnover rates as a result of
a curtailment of the pension plan that occurred after the date of
adoption of ASLBs, or where the first-time adopter takes advantage of
the exemptions that provide relief from the recognition of defined
benefit plans and other long-term employee benefits, the date on
which the exemptions expire or when the defined benefits plans and
other long-term employee benefits are recognised and/or measured in
accordance with ASLB 39 (whichever is earlier) (paragraph 23 of
ASLB 33).
IG62. In many cases, a first-time adopter‘s transitional ASLB financial
statements or its first ASLB financial statements will reflect
measurements of employee benefit obligations at three dates (where a
first-time adopter elects to present comparative information in
accordance with paragraph 78 of ASLB 33): the end of the first
reporting period, the date of the comparative balance sheet (where the
first-time adopter elects to present comparative information) and the
date of adoption of ASLBs, or where the first-time adopter takes

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advantages of the exemptions that provide relief from the recognition
of defined benefit plans and other long-term employee benefits, the
date on which the exemptions expire or when the defined benefits
plans and other long-term employee benefits are recognised and/or
measured in accordance with ASLB 39 (whichever is earlier). ASLB 39
encourages the first-time adopter to involve a qualified actuary in the
measurement of all material post-employment benefit obligations. To
minimise costs, a first-time adopter may request a qualified actuary to
carry out a detailed actuarial valuation at one or two of these dates
and roll the valuation(s) forward or back to the other date(s). Any such
roll forward or roll back reflects any material transactions and other
material events (including changes in market prices and interest rates)
between those dates.
ASLB 21, ‘Impairment of Non-Cash-Generating Assets’ and ASLB
26, ‘Impairment of Cash-Generating Assets’
IG63. Paragraphs 98 and 108 of ASLB 33 requires a first-time adopter to
apply the requirements in ASLB 21 and ASLB 26 prospectively from
the date of adoption of accrual basis ASLBs, or where a first-time
adopter takes advantage of the exemptions that provide a three year
transitional relief period to not recognise and/or measure an asset, the
date when the exemptions that provided the relief expire and/or the
asset is recognised and/or measured. For example, if an entity adopts
accrual basis ASLBs on April 1, 20X1 and takes advantage of the
three year transitional relief period to not recognise and/or measure an
item or property, plant and equipment, if would not be required to
assess the item of property, plant and equipment for impairment until
(a) March 31, 20X4 (i.e. the date on which the transitional exemption
expire) or (b) the date following the recognition of the item of property,
plant and equipment if it was recognised and/or measured during the
period of transition (whichever is earlier).
IG64. The estimates used to determine whether a first-time adopter
recognises an impairment loss (and to measure any such impairment
loss) at the date of adoption of ASLBs, or where the first-time adopter
takes advantage of the exemption that provides relief from the
recognition of assets, the date on which the exemptions expire or
when the assets are recognised and/or measured in accordance with
the applicable ASLB (whichever is earlier) are consistent with

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estimates made for at the end of its comparative period (if the first -
time adopter elects to present comparative information in accordanc e
with paragraph 78 of ASLB 33) the first-time adopter‘s previous basis
of accounting (after adjustments to reflect any difference in accounting
policies), unless there is objective evidence that those estimates were
in error (paragraphs 23 and 24 of ASLB 33). The first-time adopter
reports any later revisions to those estimates as an event of the period
in which it makes the revisions.
IG65. In assessing whether it needs to recognise an impairment loss (and in
measuring any such impairment loss) at the date of adoption of
ASLBs, or where the first-time adopter takes advantage of the
exemption that provides relief from the recognition of assets, the date
on which the exemptions expire or when the assets are recognised
and/or measured in accordance with the applicable ASLB (whichever
is earlier), the first-time adopter may need to make estimates for that
date that were not necessary in accordance with its previous basis of
accounting. Such estimates and assumptions do not reflect conditions
that arose after the date of transition, or where the first-time adopter
takes advantage of the exemption that provides relief from the
recognition of assets, the date on which the exemptions expire or
when the assets are recognised and/or measured in accordance with
the applicable ASLB (whichever is earlier) (paragraph 25 of ASLB 33).
IG66-74. [Refer to Appendix 1]
ASLB 31, ‘Intangible Assets’
IG75. A first-time adopter‘s opening balance sheet excludes all intangible
assets and other intangible items that do not meet the criteria for
recognition in accordance with ASLB 31 at the date of adoption of
ASLB, or where the first-time adopter takes advantage of the
exemption that provides relief from the recognition of intangible
assets, the date on which the exemptions expire and/or when the
intangible assets are recognised and/ or measured in accordance with
the applicable ASLB (whichever is earlier) and includes all intangible
assets that meet the recognition criteria in ASLB 31 at that date.
IG76. The criteria in ASLB 31 require an entity to recognise an intangible
asset if, and only if:

