Bulletin
2000/2 - 7 March 2000
The Financial Reporting Council (FRC) met on 28 February 2000, its fourth meeting since its membership was announced by the Treasurer in September 1999.
The FRC is the peak body responsible for the broad oversight of the accounting standard setting process for the private, public and non-profit sectors. It comprises key stakeholders from the business community, the professional accounting bodies, governments and regulatory agencies.
- Key functions of the FRC are to advise the Government on the accounting standard setting process and the development of international accounting standards, and to determine the broad strategic direction of the standard setter, the Australian Accounting Standards Board (AASB).
- The legislation formally establishing the new accounting standard setting arrangements came into effect on 1 January 2000.
The 28 February meeting expressed the hope that the Treasurer would shortly be in a position to appoint the Chair of the new AASB. The nine members of the AASB other than the Chair were formally appointed by the FRC on 15 February 2000.
The FRC gave further consideration to how it will carry out its statutory functions, particularly as they relate to the operations of the AASB. These functions include approving the AASB's priorities, business plan, budget and staffing arrangements, determining its broad strategic direction, and giving it directions, advice or feedback on matters of general policy and the Board's procedures. Arrangements for the AASB to report to the FRC will be central to the relationship and to the FRC's oversight role.
The FRC will advance this work over the next few weeks and announce its approach after considering proposals and advice to be provided by the AASB. In the meantime, it has re-stated its commitment to an open, transparent and consultative approach to the development of accounting standards.
As noted, part of the FRC's role is to give the AASB directions, advice or feedback on matters of general policy and the Board's procedures. In this context, the meeting noted the Senate's disallowance on 17 February 2000 of two provisions of accounting standard AASB 1015, `Acquisition of Assets', and briefly discussed issues of Board procedure which may have contributed to this outcome. The FRC agreed to return to these issues as part of its broader consideration of policies and procedures of the new Board.
The meeting also discussed progress in establishing a dedicated secretariat for the AASB. Considerable progress has been made over the last few months. It is hoped that the AASB can be operating from new premises at 530 Collins Street, Melbourne by late April/early May, with fitout and other plans already well advanced.
- This will mark the formal separation of relevant staff from the Australian Accounting Research Foundation - the body, established by the Australian Society of Certified Practising Accountants and The Institute of Chartered Accountants in Australia, which until now has provided secretariat support for the standard setting arrangements.
- Progress has also been made in respect of other aspects of this separation, including the transfer of physical assets and liability for employee entitlements, and in developing proposals for the new Board relating to the terms and conditions of employment of transferred staff.
The meeting gave further consideration to the question of funding of the new accounting standard setting arrangements. It was noted that funding for the remainder of 1999-2000, including the one-off costs of establishing the AASB in its premises at 530 Collins Street, Melbourne, was covered by existing stakeholder commitments. Discussion focussed on the need to secure ongoing funding for the three year period beginning 1 July 2000. The FRC will finalise its consideration of this issue shortly to enable the new Board to begin its work on the basis of funding certainty.
The meeting also discussed means for keeping the FRC fully informed of developments in national and international standard setting. Members emphasised the importance of maintaining broad information sources, including the AASB, stakeholder organisations, the International Accounting Standards Committee, the International Organisation of Securities Commissions, national standard setters in other countries, and the FRC secretariat.
The meeting further considered the role and composition of a new Urgent Issues Group which is to be established as a committee of the AASB. It agreed that the current Urgent Issues Group should continue its work for the time being under its existing Charter, pending review by the AASB and advice to the FRC.
For further information, please contact the secretariat of the Financial Reporting Council, c/- The Treasury, Parkes Place, Parkes ACT 2600.
|
Mr Michael Kooymans |
Mr Les Pascoe |
||
|
Ph: |
(02) 6263 3984 |
Ph: |
(02) 6263 3978 |
|
Fax: |
(02) 6263 2770 |
Fax: |
(02) 6263 2770 |
|
E-mail: |
E-mail: |
||