Appendix E
Australian Accounting Standards Board work programme
Progress made on 2005-06 work programme
The AASB’s progress on its 2005-06 work programme is set out below:
IASB-related projects involving significant AASB input
Project |
IASB status |
Outcomes to 30 June 2006 |
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 July 2005. |
Intangible Assets |
IASB research project |
Project program, issues and approach agreed by the IASB. AASB is researching issues for consideration by the IASB and NSS. Selected issues papers provided to IASB advisors for comment. |
Insurance Contracts Phase 2 |
IASB active project |
AASB contributes through Working Group and a staff member on IASB Project Team. Briefed Australian representative on Working Group. |
Revenue and related Liabilities |
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 2006 |
Business Combinations Phase 2 |
IASB active project |
Exposure Draft (ED 139) issued. |
Non-financial Liabilities |
IASB active project |
Exposure Draft (ED 140) issued. |
Reporting Comprehensive Income |
IASB active project |
Exposure Draft (ED 148) of Stage A issued. |
Joint Ventures |
IASB active project |
Formerly an IASB research project led by the AASB – now an IASB/FASB convergence project. |
Post-employment Benefits (convergence) |
IASB active project |
Monitoring of project continues. |
Measurement |
IASB research project |
Commented on IASB Discussion Paper. |
Financial Instruments |
IASB research project |
Australia is represented on the IASB Working Group. Briefed Australian representative on Working Group. |
Small and Medium-sized Entities |
IASB research project |
Provided input on second IASB questionnaire. |
Where the AASB designates a project as one that it should monitor closely, to the extent possible, the Board, a subcommittee of the Board and/or AASB staff considers IASB papers as they are considered by the IASB, and endeavours to provide the IASB with comments and feedback on a timely basis.
IPSASB-related projects involving monitoring by the AASB
Project |
IPSASB status |
Outcomes to 30 June 2006 |
Non-exchange Revenues |
IPSASB active project |
Exposure Draft (ED 147) issued. |
Social Policy Obligations |
IPSASB active project |
Australia is represented on the IPSASB Steering Committee. Briefed Australian representative on Steering Committee. |
Budget Reporting |
IPSASB active project |
Monitoring of project continues. |
GAAP/GFS convergence |
IPSASB active project |
Australia is represented on the IPSASB Technical Working Group. |
Amending IPSASs for IASB Improvements |
IPSASB active projects |
IPSASB Exposure Draft issued. |
Where the AASB designates a project as one that it should monitor closely, to the extent possible, the Board. a subcommittee of the Board and/or AASB staff considers IPSASB papers as they are considered by the IPSASB, and endeavours to provide the IPSASB with comments and feedback on a timely basis.
New Zealand Convergence
The Boards have undertaken to work together to remove as many differences between the two sets of standards as possible, in keeping with the need for Trans-Tasman cooperation on regulatory matters. This cooperation is reflected in the appointment of the Chairman of the New Zealand Financial Reporting Standards Board (FRSB) to the AASB and the AASB Chairman to the FRSB. In addition the Boards are implementing measures to share work and prepare common Board papers in respect of monitoring and involvement in IASB and IPSASB projects. The Boards met jointly in May 2006 and plan to meet jointly again in 2007.
