Home > Reports > FRC & AASB Annual Report 2002-2003 - AASB's Work program 1 July 2002 to 30 June 2003

Appendix F

AASB work program 2003-04

In July 2002, the FRC issued a strategic direction to the AASB to adopt IASB Standards by 2005 (FRC Bulletin 2002/4) and in December 2002 and April 2003, the FRC issued a strategic direction to the AASB to harmonise GAAP and GFS (Government Finance Statistics) reporting as an urgent priority (FRC Bulletins 2002/5 & 2003/1).

The IASB plans to have issued its `2005 stable platform' of IASB Standards by 31 March 2004. The HOTARAC working party on GAAP/GFS convergence is expected to advocate that an ED should be issued in December 2003, and revised Standards shortly thereafter. Accordingly, an enormous amount of work is expected of the AASB over the next 12 months. Furthermore, the Urgent Issues Group (UIG) will also be reviewing the existing UIG Abstracts in order to adopt the International Interpretations of Standards.

The AASB's standard setting work program for the year to 30 June 2004 has been approved by the FRC.

The work program for the year from 1 July 2003 comprises:

1. adopting IASB Standards by 1 January 2005;
2. harmonising GAAP and GFS reporting in the public sector;
3. other domestic standards projects;
4. ongoing IASB projects;
5. ongoing IFAC PSC projects; and
6. UIG interpretation projects.

1 IASB Adoption Projects

Project	Status1, 2	Proposed actions3
Conceptual framework	SAC 2 SAC 3 SAC 4	Revise AASB Framework
Presentation of financial statements	AASB 1018 AASB 1034 ED	Revised Standard incorporating areas currently covered by AASB 1018 and AASB 1034
Inventories	AASB 1019 ED	Further ED and revised AASB 1019
Cash flow statements	AASB 1026 ED 110	Revised AASB 1026
Accounting policies	AASB 1001 ED	Revised AASB 1001
After balance date events	AASB 1002 ED	Revised AASB 1002
Construction contracts	AASB 1009	Revised AASB 1009
Income taxes	AASB 1020	ED and revised AASB 1020
Segment reporting	AASB 1005	ED and revised AASB 1005
Property, plant & equipment	AASB 1015 AASB 1021 AASB 1041	Revised AASB Standard on PP&E incorporating areas currently covered by AASB 1015, AASB 1021 and AASB 1041
Leases	AASB 1008 ED	Revised AASB 1008
Revenue/government grants	AASB 1004	ED and revised AASB 1004
Employee benefits	AASB 1028	ED and revised AASB 1028
Foreign exchange	AASB 1012 ED	Revised AASB 1012
Borrowing costs	AASB 1036 ED 111	Revised AASB 1036
Related party disclosures	AASB 1017 ED	Revised AASB 1017
Consolidations	AASB 1024 ED	Revised AASB 1024
Investments in associates	AASB 1016 ED	Revised AASB 1016
Hyperinflationary economies	ED 112	New AASB Standard
Financial Institutions disclosure	AASB 1032 ED 113	Revised AASB 1032
Joint ventures	AASB 1006	ED and revised AASB 1006
Financial instruments: disclosure and presentation	AASB 1033 ED	Revised AASB 1033
Project	Status1,2	Proposed actions3
Earnings per share	AASB 1027 ED	Revised AASB 1027
Interim reporting	AASB 1029	ED and revised AASB 1029
Discontinuing operations	AASB 1042	ED and revised AASB 1042
Provisions	AASB 1044	ED and revised AASB 1044
Intangible assets	ED 109	New AASB Standard
Financial instruments: recognition & measurement	ED	New AASB Standard
Investment property	ED 103	New AASB Standard
Agriculture	AASB 1037 ED 114	Revised AASB 1037
First-time adoption of international financial reporting standards	ED 107	New AASB Standard
Share-based payment	ED 108	New AASB Standard
Business combinations phase I	AASB 1013 AASB 1015 ED 109	Revised AASB Standard on Business Combinations incorporating areas currently covered by AASB 1013 and AASB 1015
Impairment of Assets	AASB 1010 ED 109	Revised AASB 1010
Insurance phase I	AASB 1023 AASB 1038	ED and revised AASB 1023 and AASB 1038
Extractive industries phase I	AASB 1022	ED and revised AASB 1022

2 GAAP / GFS Convergence Project

Project	Status	Proposed actions
GAAP/GFS harmonisation	AAS 31	Participate in HOTARAC Working Group Work and liaise with AASB Project Advisory Panel Issue an ED

3 Domestic Standards Projects

Domestic projects on which action is expected

Project	Status	Proposed actions
Director and executive disclosures by disclosing entities	ED 106 Part 1	Issue a revised Standard and withdraw the sections of AASB 1017 and AASB 1034 that presently deal with this topic for disclosing entities
Government departments review (may be affected by GAAP/GFS harmonisation)	AAS 29	Issue an ED proposing to revise AAS 29 to broaden its scope and focus on key issues, including revenue recognition
Local Government review (may be affected by GAAP/GFS harmonisation)	AAS 27	Issue an ED proposing to revise AAS 27 and focus on key issues, including revenue recognition
Parent entity reports	Draft research report	Make recommendations to Treasury regarding parent entity reports

Domestic projects unlikely to be progressed

There are a number of projects that could be progressed in 2003-2004 if the staff and Board time were available.

