Australian Accounting Standards Board Work Programme
Progress made on 2004-05 work programme
FRC Year 2005 Strategy — Adoption of IASB Standards and Framework
Implementing the FRC Year 2005 strategic directive involved the adoption of the IASB Framework and the Accounting Standards as listed below.
Framework for preparation and presentation of financial statements |
AASB 101 Presentation of Financial Statements |
AASB 102 Inventories |
AASB 107 Cash Flow Statements |
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors |
AASB 110 Events After the Balance Sheet Date |
AASB 111 Construction Contracts |
AASB 112 Income Taxes |
AASB 114 Segment Reporting |
AASB 116 Property, Plant and Equipment |
AASB 117 Leases |
AASB 118 Revenue |
AASB 119 Employee Benefits |
AASB 120 Accounting for Government Grants and Disclosure of Government Assistance |
AASB 121 The Effects of Changes Foreign Exchange Rates |
AASB 123 Borrowing Costs |
AASB 124 Related Party Disclosures |
AASB 127 Consolidated and Separate Financial Statements |
AASB 128 Investments in Associates |
AASB 129 Financial Reporting in Hyperinflationary Economies |
AASB 130 Disclosures in the Financial Statements of Banks and Similar Financial Institutions |
AASB 131 Interests in Joint Ventures |
AASB 132 Financial Instruments: Disclosure & Presentation |
AASB 133 Earnings per Share |
AASB 134 Interim Financial Reporting |
AASB 136 Impairment of Assets |
AASB 137 Provisions, Contingent Liabilities and Contingent Assets |
AASB 138 Intangible Assets |
AASB 139 Financial Instruments: Recognition & Measurement |
AASB 140 Investment Property |
AASB 141 Agriculture |
AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards |
AASB 2 Share-based Payment |
AASB 3 Business Combinations |
AASB 4 Insurance Contracts |
AASB 5 Non-Current Asset as Held for Sale and Discontinued Operations |
AASB 6 Exploration for and Evaluation of Mineral Resources |
Implementing the FRC Year 2005 strategic directive also involved consequential amendments to remaining AASB Standards |
AASB 1004 Contributions(r) issued AASB 1031 Materiality(r) issued AASB 1023 General Insurance Contracts(r) issued AASB 1038 Life Insurance Contracts(r) issued AASB 1039 Concise Financial Reports(r) AASB 1046A Amendments to Accounting Standard AASB 1046 |
In addition, the AASB issued eleven amending standards during the year to reflect amendments made by the IASB to its Standards and some refinements made by the AASB and issued AASB 1048 Interpretation and Application of Standards.
IASB-related projects involving significant AASB input
Project |
IASB status |
Outcomes to 30 June 2005 |
Extractive Activities |
IASB research project |
AASB leads a team (Canada, Norway and South Africa) researching issues for consideration by the IASB and National Standard Setters (NSS). Education session held with IASB in April 2005. |
Joint Ventures |
IASB research project |
AASB leads a team (Hong Kong, Malaysia and New Zealand) researching issues for consideration by the IASB and NSS. A questionnaire was prepared and responses analysed, consultation with project panel and papers for consideration by IASB in preparation. |
Intangible Assets |
IASB research project |
Project programme, issues and approach agreed by the IASB. AASB is researching issues for consideration by the IASB and NSS. Includes implementation review of IFRS 3/AASB 3. |
Insurance Contracts Phase 2 |
IASB active project |
AASB contributes through Working Group and a staff member on IASB Project Team. |
IASB-related projects involving monitoring by the AASB
Project |
IASB status |
Outcomes to 30 June 2005 |
Business Combinations Phase 2 |
IASB active project |
Exposure Draft approved for issue. |
Non-financial Liabilities |
IASB active project |
Exposure Draft approved for issue. |
Reporting Comprehensive Income |
IASB research project |
Monitoring of project continues. |
Revenue and related Liabilities |
IASB research project |
Monitoring of project continues. |
Consolidation (including Special Purpose Entities) |
IASB active project |
Exposure Draft approved for issue. Monitoring project in respect of special purpose entities continues. |
Post-employment Benefits (convergence) |
IASB active project |
Monitoring of project continues. |
Measurement |
IASB research project |
Monitoring of project continues. |
Leases |
IASB research project |
Monitoring of project continues. |
Financial Instruments |
IASB research project |
Monitoring of project continues. Australia is represented on the IASB Advisory Working Group. |
Small and Medium-sized Entities |
IASB research project |
Monitoring project and submissions made on questionnaire. |
Where the AASB designates a project as one that it should monitor closely, to the extent possible, the Board considers IASB papers as they are considered by the IASB, and endeavours to provide the IASB with comments and feedback on a continuous and timely basis.