Domestic GAAP/GFS Convergence Project
Project |
Outcomes to 30 June 2006 |
GAAP/GFS convergence – Phase 1 – whole of government (including sector reporting). Reconciliation of government general purpose financial reporting with government finance statistics. |
Exposure Draft ED 142 Financial Reporting of General Government Sectors by Governments issued. Comments have been analysed and consultation with key constituents continues. |
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 and GBEs) |
Consider flow on from Phases 1 and 2. See also the work on Local Government Review. |
Other Domestic Projects
Project |
Outcomes to 30 June 2006 |
Not-for-profit Entities. Develop guidance to assist constituents to distinguish between for-profit and not-for-profit entities |
The AASB continues to issue transaction-neutral Standards to the extent feasible. The AASB has agreed in principle to issue the FRSB’s guidance on defining public benefit entities in an Exposure Draft and seek comment on its suitability in the Australian environment for identifying not-for-profit entities. |
Local Government review |
Detailed paragraph-by-paragraph review of AAS 27 Financial Reporting by Local Governments and considered issues papers on key issues. Considered the need for issues-based standards and relocation of material so as to avoid leaving a vacuum in this area of reporting. |
Government Department review (non-GAAP/GFS convergence issues) |
Detailed paragraph-by-paragraph review of AAS 29 Financial Reporting by Government Departments and considered issues papers on key issues, such as the distinction between controlled and administered items. Considered the need for issues-based standards and relocation of material so as to avoid leaving a vacuum in this area of reporting. |
Whole of Government review |
Detailed paragraph-by-paragraph review of AAS 31 Financial Reporting by Governments and considered issues papers on key issues. Considered the need for issues-based standards and relocation of material so as to avoid leaving a vacuum in this area of reporting. |
Revise AAS 25 Financial Reporting by Superannuation Plans to take account of the current environment in which plans operate |
Agreed on the nature, scope and objective of the project. |
Segment Reporting in the Public Sector. Examine the specific issues associated with the public sector in light of the IPSASB Standard on segment reporting and undertake the normal due process as currently scoped out of AASB 114 |
AASB considered input from public sector constituents on the suitability of the proposals in the IASB Exposure Draft (ED 145) on Segment Reporting to the public sector. |
Revise AASB 124 Related Party Disclosures and AASB 1046 Director and Executive Disclosures by Disclosing Entities to ensure IFRS compliance |
Following an Exposure Draft (ED 143) process, AASB 1046 has been withdrawn and the relevant disclosure requirements included in a revised AASB 124. |
Urgent Issues Group Interpretation Projects
The UIG developed two domestic Interpretations and approved four IFRIC Interpretations for application in Australia. Pursuant to its Charter, the UIG continued to monitor the work programme of the IASB’s IFRIC, making submissions on matters being considered by the IFRIC, including exposure drafts, and reviewing IFRIC Interpretations for adoption in Australia. The UIG also maintained its liaison with IFRIC on issues relating to inventory rebates and discounts, service concessions, electricity derivatives, employee share plan loans, presentation of employee entitlements as financial liabilities and petroleum production taxes.
Australian Accounting Standards Board
work programme 2006-07
The Board held a strategy meeting in March 2006 and identified four strategic areas on which it should focus, and which should guide the content and timing of its work programme.
- The Board’s international role — to seek to influence the agenda, priorities and standards of the IASB and the IPSASB by:
- participating in IASB research projects in a manner that our contribution is recognised;
- providing staff to the IASB to work on selected standard-setting project teams and from time to time engage in staff secondments to the IASB;
- simultaneously issuing (to the extent feasible) Australian versions of Exposure Drafts and Invitations to Comment containing a tentative AASB view of the proposal(s);
- responding to all significant Exposure Drafts of IASB and IPSASB in the name of the AASB or the AASB staff;
- providing technical support to Australian representatives at IASB and IPSASB meetings and project meetings;
- closely monitoring the progress of selected IASB and IPSASB projects with the objective of alerting the constituency to forthcoming significant issues and to indicate to the IASB and IPSASB information about Australian views on such issues at the earliest possible time; and
- establishing and maintaining working relationships with other standard setters in our region, and in particular New Zealand, and also establish and maintain working relationships with equivalent organisations of high standing in other parts of the world.
- Interpretations — promote globally consistent application and interpretation of accounting standards and continue to be involved in interpreting standards relating to a purely local standard or to a sector not covered by the IASB or where an international interpretation of an international standard is not forthcoming (this latter situation is expected to be rare) and including:
- on discovering unacceptable diversity of accounting treatments arising from differences in interpretation, in the first instance, attempt to have the matter resolved at an international level; and
- making arrangements to have all international Implementation Guidance and Bases for Conclusions relating to international accounting standards freely available on its website to its Australian constituents.
