First Informal Meeting
25 October 1999
Outcomes of meeting held at Level 42, 242 Exhibition Street, Melbourne on 25 October 1999.
Attendance
Members:
Mr Paul Rizzo (Chairman)
Ms Elizabeth Alexander, AM
Mr Mark Armour (as informal alternate to Mr Hall)
Mr David Edwards (as informal alternate to Mr McGregor)
Ms Veronique Ingram
Mr David Jackson
Mr Jeffrey Lucy
Mr Charles Macek
Ms Jan McCahey
Mr Philip Mussared (as informal alternate to Mr Challen)
Mr Robert Nottle, CBE
Mr Michael Ullmer
Dr Diana Wright
Observers:
Mr Ian Mackintosh, Chairman, Public Sector Accounting Standards Board
Ms Anne Morant, Department of Finance and Administration
Mr Ken Spencer, Chairman, Australian Accounting Standards Board
FRC secretariat:
Mr Michael Kooymans
Mr Les Pascoe
Apologies:
Mr Don Challen
Mr Leigh Hall
AM
Mr Graeme McGregor AO
Mr Gary Potts.
Adoption of agenda
The draft agenda was adopted (with some adjustments to the order of business). It was noted that decisions of the Council taken before it is formally established under the Australian Securities and Investments Commission Act 1989 will need to be ratified once appointments to the Council have been formalised.
It was agreed that the Chairs of the Australian Accounting Standards Board (AASB) and Public Sector Accounting Standards Board (PSASB) be invited to address the meeting.
Remarks by AASB and PSASB Chairs
Mr Spencer and Mr Mackintosh welcomed the new accounting standard setting arrangements and outlined the views of the existing Boards on issues to be considered during the transition period. Mr Spencer offered to prepare a report on international developments in accounting standard setting for circulation to members of the Council.
(Action: Mr Spencer)
Agenda item 1: Role of the FRC and draft Charter
The meeting considered a secretariat paper which outlined the role of the Council and provided a draft Charter for consideration.
The meeting agreed that a Charter not be adopted at this stage. The secretariat was asked to revise the draft Charter in light of comments by Council members and provide a new draft for consideration at a later meeting.
It was also agreed that the secretariat would put forward views on mechanisms through which the Council could be kept informed of developments in national and international standard setting.
(Action: secretariat)
Agenda item 2: FRC administrative arrangements
The meeting considered a secretariat paper on administrative and other arrangements that the Council may wish to adopt.
The meeting agreed that, if a stakeholder body sees a need to do so, it can put forward (for consideration by the Treasurer) the name of an alternate member to attend future meetings in the member's stead. It was agreed that the use of alternates should be kept to a minimum.
It was also agreed that the Chairman would consult Council members about the appointment of a Deputy Chairman of the Council.
The meeting adopted the rules of procedure proposed in an attachment to the secretariat paper, noting that:
- in the interests of transparency, the agenda for each meeting of the Council would be circulated to stakeholder organisations prior to each meeting;
- members would circulate agenda and other papers to their stakeholder organisations by exception only; it was recognised that the full involvement of stakeholder organisations would need to be secured through consultation and briefings;
- media inquiries would be dealt with by the Chairman or Deputy Chairman; and
- to ensure wide dissemination of meeting outcomes, the Secretariat would publish a Bulletin (to be cleared by the Chairman) following each Council meeting.
The meeting agreed that the Chair or Deputy Chair of the AASB would be invited to attend meetings of the Council for appropriate agenda items.
It was agreed that the next meeting of the Council be held in about a month's time, with subsequent meetings held on a quarterly basis. A schedule of proposed meeting dates, to be developed by the secretariat in consultation with the Chairman, will be circulated to members.
(Action: Chairman; secretariat)
Agenda item 3: Status of legislation establishing the new accounting standard setting arrangements
The meeting considered a secretariat paper outlining the status of the Corporate Law Economic Reform Program Bill 1998.