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(a) It is probable that the future economic benefits that are
attributable to the asset will flow to the entity; and
(b) The cost of the asset can be measured reliably.
ASLB 31 supplements these two criteria with further, more specific,
criteria for internally generated intangible assets.
IG77. In accordance with paragraphs 63 and 66 of ASLB 31, an entity
capitalises the costs of internally generated intangible assets
prospectively from the date when the recognition criteria are met.
ASLB 33 allows an entity to recognise previously expensed intangible
assets to the extent that the item meets the definition of an intangible
asset, and the recognition criteria in ASLB 31. Thus, if an internally
generated intangible asset qualifies for recognition at the date of
adoption of ASLBs, or where the first-time adopter takes advantage of
the exemption that provides relief from the recognition of intangible
assets, the date on which the exemptions expire and/or when the
intangible assets are recognised and/or measured in accordance with
the ASLB 31 (whichever is earlier) the first-time adopter recognises
and/or measures the asset in its opening balance sheet even if it had
recognised the related expenditure as an expense in accordance with
its pervious basis of accounting.
IG78. If the asset does not qualify for recognition in accordance with ASLB
31 until a later date, its cost is the sum of the expenditure incurred
from that later date.
IG79. The criteria in paragraph IG76 also apply to intangible assets acquired
separately. In many cases, contemporaneous documentation prepared
to support the decision to acquire the asset will contain an assessment
of the future economic benefits or service potential. Furthermore, as
explained in paragraph 33 of ASLB 31, the cost of a separately
acquired intangible asset can usually be measured reliably.
IG80. [Refer to Appendix 1]
IG81. If a first-time adopter‘s amortisation methods and rates in accordance
with its previous basis of accounting are acceptable in accordance
with ASLBs, it accounts for any change in estimated useful life or
amortisation pattern prospectively from when it makes that change in
estimate (paragraphs 23 and 24 of ASLB 33 and paragraph 103 of

538
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

ASLB 31). However, in some cases, the first-time adopter‘s
amortisation methods and rates in accordance with its previous basis
of accounting may differ from those that would be acceptable in
accordance with ASLBs (for example, if they do not reflect a
reasonable estimate of the asset‘s useful life). If those differences
have a material effect on the financial statements, the first-time
adopter adjusts accumulated amortisation on in its opening balance
sheet retrospectively so that it complies with ASLBs.
ASLB 35, ‘Consolidated Financial Statements’
IG82. If a first-time adopter did not consolidate a controlled entity in
accordance with its previous basis of accounting, then, in its
consolidated financial statements, the first-time adopter measures the
controlled entity‘s assets and liabilities at the same carrying amounts
as in the accrual basis financial statements of the controlled entity
following its adoption of ASLBs, after adjusting for consolidation
procedures and for the effects of the entity combination in which it
acquired the controlled entity (paragraph 130 of ASLB 33). If the
controlled entity has not adopted accrual basis ASLBs in its financial
statements, the carrying amounts described in the previous sentence
are those that ASLBs would require in those financial statements.
Controlling Entity Adopts Accrual Basis ASLBs Before the Controlled Entity
Background
IG83. Controlling entity A presents its (consolidated) first ASLB financial
statements at year ended March 31, 20X6. Its controlled entity B,
wholly owned by controlling entity A since formation, prepares
information in accordance with accrual basis ASLBs for internal
consolidation purposes from that date, but controlled entity B does not
present its first ASLB financial statements until year ended March
20X8.
Application of Requirements
IG84. If controlled entity B applies paragraph 129(a) of ASLB 33, the
carrying amounts of its assets and liabilities are the same in both its
opening ASLB balance sheet at April 1, 20X6 and controlling entity‘s A
consolidated balance sheet (except for adjustments for consolidation
procedures) and are based on controlled entity B‘s date of adoption of
ASLBs.