- Communications — to improve communication with constituents and the use of constituent input by:
- developing communications processes and policies to facilitate effective and timely engagement with stakeholders, stakeholder groups and with bodies we are seeking to influence; and
- establishing a communication function and developing a broad communications strategy.
- Transaction neutrality — to continue promulgating standards that deal with like transactions and events in a like manner by using IFRS as the core direction for accounting treatments, but recognising that the IASB has written IFRS specifically for the for-profit sector. In view of the different business models in the other sectors, the AASB will amend the IFRS, where necessary in order that they are also appropriate for use in the not-for-profit private and not-for-profit public sectors.
Generally speaking, the above means that 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.
The AASB work programme approved by the FRC includes:
1 IASB-related projects involving significant AASB input
Project |
IASB status |
Proposed actions |
Extractive Activities |
Research project |
AASB leading a team (Canada, Norway and South Africa) to develop draft recommendations for consideration by the IASB. |
Intangible Assets |
Research project |
AASB developing papers for consideration by the IASB. Includes implementation review of IFRS 3/AASB 3. |
Insurance Contracts Phase 2 |
Active project |
AASB contributing through Project Team membership. |
Revenue Recognition |
Convergence1 project |
AASB contributing through Project Team membership. |
2 IASB-related projects involving monitoring by the AASB
(in conjunction with New Zealand FRSB)
Project |
IASB status |
Proposed actions |
Board with prime responsibility |
Non-financial Liabilities (Provisions) |
Active project |
Monitor closely. |
AASB |
Puttable Instruments |
Active project |
FRSB leading project and AASB monitoring closely. |
FRSB |
Borrowing Costs |
Convergence project |
ED 149 on issue for comment in Australia. Monitor closely. |
AASB |
Financial Statement Presentation Phase 1 |
Convergence project |
ED 148 on issue for comment in Australia. Monitor closely. |
AASB |
Joint Ventures |
Convergence project |
Monitor passively. |
AASB |
Segment Reporting |
Convergence project |
ED 145 on issue in Australia. Monitor closely. |
AASB |
Impairment |
Convergence project |
Monitor passively. |
AASB |
Income Tax |
Convergence project |
Monitor passively. |
AASB/FRSB |
Earnings per Share |
Convergence project |
Monitor passively. |
AASB |
Business Combinations Phase 2 |
Convergence project |
Monitor closely. |
FRSB |
Fair Value Measurement Guidance |
Convergence project |
Monitor closely. |
AASB |
Small and Medium Sized Entities |
Active project |
Monitor closely. |
AASB/FRSB |
Consolidation (including Special Purpose Entities) |
Active project |
Monitor passively. |
FRSB |
Conceptual Framework |
Active project |
Monitor closely2. |
AASB/FRSB |
Post-employment Benefits |
Research project |
Monitor passively. |
AASB |
Measurement |
Research project |
Monitor passively. |
AASB |
Leases |
Research project |
Monitor passively. |
FRSB |
Financial Instruments |
Research project |
Monitor passively. |
AASB |
Financial Statement Presentation Phase 2 |
Research project |
Monitor closely. Australia represented on IASB Working Group. |
AASB |
Management Commentary |
Research project |
Monitor passively. |
FRSB |
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.
3 IPSASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
Project |
IPSASB status |
Proposed actions |
Board with prime responsibility |
Non-exchange Revenues |
Active project |
ED 147 incorporating the IPSASB ED issued for comment in Australia – monitor project closely. Australia is represented on IPSASB Steering Committee. |
AASB |
Social Policy Obligations |
Active project |
Monitor closely. Australia is represented on IPSASB Steering Committee. |
FRSB |
GAAP/GFS convergence |
Active project |
Monitor closely. This project may affect the AASB’s domestic work on GAAP/GFS convergence. Australia is represented on IPSASB Technical Working Group. |
AASB |
Heritage Assets |
Active project |
Monitor closely. AASB commenting on Discussion paper in cooperation with FRSB. |
FRSB |
Budget Reporting |
Active project |
Monitor closely. |
AASB |
Amending IPSASs for IASB Improvements |
Active project |
Monitor passively. |
AASB/FRSB |
Conceptual Framework |
Research project |
Monitor closely. |
AASB/FRSB |
Service Concessions |
Research project |
Monitor closely. |
AASB |
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 or the AASB staff) 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.