IPSASB-related projects involving monitoring by the AASB
Project |
PSC status |
Outcomes to 30 June 2005 |
Non-exchange Revenues |
PSC active project |
The AASB decided it will issue the IPSASB Exposure Draft to coincide with its issue by IPSASB. |
Social Policy Obligations |
PSC active project |
Monitoring of project continues. Australia is represented on the IPSASB Steering Committee. |
Budget Reporting |
PSC active project |
Monitoring of project continues. |
GAAP/GFS convergence |
PSC active project |
Monitoring of project continues. This project may affect the AASB’s domestic work on GAAP/GFS convergence. Australia is represented on the IPSASB Technical Working Group. |
Amending IPSASs for IASB Improvements |
PSC active projects |
Monitoring of project continues. |
Impairment, Non-cash flow Assets |
PSC active project |
Monitoring of project continues. |
Where the AASB designates a project as one that it should monitor closely, to the extent possible, the Board (or a subcommittee of the Board) considers IPSASB papers as they are considered by the IPSASB, and endeavours to provide the IPSASB with comments and feedback on a continuous and timely basis.
New Zealand convergence exercise
In adopting the IASB standards, both the AASB and the New Zealand Financial Reporting Standards Board (FRSB) have removed optional treatments, added some disclosure requirements and catered for not-for-profit entities. In some cases, the amendments and additions made by the AASB are different from the amendments and additions made by the FRSB. It may be considered that, since both Boards are adopting the same set of IASB standards, they would end up with the same standards. However, the respective starting points and regulatory environments of the two boards are different and have given rise to some differences in the ‘adopted standards’.
The Boards have undertaken to work together to remove as many differences as possible in keeping with the need for Trans-Tasman co-operation on regulatory matters. This co-operation is reflected in the appointment of the Chairman of the New Zealand FRSB to the AASB and the AASB Chairman to the FRSB. In addition the Boards are considering proposals to share work and prepare common Board papers in respect of monitoring and involvement in IASB and IPSASB projects.
Domestic GAAP/GFS convergence project
UIG interpretation projects
The UIG completed its review of IFRIC Interpretations and existing UIG Abstracts for consistency with Australian equivalents to IASB Standards. As part of this programme nine UIG Abstracts were withdrawn in 2003-04 and the remaining 45 Abstracts were withdrawn in 2004-05. Pursuant to its Charter, the UIG continued to monitor the work programme of the IASB’s IFRIC, making submissions on matters being considered by IFRIC, including exposure drafts, and reviewing IFRIC Interpretations for adoption in Australia. The UIG also maintained its liaison with IFRIC on issues relating to gold hedging, service concessions, electricity derivatives, employee share plan loans, presentation of employee entitlements as financial liabilities and production taxes.
AASB work programme 2005-06
The AASB work programme approved by the FRC includes:
- participating in and monitoring the projects of both the IASB/IFRIC and the IPSASB;
- progressing the harmonisation of GAAP and GFS reporting and a number of other domestic projects;
- providing comments on the IASB/IFRIC and to the IPSASB on a wide range of their outputs. AASB staff will regularly provide comment on IASB/IFRIC and IPSASB meeting papers. When the Board designates a topic as one in which Australia has a particular interest, the Board will also be involved in commenting on IASB/IFRIC and IPSASB meeting papers. The Board will also be involved in commenting on Exposure Drafts and other consultative documents issued by the IASB/IFRIC and IPSASB; and
- providing staff briefings to Australians on the IFRIC, the IPSASB and on IPSASB Steering Committees on Non-exchange Revenues and Social Policy Obligations, just prior to meetings.
