News

24
JUNE
2021
AASB

AASB Action Alert No. 208

The Action Alert for the 181 st AASB board meeting is now available The AASB Board met in public via videoconference on 21 – 22 June 2021   At the meeting the Board made key decisions in relation to

  • Not-for-Profit Private Sector Financial Reporting Framework
  • ...
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24
JUNE
2021
AASB

Transition amendments to AASB 1059 Service Concession Arrangements: Grantors

The AASB issued AASB 2021-4 to amend the modified retrospective transition method for service concession grantors measuring the Grant of a Right to the Operator (GORTO) liability when implementing AASB 1059

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17
JUNE
2021
AASB

Congratulations to (Howard) Mike Blake

The Board and staff of the AASB would like to congratulate Mike a former AASB Board Member on being awarded an AM in the recent Queen’s Birthday honours

This was to acknowledge his significant service to accounting and to...

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Forthcoming virtual outreach event to discuss ITC 45: the IPSASB’s proposed ‘current operational value' measurement basis for non-cash generating assets in the public sector

17
2021
17 June 2021

AASB staff invite not-for-profit public sector stakeholders to participate in a virtual outreach event to discuss ITC 45 on Tuesday 6 July 2021 at 2–4pm AEST

ITC 45 requests comments on two related IPSASB Exposure Drafts on measurement of assets and liabilities in the public sector

• ED 76 Conceptual Framework Update Chapter 7 Measurement of Assets and Liabilities in Financial Statements; and
• ED 77 Measurement (a proposed new IPSASB Standard)

Comments on ITC 45 are due to the AASB by 3 August 2021 Comments on ED 76 and ED 77 are due to the IPSASB by 25 October 2021

AASB staff will provide an overview of one of the key proposals in the EDs – the proposed new ‘current operational value’ measurement basis for measuring the current value of non-financial assets of not-for-profit public sector entities held primarily for their service potential rather than their ability to generate net cash inflows (i e ‘operational assets’) including comparison with fair value...

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AASB Exposure Draft ED 311 Management Commentary

17
2021
17 June 2021

ED 311 proposes a comprehensive framework that entities could apply when preparing management commentary that complements their financial statements The proposals represent a major overhaul of IFRS Practice Statement 1 Management Commentary

The proposed framework builds on innovations in narrative reporting to enable entities to bring together in one place the information investors (and other users) need to assess an entity’s long-term prospects The framework sets out disclosure objectives for information about the entity’s business model strategy resources and relationships risks external environment and financial performance and position

ASIC’s Regulatory Guide RG 247 Effective disclosure in an operating and financial review provides guidance to directors of listed entities on providing useful and meaningful information to shareholders or unitholders when preparing an operating and financial review (OFR) in a directors’ report RG 247

The AASB Staff Paper Comparison of Narrative Reporting Requirements Applicable to noted that a

The AASB will work with ASIC to...

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Audit and Risk Committee vacancy

16
2021
16 June 2021

Audit and Risk Committee Vacancy

  • High-profile Non-Corporate Commonwealth Entity
  • Key governance opportunity at Group-level
  • Renumerated role on Audit Finance and Risk Committee

A vacancy has arisen for the on the Audit Finance and Risk Committee for the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB)  

The AASB & AUASB are seeking an outstanding person who can provide sound judgement and stewardship of the Committee demonstrate extensive financial expertise industry leadership and will have community standing as an experienced governance officer

About the AASB & AUASB

The AASB and the AUASB are Australian Government agencies under the  Australian Securities and Investments Commission Act 2001

The outcome of the AASB is developing issuing and maintaining principles-based Australian accounting and external reporting standards and guidance that meet user needs and enhance external reporting consistency and quality

The AUASB outcome is developing issuing and maintaining in...

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Agenda and papers for AASB Meeting 181 - June 2021 now available

08
2021
08 June 2021

The Agenda and Papers for the AASB Meeting 181 to be held on 21-22 June 2021 are now available

This meeting will be held by videoconference Members of the public wishing to attend the public sessions must register their interest by emailing standard@aasb gov au detailing

• Name
• Entity
• Email address and
• Details of sessions they wish to join

By cob 17th June Only attendees that have pre-registered will be provided with registration details to join the Zoom videoconference

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AASB Staff Paper: Comparison of Narrative Reporting Requirements Applicable to For-Profit Entities

26
2021
26 May 2021

The staff paper  Comparison of Narrative Reporting Requirements Applicable to For-Profit Entities examines several aspects of narrative reporting requirements for for-profit entities in Australia and selected overseas jurisdictions through their comparison to the draft disclosure objectives expected to be included in the forthcoming IASB’s Exposure Draft on revised IFRS Practice Statement 1 Management Commentary (MCPS) to provide early input into the AASB’s consultation on the IASB’s proposals