Superannuation plans

AAS 25 Financial Reporting by Superannuation Plans was last issued in 1993, and the environment in which plans operate has changed substantially. APRA is also proposing new prudential reporting requirements that will take regulatory reporting and general purpose financial reporting further apart. Lack of progress on this topic is viewed as a high risk area for the AASB.

Managed investment schemes (MIS)

MIS is closely related to Superannuation Plan issues. ASIC has long seen this topic as an important one for the AASB to address from the point of view of the schemes themselves and the managers of the schemes.

Segment reporting in the public sector

Public sector entities are currently scoped out of the AASB 1005 segment reporting requirements. The AASB needs to examine the specific issues associated with the public sector in light of the recent PSC Standard on segment reporting and undertake the normal due process.

Related party disclosures in the public sector

Public sector entities are currently scoped out of AASB 1017 and AAS 22 on related party disclosures. The AASB has undertaken preliminary work in this area, but needs to devote more time to considering the issues before an ED could be issued.

Not-for-profit entities

Not-for-profit entities need to apply most of the existing AASB Standards, but there are selected issues of particular relevance to these entities that the AASB has yet to address.

4 Ongoing IASB Projects

Project	Status	Proposed actions
Business combinations phase II	Monitoring IASB progress	Issue ED and continue monitoring IASB progress
Research and development	Monitoring IASB progress	AASB staff to prepare papers for consideration by the AASB and IASB
Performance reporting	Field visits	Issue ED and continue monitoring IASB progress
Post-employment benefits	Monitoring IASB progress	Issue ED and continue monitoring IASB progress
Deposit-taking, lending and securities activities	Monitoring IASB progress	Issue ED and continue monitoring IASB progress
Service concessions	AASB member of a Working Party	Likely to be an IFRIC issue that the AASB will monitor
Insurance phase II	Monitoring IASB progress	Continue monitoring IASB progress
Extractive industries (long-term project brief)	AASB-led project	AASB staff to prepare papers for consideration by the AASB and IASB
Intangible assets	AASB-led project	AASB staff to prepare papers for consideration by the AASB and IASB
Consolidation and SPEs	Monitoring IASB progress	Continue monitoring IASB progress
Revenue, liabilities and equity	Monitoring IASB progress	Issue ED and continue monitoring IASB progress

5 Ongoing IFAC PSC Projects

Project	Status	Proposed actions
Non-exchange revenues	AASB 1004	Brief Australia's representative on the PSC Steering Committee and monitor the Steering Committee's work
Social policy obligations	AAS 31 and AASB 1044	Brief Australia's representative on the PSC Steering Committee and monitor the Steering Committee's work
Budgetary reporting	--	Monitor the work of the PSC Steering Committee
Impairment, non-cash flow assets	AASB 1010	Monitor the work of the PSC
GAAP/GFS convergence	PSC/IMF working group OECD task force	Participate in the working group

6 UIG Interpretation Projects

The UIG will review the existing 52 Abstracts to identify changes in practice expected from 2005 under the adoption of the International Standards and Interpretations. In rare cases, Australian circumstances may warrant the retention of particular differences, which the UIG would address with the AASB, in line with the AASB's reserve power of veto over UIG Abstracts. Abstracts addressing Australian issues, such as Abstract 52 Income Tax Accounting under the Tax Consolidation System, would be expected to be retained beyond 2005 and would be reviewed by the UIG for consistency with the Australian equivalents to IASB Standards.

Pursuant to its Charter, the UIG is responsible for monitoring the work program of the IASB's IFRIC, making submissions on matters being considered by IFRIC, including exposure drafts, and reviewing IFRIC Interpretations. For example, IFRIC issued its first Draft Interpretation, D1 Emission Rights in May 2002, and the UIG has already had several discussions on and consulted on this topic, particularly to consider whether the Draft Interpretation appropriately addresses renewable energy certificates arising under the Australian mandatory renewable energy scheme.

Interpretation issues concerning existing Australian Standards are also expected to continue to be addressed during the next year, such as superannuation disclosures by employers under AASB 1028 Employee Benefits. The UIG interprets the requirements in Australian Standards where they are unclear or are being applied in circumstances not envisaged when the standards were developed.

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1 There are AAS series equivalents to most AASB Standards - these have not been referenced for the sake of brevity.

2 The AASB issued Invitations to Comment on the IASB's Improvements projects, which were later converted into EDs. References to `ED' without a number are references to those Invitations to Comment.

3 As a result of the adoption process, the AASB Standards will be renumbered - the existing numbers have been referenced for convenience.