Generally speaking, the AASB will be participating in and monitoring the projects of both the IASB/IFRIC and the IPSASB and progressing its own domestic projects, many of which relate mainly to the public sector. It is planned to work in conjunction with our New Zealand colleagues in respect of the IASB/IFRIC and IPSASB projects.
During 2005-06, the AASB is likely to spend a much greater amount of time on developing the research projects that it is leading on behalf of the IASB. Among other things, this involves preparing papers for consideration by the IASB.
The most time-consuming of the AASB’s domestic projects is likely to remain the convergence of GAAP and GFS reporting.
Comment will be provided to the IASB/IFRIC and to the IPSASB on a wide range of their outputs. AASB staff will regularly provide comment on IASB/IFRIC and IPSASB meeting papers. When the Board designates a topic as one in which Australia has a particular interest, the Board will also be involved in commenting on IASB/IFRIC and IPSASB meeting papers. The Board will also be involved in commenting on Exposure Drafts and other consultative documents issued by the IASB/IFRIC and IPSASB.
AASB staff will also provide briefings to Australians on the IPSASB, on IPSASB Steering Committees on Non-exchange Revenues and Social Policy Obligations, and on the IASB Working Groups on Insurance, Reporting Comprehensive Income and Financial Instruments, just prior to meetings.
IASB-related projects involving significant AASB input
Project |
IASB status |
Proposed actions |
Extractive Activities |
IASB research project |
AASB leading a team (Canada, Norway and South Africa) to develop draft recommendations for consideration by the IASB. |
Joint Ventures |
IASB research project |
AASB leading a team (Hong Kong, Malaysia and New Zealand) to develop draft recommendations for consideration by the IASB. |
Intangible Assets |
IASB research project |
AASB developing papers for consideration by the IASB. Includes implementation review of IFRS 3/AASB 3. |
Insurance Contracts Phase 2 |
IASB active project |
AASB contributing through Project Team membership and input to the Australian member of Working Group. |
Liability/Revenue Recognition |
IASB active project |
AASB contributing through Project Team membership. |
IASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
Project |
IASB status |
Proposed actions |
Non-financial Liabilities (Provisions) |
IASB active project |
Designated as a project that the AASB should monitor closely. |
Business Combinations Phase 2 |
IASB active project |
Designated as a project that the AASB should monitor closely. |
Reporting Comprehensive Income |
IASB research project |
Designated as a project that the AASB should monitor closely. AASB staff providing input to the Australian member of the Working Group. |
Consolidation (including Special Purpose Entities) |
IASB active project |
Designated as a project that the AASB should monitor closely. |
Financial Instruments |
IASB research project |
Monitor. AASB staff providing input to the Australian member of the Working Group. |
Post-employment Benefits (convergence) |
IASB active project |
Monitor. |
Measurement |
IASB research project |
Monitor. |
Leases |
IASB research project |
Monitor. |
Small and Medium-sized Entities |
IASB research project |
Monitor. |
Where the AASB has designated a project as one that it should monitor closely, to the extent possible the Board intends to consider IASB papers as they are considered by the IASB, and to provide the IASB with comments and feedback on a continuous and timely basis.
Other IASB projects will be monitored as closely as possible by AASB staff, which will report issues of concern to the Board on an exception basis.
IFAC-IPSASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
Project |
IPSASB status |
Proposed actions |
Non-exchange Revenues |
IPSASB active project |
The AASB has agreed to the IPSASB ED as the basis for an AASB ED and is monitoring this project closely. Australia is represented on the PSC Steering Committee. |
Social Policy Obligations |
IPSASB active project |
Designated as a project that the AASB should monitor closely. Australia is represented on the IPSASB Steering Committee. |
GAAP/GFS convergence |
IPSASB active project |
Designated as a project that the AASB should monitor closely. This project may affect the AASB’s domestic work on GAAP/GFS convergence. Australia is represented on the IPSASB Technical Working Group. |
Heritage Assets |
IPSASB active project |
Designated as a project that the AASB should monitor closely. |
Budget Reporting |
IPSASB active project |
Monitor. |
Amending IPSASs for IASB Improvements |
IPSASB active projects |
Monitor. |
Where the AASB has designated a project as one that it should monitor closely, to the extent possible the Board (or a subcommittee of the Board) intends to consider IPSASB papers as they are considered by the IPSASB, and to provide comments and feedback on a continuous and timely basis.