539
Compendium of Accounting Standards for Local Bodies (ASLBs)

IG85. Alternatively, controlled entity B, in accordance with paragraph 129(b)
of ASLB 33, measure all its assets or liabilities based on its own date
of adoption of ASLBs (April 1, 20X6). However, the fact that controlled
entity B becomes a first-time adopter in 20X7-20X8 does not change
the carrying amounts of its assets and liabilities in controlling entity A‘s
consolidated financial statements.
Controlled Entity Adopts Accrual Basis ASLBs Before the Controlling Entity
Background
IG86. Controlling entity C presents its (consolidated) transitional ASLB
financial statements ASLBs in 20X7-20X8. Its controlled entity D,
wholly owned by controlling entity C since formation, presented its
transitional ASLB financial statements in 20X5-20X6. Until March 31
20X8, controlled entity D prepared information for internal
consolidation purposes in accordance with controlling entity‘s C
previous basis of accounting.
Application of Requirements
IG87. The carrying amounts of controlled entity D‘s assets and liabilities at
April 1, 20X6 are the same in both controlling entity‘s C (consolidated)
opening accrual basis balance sheet and controlled entity D‘s financial
statements (except for adjustments for consolidation procedures) and
are based on controlled entity D‘s date of adoption of ASLBs. The fact
that controlling entity C becomes a first-time adopter in 20X7-20X8
does not change those carrying amounts (paragraph 129 of ASLB 33).
IG88. Paragraphs 129 and 130 of ASLB 33 do not override the following
requirements:
(a) The rest of ASLB 33 in measuring all assets and liabilities for
which paragraphs 129 and 130 of ASLB 33 are not relevant.
(b) To give all disclosures required by this ASLB as of the first-time
adopter‘s own date of transition to ASLBs.
IG89. Paragraph 129 of ASLB 33 applies if a controlled entity becomes a
first-time adopter later than its controlling entity, for example if the
controlling entity previously prepared a reporting package in
accordance with accrual basis ASLBs for consolidation purposes but
did not present a full set of financial statements in accordance with

540
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

ASLBs. This may be relevant not only when a controlling entity
reporting package complies fully with the recognition and
measurement requirements of ASLBs, but also when it is adjusted
centrally for matters such as review of events after the reporting date
and central allocation of pension costs. However, paragraph 129 of
ASLB 33 does not permit a controlled entity to ignore misstatements
that are immaterial to the consolidated financial statements of its
controlling entity but material to its own financial statements.
Presentation and Disclosure
IG90. Paragraphs 135 to 140 in ASLB 33 require a first-time adopter to
disclose certain information when it has taken advantage of the
transitional exemptions and provisions in its adoption of accrual basis
ASLBs.
To illustrate:
Notes to the financial statements for the year ending March 31,
20X3
Note 48 – Adoption of transitional exemptions and provisions in
ASLB 33
Entity X adopted accrual basis ASLB on April 1, 20X1 and elected to
adopt the transitional exemption in ASLB 33 that allows it to apply a
deemed cost and a period of up to three years in which to measure
land and buildings and investment property.
Entity X took advantage of these exemptions in determining a deemed
cost, and to measure its land and buildings and investment property.
As a result of adopting these transitional exemptions and provisions
the entity is not able to make an explicit and unreserved statement
about its compliance with accrual basis ASLBs, as the adoption of
these transitional exemptions affect the fair presentation of Entity X‘s
financial statements and its ability to assert compliance with accrual
basis ASLBs.
No other transitional exemptions that affect fair presentation and
compliance with accrual basis ASLBs during the period of transition
were adopted or applied to any other assets and/or liabilities.
During the period under review, Entity X restated its opening balance
of investment property with an additional value of ₹ 1, 200, 000 after