The staff paper identified possible sources of the best practice in relation to the narrative reporting requirements for for-profit entities and outlined several areas that could be considered

...
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AASB–AUASB webinar – For-profit entities: The removal of special purpose financial statements and the introduction of simplified disclosures (Part 3)

25
2021
25 May 2021

On 25 May 2021 AASB and AUASB staff co-presented the third webinar in a series on the removal of special purpose financial statements and the introduction of simplified disclosures

This webinar outlined the audit implications for
• entities transitioning from special purpose financial statements; and
• entities transitioning from Tier 2 – Reduced Disclosure Requirements

The slide pack can be found here A recording of the webinar is also available on our YouTube channel for those of you who missed it Watch it here

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AASB Exposure Draft 310 Lack of Exchangeability

13
2021
13 May 2021

The AASB is proposing to amend AAS 121 The Effects of Changes in Foreign Exchange Rates to help companies determine whether a currency can be exchanged into another currency and what accounting requirements to apply if the currency cannot be exchanged

The amendments would specify

(a) when a currency is exchangeable into another currency and consequently when it is not;
(b) how an entity determines the exchange rate to apply when a currency is not exchangeable; and
(c) the information an entity provides when a currency is not exchangeable

Please submit your comments to the AASB by 23 July 2021 via the AASB website LinkedIn or email at standard@aasb gov au

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AASB webinar - For-profit entities: The removal of special purpose financial statements and the introduction of simplified disclosures (Part 2)

11
2021
11 May 2021

On 10 May 2021 AASB staff hosted the second webinar in a series on the removal of special purpose financial statements and the introduction of simplified disclosures

This webinar explained the transition relief and options available for entities that will be required to transition to AASB 1060   For example

• how an entity currently preparing Tier 2 – RDR financial statements will transition; and
• how an entity currently preparing SPFS will transition including how the transition is affected by the entity’s compliance or otherwise with the recognition measurement consolidation and equity accounting requirements in Australian Accounting

...
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AASB Invitation to Comment ITC 45: IPSASB Exposure Drafts on public sector measurement

11
2021
11 May 2021

AASB ITC 45  invites comments on the IPSASB Exposure Drafts ED 76 and ED 77 on public sector measurement by 3 August 2021

ED 76 and ED 77

ED 76 Conceptual Framework Update Chapter 7 Measurement of Assets and Liabilities in Financial Statements proposes to revise the measurement bases in the IPSASB’s Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities Amongst other proposals ED 76 introduces two new bases for measuring an asset’s current value (fair value and current operational value) as well as removing some measurement bases

ED 77 Measurement which is a proposed new Standard proposes definitions and initial and subsequent measurement requirements for a number of measurement bases including fair value and current operational value

Fair value vs current operational value

ED 76 and ED 77 propose that the fair value measurement basis (the same as in AASB 13/IFRS 13 Fair Value Measurement ) would be inappropriate for measuring

In contrast most stakeholders who responded to AASB outreach about AASB 13/IFRS 13 noted their view that fair value

...
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Post-Implementation Review of AAS 1049 Whole of Government and General Government Financial Reporting

04
2021
04 May 2021

Dr Kim Langfield-Smith has been engaged by the FRC to undertake an independent Post-Implementation Review of AASB 1049

The purpose of this review is to evaluate the extent to which AASB 1049 and the budgetary disclosure requirements in AASB 1055 Budgetary Reporting have been successful in harmonising GFS and GAAP reporting whether the benefits outweigh the costs and whether any improvements to one or both Standards are needed to assist the Standards to meet their objectives

A Consultation Paper has been prepared with questions for comment aimed specifically at users of government financial statements and at preparers of government financial statements

If you would like to contribute to this review please contact Dr Kim Langfield-Smith directly by email...