Other IPSASB projects will be monitored as closely as possible by AASB staff, which will report issues of concern to the Board on an exception basis.
New Zealand Convergence Exercise
In adopting the IASB standards, both the AASB and the New Zealand FRSB have removed optional treatments, added some disclosure requirements and catered for not-for-profit entities. In some cases, the amendments and additions made by the AASB are different from the amendments and additions made by the FRSB. It may be considered that, since both Boards are adopting the same set of IASB standards, they would end up with the same standards. However, the respective starting points and regulatory environments of the two Boards are different and have given rise to some differences in the ‘adopted standards’.
The Boards have undertaken to work together to remove as many differences as possible in keeping with the need for Trans-Tasman co-operation on regulatory matters. Much of this work will take place in 2005-06.
Domestic GAAP/GFS convergence project
Project |
Status |
Proposed actions |
GAAP/GFS convergence — Phase 1 — whole of government (including sector reporting) |
Consultation Paper comments considered — ED about to be released |
Consider comments on ED, revise AAS 31 Financial Reporting by Governments and consider the need for other ‘new’ standards. |
GAAP/GFS convergence — Phase 2 — entities within the GGS (including government departments) |
Consider flow on from Phase 1. See also the work on Government Department Review. |
|
GAAP/GFS convergence — Phase 3 — other public sector entities (including local governments, universities & GBEs) |
Consider flow on from Phases 1 and 2. See also the work on Local Government Review. |
Other domestic projects
Project |
Status |
Proposed actions |
Definition of Not-for-Profit Entities |
Definition used in existing AASB standards |
Develop guidance to assist constituents to distinguish for-profit and not-for-profit entities. Consider New Zealand guidance on Public Benefit Entities. |
Government Department review (non-GAAP/GFS convergence issues) |
Draft ED in progress |
Issue ED and revise AAS 29 Financial Reporting by Government Departments. This project is expected to be affected by GAAP/GFS convergence. |
Local Government review |
ED 125 comments considered |
Deal with revenue recognition via IPSASB process and revise AAS 27 Financial Reporting by Local Governments. This project may be affected by GAAP/GFS convergence. |
Superannuation Plans |
AAS 25 (1993) |
Develop an ED and revise AAS 25 to take account of the current environment in which plans operate. |
Managed Investment Schemes |
Impacted by Financial Instruments standards |
Develop recommendations for the schemes themselves and the managers of the schemes. |
Related Party Disclosures in the Public Sector |
Currently scoped out of AASB 1017, AAS 22 and AASB 124 |
Examine the specific issues associated with the public sector in light of existing practice in the Australian public sector and the IPSASB Standard on related parties and undertake the normal due process. |
UIG/IFRIC interpretations
Project |
Status |
Proposed actions |
Public Sector Contributions by Owners |
UIG Interpretation 1038 |
Revise for AASB decisions re definition of ‘contributions by owners’ and consider measurement issues. |
Inventory Rebates and Discounts |
UIG Interpretation in progress |
Develop Australian Interpretation as IFRIC declined to address issues. |
Service Concessions |
IFRIC Draft Interpretations |
Closely monitor the project. |
Electricity Derivatives |
Pending at IFRIC Agenda Committee |
Further research requested. Consulting with Australian industry. |
IFRIC projects |
Draft Interpretations as they arise |
Issue for comment in Australia and develop submissions. |
IFRIC projects |
Active projects as they arise |
Monitor. |
Domestic projects |
Active projects as they arise |
Carry out normal UIG due process. |
Where the UIG has designated an IFRIC project as one that it should monitor closely, to the extent possible the UIG intends to consider IFRIC papers as they are considered by the IFRIC, and to provide the IFRIC with comments and feedback on a continuous and timely basis.
Other IFRIC projects will be monitored as closely as possible by AASB staff, which will report issues of concern to the UIG on an exception basis. AASB staff will also provide briefings to the New Zealand member of the IFRIC prior to IFRIC