541
Compendium of Accounting Standards for Local Bodies (ASLBs)

determining the deemed cost on June 30, 20X2 for the investment
property under its control.
As at year end, Entity X has not yet determined a deemed cost for land
and buildings and has not yet measured these assets in its financial
statements. Land and buildings reflect a closing balance of ₹ 2, 500,
000 as at March 31, 20X3. This value was determined under Entity X‘s
previous basis of accounting.
Entity X plans to apply a three year transitional exemption for
measuring its land and buildings and in determining a deemed cost for
these asset.
Entity X has appointed an appraiser to value the land and has
developed a model for the measurement of buildings. The progress in
determining the valuations for land and buildings is in accordance with
its implementation plan.

542
 Summary of Transitional Exemptions and Provisions Included in ASLB 33, ‘First-time Adoption of Accrual Basis ASLBs’

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
IG91. The diagram below summarises the transitional exemptions and provisions included in other accrual basis AS LBs
ASLB Transitional exemption provided
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
ASLB 1, √  Presenting
543

‗Presentation of To extent comparative
Financial that 3 year info
Statements’ relief period encouraged
was adopted
ASLB 2, ‗Cash √
Flow Statements’
ASLB 3,
‗Accounting √
Policies, Changes
in Accounting
Estimates and
Errors’
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
ASLB 5, √  Accounting
‗Borrowing Costs’ policy to be
applied
prospectively
544

ASLB 9, √
‗Revenue from To extent that
Exchange √ 3 year relief
Transactions’ period was
adopted for
assets and/or
liabilities
ASLB 11, √
‗Construction
Contracts’
ASLB 12, √ √ √
‗Inventories’ Inventory Inventory rec-
not ognised under
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
recognised previous basis
under of accounting
previous
basis of
545

accounting
ASLB 13, √ √
‗Leases’ Leased Leased assets
assets and/or
and/or liabilities
liabilities not recognised
recognised under
under previous basis
previous of accounting
basis of
accounting
ASLB 14, ‗Events √
After the
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
Reporting Date’
ASLB 16, √ √ √
‗Investment Investment Investment
Property’ property not property
546

recognised recognised
under under
previous previous basis
basis of of accounting
accounting
ASLB 17, √ √ √
‗Property, Plant Property, Property,
and Equipment’ plant and plant and
equipment equipment
not recognised
recognised under
under previous basis
previous of accounting
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
basis of
accounting
ASLB 18, √
‗Segment No segment
547

Reporting’ report to the
extent that
3 year relief
period was
adopted
ASLB 19, √ √
‗Provisions, Only Only liabilities
Contingent liabilities related to
Liabilities and related to assets
Contingent assets not recognised
Assets’ recognised under
under previous basis
previous of accounting
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
basis of to be included
accounting initial estimate
to be of cost of
included dismantling/
548

initial removing
estimate of item/ restoring
cost of site
dismantling/
removing
item/
restoring site
ASLB 20, √
‗Related Party
Disclosures’
ASLB 21,  Prospective
‗Impairment of application
Non-Cash-
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
Generating
Assets’
ASLB 23, √ √ √
‗Revenue from All non- All non- To extent that
549