4 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 cooperation on regulatory matters.
The AASB and the FRSB have also agreed to share resources to the extent feasible and in most cases have allocated one or other of the Boards to be the prime Board responsible for monitoring the work of the IASB and the IPSASB.
5 Domestic GAAP/GFS Convergence Project
Project |
Status |
Proposed actions |
General Government Sector reporting [Part 1 of Phase 1] |
ED 142 |
Consider draft ED and issue Standard. |
Whole of Government Sector reporting [Part 2 of Phase 1] |
— |
Consider flow on from GGS work. See also the work on Whole of Government (withdrawal project). |
PNFC and PFC Sectors [Part 3 of Phase 1] |
— |
Consider flow on from GGS work. |
Entities within the GGS (including government departments) [Phase 2] |
— |
Consider flow on from GGS work. See also the work on Government Department Review (withdrawal project). |
Other public sector entities (including local governments, universities and GBEs) [Phase 3] |
— |
Consider flow on from above projects. See also the work on Local Government Review (withdrawal project). |
6 Other Domestic Projects
Project |
Status |
Proposed actions |
Superannuation Plans |
AAS 25 (1993) |
Develop an ED and revise AAS 25 to take account of the current environment in which plans operate. Have regard to IAS 26 and other IFRS. |
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. ED to make use of New Zealand guidance on Public Benefit Entities. |
Review of Local Government, Government Departments and Whole of Government |
AAS 27, AAS 29 and AAS 31 |
Issue ED proposing withdrawal of AAS 27, AAS 29 and AAS 31 and re-locating existing requirements/guidance in topic based Standards. Consider implications of GAAP/GFS convergence. Likely longer term spin-off projects include Control in the Public Sector, Administered Items, and aspects of the Reporting Entity/GPFR/SPFR project. |
Review of Reporting Entity and GPFR/SPFR distinction |
SAC 1 and SAC 2 |
Consider SAC 1 and SAC 2 definitions and guidance on reporting entities and on General Purpose Financial Reports versus Special Purpose Financial Reports in light of current developments, including GAAP/GFS convergence, the IASB’s SMEs project, and the review of the need for parent entity reports. |
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. |
Segment Reporting in the Public Sector |
Currently scoped out of AASB 114 |
Examine the specific issues associated with the public sector in light of existing practice in the Australian public sector and the IPSASB Standard on segment reporting and undertake the normal due process. |
Administered Items |
AAS 29 |
Consider the definition and presentation of administered items. |
KMP disclosures – AASB 124 and section 300A convergence |
AASB 124 Section 300A |
In conjunction with Treasury staff, examine avenues for rationalising the disclosure requirements for compensation and other related disclosures currently set out in AASB 124 and section 300A of the Corporations Act 2001. |
7 AASB/IFRIC Interpretations
Project |
Status |
Proposed actions |
Service Concessions |
IFRIC Draft Interpretations |
Closely monitor the project. |
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 revised interpretations process. |
IFRIC projects will be monitored as closely as possible by AASB staff, who will report issues of concern to the AASB’s Interpretations Agenda Committee and provide briefings to the Australian and New Zealand members of the IFRIC prior to IFRIC meetings.
1 ‘Convergence’ denotes a project aimed at achieving greater convergence between the IASB and the FASB.
2 The IASB and the FASB are jointly progressing a project on the Conceptual Framework that focuses on for-profit entities. The AASB is monitoring this project closely in conjunction with the FRSB, the United Kingdom Accounting Standards Board, the Canadian Accounting Standards Board and the International Public Sector Accounting Standards Board with a view to providing input to the IASB that might make its Framework more widely relevant and in the interests of identifying areas in which modifications may need to be made to suit not-for-profit entities.