Ms Ingram provided an update of events since the paper was prepared, advising that the Bill had been passed by both Houses and would come into operation on 13 March 2000. Ms Ingram outlined the amendments to the Bill which were moved in the Senate by the Opposition and the Democrats.
The meeting agreed that the secretariat would prepare a paper for circulation to members showing the amendments and sponsors' main arguments in support of them.
(Action: secretariat)
Agenda item 4: Appointments to the Australian Accounting Standards Board
Mr Mackintosh and Mr Spencer were not present for the discussion of this item. Mr Spencer had earlier suggested that it would be appropriate for the views of the current AASB and PSASB Chairs to be sought on appointments to the AASB, and offered to speak to the Chairman about the issue.
The meeting considered a Secretariat paper on this issue, a list of nominations provided by stakeholders for appointment to the AASB, and supporting resumes.
In relation to a possible Council recommendation to the Treasurer for appointment as Chair of the AASB, the meeting agreed that the Chairman would recommend to the Treasurer that the position be advertised in order to widen the field of potential candidates. It was also agreed that stakeholders be invited to provide the secretariat with any additional names that could be considered by the Council for possible recommendation to the Treasurer.
In relation to the appointment of other members of the AASB, the meeting agreed on a shortlist of 11 names. It was agreed that this short-list be provided to members and stakeholder organisations for further consideration with a view to reaching final decisions on appointments at the next Council meeting. The Council decided that the appointment of any members of the current AASB or PSASB should be for a period of two years, with other appointments being for three years.
It was agreed that the Chairman would consult Mr Spencer about his availability for a possible transitional or supporting role in the new standard setting arrangements.
(Action: Chairman; Council members; secretariat)
Agenda item 5: Establishment of other bodies
The meeting considered a secretariat paper discussing bodies that could be established by the Council or the AASB under the new standard setting arrangements.
The meeting approved the establishment of a new Urgent Issues Group (UIG), as a committee of the AASB, to perform the functions currently performed by the existing UIG established by the accounting profession. It was also agreed that:
- with appropriate modifications to reflect the revised structure of the new standard setting arrangements, the Charter of the existing UIG form the basis of the Charter for the new UIG;
- subject to further consideration at a later meeting, the membership structure of the new UIG be the same as that of the existing UIG; and
- members of the new UIG be appointed by the Council on the basis of nominations from stakeholder bodies and the other organisations to be represented on the UIG.
The meeting noted that Council members would provide the secretariat with nominations for appointment to the UIG and that these would be considered at a later meeting of the Council. The question of whether the AASB Chair or Deputy Chair would chair the UIG would be considered as part of the appointment process.
The meeting also agreed that Project Advisory Panels of relevant stakeholder interests should be established for each project being undertaken by the AASB.
It was noted that the need for any formal consultative mechanisms, committees or advisory groups to support the Council's own work would be assessed over time as experience is gained with the new standard setting arrangements.
(Action: Council members; secretariat)
Agenda item 6: AASB secretariat and funding arrangements
The meeting considered an FRC secretariat paper on secretariat arrangements for the AASB and the funding arrangements required to support the new standard setting arrangements.
In relation to the AASB secretariat, the meeting agreed to authorise the FRC secretariat to:
- discuss transitional issues with the accounting bodies on the basis that the accounting technical staff and related administrative staff of the Australian Accounting Research Foundation would be transferred to the new AASB; and
- investigate accommodation options in the Melbourne CBD and report back to the Council.
In relation to funding of the standard setting arrangements, the meeting agreed that members of Council would consult their respective stakeholder organisations concerning financial support for the standard setting process. It was also agreed that the secretariat would discuss with the accounting bodies their likely level of financial support for the new arrangements. In addition, the secretariat will examine, for consideration at a later meeting, possible mechanisms to cover any funding shortfall.
(Action: Council members; secretariat)
Agenda item 7: Other business
There were no other items of business.