Non-Exchange exchange exchange 3 year relief
Transactions’ revenue not revenue period was
recognised recognised adopted for
under under assets and/or
previous previous basis liabilities
basis of of ac counting
accounting
ASLB 24, √
‗Presentation of
Budget
Information in
Financial
Statements’
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
ASLB 26, √  Prospective
‗Impairment of application
Cash-Generating
Assets’
550

ASLB 27, √ √
‗Agriculture’ Biological Biological and
and agricultural
agricultural activities
activities not recognised
recognised under
under previous basis
previous of accounting
basis of
accounting
ASLB 31, √ √ √  Provision to
‗Intangible Intangible Intangible Intangible recognise
Assets’ assets assets not assets previously
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
other than recognised recognised expensed
internally under under internally
generated previous previous basis generated
I/A basis of of accounting intangible
551

accounting assets
ASLB 32, ‗Service √ √ √  Provision on
Concession Service Service Service how to
Arrangements: concession concession concession recognise
Grantor’ asset asset and asset and related
related related liability liability
liability not recognised
recognised under
under previous basis
previous of accounting
basis of
accounting
ASLB 35, √ √ √  Provisions
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
‗Consolidated To when
Financial appropriately controlling
Statements’ classify and and/or
identify controlled
552

interests in entity adopts
other entities ASLB at
different time
 Exemption to
not prepare
financial
statements as
consolidated
financial
statements
 (Assess if
investment
entity on date
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
of adoption
and measure
at fair value
at that date)
553

ASLB 36, √ √ √  Provisions
‗Investments in To when
Associates and appropriately controlling
Joint Ventures' classify and entity and
identify associate
interests in adopts ASLB
other entities at different
time
 Exemption to
not include
investment in
associate in
consolidated
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
financial
statements
√ √ √  Provisions
To when
554

appropriately controlling
classify and entity and
identify associate and
interests in jointly
other entities controlled
entities adopt
ASLB at
different time
 Exemption to
not include
interests in
joint venture
in
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
consolidated
financial
statements
ASLB 37,’ Joint  Provision on
555

Arrangements’ how to
measure
investment in
joint venture
previously
accounted for
using
proportionate
consolidation
ASLB 39, √ √  Provisions on
‗Employee defined for defined how to
Benefits’ benefit plans benefit and determine
and other other long- initial liability
 ASLB Transitional exemption provided

Compendium of Accounting Standards for Local Bodies (ASLBs)
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
long-term term  Provision to
employee employee not separate
benefits not benefits cumulative
recognised recognised actuarial
556

under under gains and
previous previous basis losses
basis of of ac counting  Prospective
accounting disclosure on
experience
adjustments
ASLB 42, ‗Social √ √
Benefits‘ liabilities for liabilities for
social social benefits
benefits not recognised
recognised under
under previous basis
previous of accounting
 ASLB Transitional exemption provided

First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies
NO YES
Deemed 3 year 3 year 3 year 3 year Elimination Other
cost transitional transitional transitional transitional of
relief for relief for relief for relief for transactions,
recognition measurement recognition disclosure balances,
and/ or revenue and
measurement expenses
basis of
accounting
557
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

Appendix
Differentiation between transitional exemptions and provisions that a
first-time adopter is required to apply and/or can elect to apply on
adoption of accrual basis ASLBs
This Appendix summarises how the transitional exemptions and provisions
that a first-time adopter is required to apply in terms of this ASLB, and those
that a first-time adopter may elect to apply on adoption of accrual basis
ASLBs.
As the transitional exemptions and provisions that may be elected can also
affect the fair presentation and the first-time adopter‘s ability to assert
compliance with accrual basis ASLBs as explained in paragraphs 27 to 32 of
ASLB 33, the Appendix makes a distinction between those transitional
exemptions and provisions that affect fair presentation and the ability to
assert compliance with accrual basis ASLBs, and those that do not.

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
ASLB 1
• Present comparative √
information

ASLB 4
• Cumulative transitional √
differences at the date of
adoption

558
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
ASLB 5
• Entity has taken √
advantage of relief period
• Adopt accounting policy
on date of adoption – √
prospective application

ASLB 9
• Relief for recognition
and/or measurement of
revenue related to adoption √
of three year relief period
ASLB 12
• Three year relief for
recognition and/or √
measurement of assets and
changing the accounting
policy to measure assets
ASLB 13
• No recognition and/or
measurement of finance √
lease liability and finance

559
Compendium of Accounting Standards for Local Bodies (ASLBs)

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
lease asset if relief period
for recognition and/or
measurement of assets is
adopted
• Classification of lease
√
based on circum-
stances at adoption of
accrual basis ASLB
ASLB 16
• Three year relief for
recognition and/or √
measurement of assets and
changing the accounting
policy to measure assets
ASLB 17
• Three year relief for
recognition and/or √
measurement of assets and
changing the accounting
policy to measure assets
ASLB 18
• No preparation of
segment report within three √
years of adoption

560
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
ASLB 19
• No recognition and
measurement of liability
relating to initial estimate of √
costs of dismantling and
removing item if relief for
recognition and/or
measurement of assets are
adopted
ASLB 20
• No disclosure of related √
party relationships, related
party transactions and
information about key
management personnel
ASLB 21
• Apply impairment √
provisions prospectively on
date of adoption or when
assets are recognised when
relief period was applied
ASLB 26
• Apply impairment √
provisions prospectively on

561
Compendium of Accounting Standards for Local Bodies (ASLBs)

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
date of adoption or when
assets are recognised when
relief period was applied
ASLB 27
• Three year relief for
recognition and/or √
measurement of assets and
changing the accounting
policy to measure assets
ASLB 31
• Three year relief for
recognition and/or √
measurement of assets and
changing the accounting
policy to measure assets
• Recognise all internally
√
generated intangible assets
ASLB 32
• Three year relief for
recognition and/or
measurement of assets √
and/or liabilities and
changing the accounting
policy to measure assets

562
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
and/or liabilities
• Measure liability either
under financial liability √
model or grant of a right to
the operator model on date
of adoption or when asset is
recognised if relief period is
adopted
Applying deemed cost to √
assets and/or liabilities
Applying deemed cost to √
assets acquired in a non-
exchange transaction
Using deemed cost for √
investments in controlled
entities, jointly controlled
entities and associates
Preparing reconciliations √
during transitional period
ASLB 35 √
• Relief to recognise
and/or measure interests in √
controlled entity

563
Compendium of Accounting Standards for Local Bodies (ASLBs)

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
• Elect to not eliminate
inter-entity balances,
transactions, revenue and
expenses
• Controlled entity
becomes first-time adopter
later or earlier than its
controlling entity
• Not present financial
statements as consolidated
financial statements if three √
year relief for recognition
and/or measurement and/or
elimination option was
adopted
• Assess if investment
entity on date of adoption √ √
and determine fair value at
that date)
ASLB 36
• Relief to recognise
and/or measure interest in √
associate
• Elect to not eliminate

564
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
share in associate‘s surplus √
and deficit
• Associate becomes first-
time adopter later or
earlier than its controlling
entity
• Not present investment
√ √
in associates in
consolidated financial
statements if three year
relief for recognition and/or
measurement and/or
elimination option was
adopted
ASLB 37
• Measure investment in
joint venture previously √
accounted for using
proportionate consolidation

565
Compendium of Accounting Standards for Local Bodies (ASLBs)

Transitional exemption or Transitional Transitional exemptions or
provision exemp- tions provisions that may be
or provisions applied or elected
that have to
be applied
Do not affect Do not affect Affect fair
fair fair presentation
presentation presentation and
and and compliance
compliance compliance with accrual
with accrual with accrual basis ASLB
basis ASLB basis ASLB
ASLB 39
• Three year relief for
recognition and/or
measurement of assets √ √
and/or liabilities and
changing the accounting
policy to measure assets
and/or liabilities
• Determine initial liability
for defined benefit and other √
long-term employee benefit
plans on date of adoption or
when relief period expired

• Recognise
increase/decrease on date
of adoption or when relief
period expires in opening
accumulated surplus/deficit

566
 First-Time Adoption of Accrual Basis Accounting Standards for Local Bodies

Appendix 1
Note: This Appendix is not a part of the Accounting Standard for Local
Bodies. The purpose of this Appendix is only to bring out the major
differences, if any, between Accounting Standard for Local Bodies (ASLB) 33
and the corresponding International Public Sector Accounting Standard
(IPSAS) 33, ‗First-Time Adoption of Accrual Basis IPSAS’.
Comparison with IPSAS 33, ‘First-Time Adoption of Accrual Basis
IPSASs’
1. Different terminologies have been used in ASLB 33 as compared to
corresponding IPSAS 33, e.g., the terms ‗balance sheet‘, ‗statement of
income and expenditure‘ and ‗entities‘ have been used in place of
‗statement of financial position‘, ‗statement of financial performance‘
and ‗public sector entities‘.
2. As compared to IPSAS 33, ASLB 33 does not require to prepare the
Statement of changes in net assets/ equity.
3. The following paragraphs of IPSAS 33 have been deleted. In order to
maintain consistency with the corresponding IPSAS 33, the paragraph
numbers have been retained:
(i) In respect of assets as prescribed in Paragraph 64 of ASLB, the
deemed cost has been prescribed as municipal value in place of
fair value as prescribed in IPSAS. In this regard, paragraph no
66, 67, 69, 70 and 148 have been deleted.
(ii) Paragraphs 90-93 pertaining to financial reporting in
hyperinflationary economies as it may not be relevant for Local
Bodies in Indian context.
(iii) Paragraphs 41, 111-124 pertaining to financial instruments have
been deleted as ASLBs on this subject are not proposed to be
formulated/ issued in the future. However, a separate Guidance
on ‗Financial Instruments‘ is proposed to be issued that will deal
with this subject in detail including the specific transitional
provisions.
(iv) Paragraph 153 pertaining to transitional provision has been
deleted as this ASLB contains all transitional provisions at one
place.

567
Compendium of Accounting Standards for Local Bodies (ASLBs)

(v) Paragraphs 154 & 154A-C pertaining to effective date have
been deleted as ASLB 33 would become mandatory for Local
Bodies in a State from the date specified by the State
Government concerned.
4. Paragraph 2A inserted with regard to applicability of ASLBs in line with
other issued ASLBs.
5. IPSAS 5, ‗Borrowing Costs‘ permits ‗benchmark treatment‘ (expense-
off) and ‗allowed alternative treatment‘ (capitalisation in case of
qualifying assets). The benchmark treatment has not been retained in
corresponding ASLB 5. Only the treatment prescribed under ‗allowed
alternative treatment‘ has been retained but the term ‗allowed
alternative treatment‘ has not been used in ASLB 5. (deleted
paragraphs 88-89, modified paragraphs 44-45, 90).
6. ASLB 33 prescribes to use the requirements of ASLB 5 prospectively
from the date of adoption of ASLBs.
7. Transitional provisions pertaining to ‗Social Benefits‘ have been
incorporated in ASLB 33.
8. Footnotes have been appended in ASLB 33 with regard to subjects
that may not be relevant for Local Bodies in current scenario or on
which ASLBs are yet to be issue.
9. The following paragraphs appear as ‗Deleted‘ in IPSAS 33. In order to
maintain consistency with paragraph numbers of IPSAS 33, the
paragraph numbers are retained in ASLB 33:
(i) Paragraph
(ii) Paragraph 106-107
10. Consequential changes resulting from the above departures have
been made in ASLB 33.

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