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AASB Research Report 16 Financial Reporting by Non-Corporate or Small Entities

29
2021
29 April 2021

Research Report 16  presents an overview of the academic literature on financial reporting by non-corporate and small entities The Report’s overall objective is to answer key questions about the coverage of non-corporate and small entities’ reports their user and stakeholder needs and their compliance and regulatory oversight

Key findings from the literature review includes

With regard to which entities should report and in how much detail

There is some consensus in the academic literature about the  

  • mismatch between the needs of users and the information that is reported (often for compliance purposes) by
...
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AASB webinar - For-profit entities: The removal of special purpose financial statements and the introduction of simplified disclosures (Part 1)

28
2021
28 April 2021

On 27 April 2021 AASB staff hosted the first webinar in a series on the removal of special purpose financial statements and the introduction of simplified disclosures

The webinar covered
• which for-profit private sector entities are affected;
• what they need to know about preparing their first set of simplified disclosures financial statements; and
• for those entities that are not in-scope and can continue to prepare SPFS what this means for them

The slide pack can be found on the website here  A recording of the webinar is also available on our YouTube channel for those of you who missed it Watch it here

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AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions beyond 30 June 2021

28
2021
28 April 2021

AASB 2021-3 extends by one year the application period of the practical expedient in AASB 16 Leases to help lessees accounting for covid-19-related rent concessions

The practical expedient permits lessees not to assess whether rent concessions that occur as a direct consequence of the covid-19 pandemic and meet specified conditions are lease modifications and instead to account for those rent concessions as if they were not lease modifications  
 
AASB 2021-3 extends the practical expedient originally provided by AASB 2020-4 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions to rent concessions that reduce only lease payments

...
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AASB Action Alert No. 207

22
2021
22 April 2021

The  Action Alert  for the 180th AASB Board meeting is now available   The AASB Board met in public via videoconference on 20-21 April 2021 and made key decisions in relation to

  • Not-for-Profit Private Sector Financial Reporting Framework
  • Not-for-Profit Entity Definition and Guidance
  • Service Concession Arrangements Grantors – Initial Application
  • Insurance Activities in the Public Sector
  • AASB Agenda Consultation
  • Post-implementation Review of IFRS 10 11 and 12
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AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates

19
2021
19 April 2021

AASB 2021-2 amends AASB Standards to improve accounting policy disclosures and clarify the distinction between accounting policies and accounting estimates

Specifically AASB 2021-2 amends

•  AASB 7 to clarify that information about measurement bases for financial instruments is expected to be material to an entity’s financial statements;

•  AASB 101 to require entities to disclose their material accounting policy information rather than their significant accounting policies;

•  AASB 108 to clarify how entities should distinguish changes in accounting policies and changes in accounting estimates;

•  AASB 134 to identify material accounting policy information as a component

...
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AASB 2021-1 Transition to Tier 2: Simplified Disclosures for Not-for-Profit Entities

15
2021
15 April 2021

AASB 2021-1 provides limited optional comparative information relief for not-for-profit entities adopting AASB 1060  early by transitioning from either Tier 1 or Tier 2 – Reduced Disclosure Requirements to Tier 2 – Simplified Disclosures

The optional relief is available for not-for-profit entities that adopt AASB 1060 early that is for reporting periods beginning before 1 July 2021   It provides optional relief from having to present comparative information in the notes to the financial statements where the entity did not disclose the comparable information in its most recent previous Tier 1 or Tier 2 general purpose

...
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AASB Roundtable on ITC 42 Business Combinations under Common Control

15
2021
15 April 2021

AASB staff will hold a roundtable to discuss ITC 42 Business Combinations under Common Control on 5 May 2021 (Wednesday) from 4 00 pm – 5 30 pm AEST

Following on from the IASB and AASB Business Combinations under Common Control webinar in March the objective of this roundtable is to obtain views from Australian constituents (for-profit or not-for-profit users preparers academics and relevant stakeholders) based on the questions in the IASB’s Business Combinations under Common Control Discussion Paper You will provide feedback directly to AASB staff IASB Board member Ann Tarca and IASB technical staff at our virtual roundtable

To ensure you receive pre-roundtable discussion material please register here by COB 30 April 2021

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AASB Invitation to Comment ITC 44 Request for Comment on the IASB Request for Information on Third Agenda Consultation

15
2021
15 April 2021

Your feedback is requested to inform the IASB’s Request for Information on the Third Agenda Consultation

The International Accounting Standards Board (IASB) undertakes a public consultation on its activities and its work plan every five years (agenda consultation) The objective of this agenda consultation is to gather views on

• the strategic direction and balance of the IASB’s activities;
• the criteria for assessing the priority of financial reporting issues that could be added to the work plan; and
• new financial reporting issues that could be given priority in the IASB’s work plan

Responses to this Request for Information will help shape the IASB’s thinking when determining how to prioritise its activities and new projects in its work plan for 2022 to 2026

As part of the AASB’s due process a formal agenda consultation process is held with stakeholders at least once every five years to identify issues that need resolution

The AASB will also conduct a domestic Agenda Consultation process during 2021/22 A separate Invitation to Comment will be issued in

...
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Exposure Draft: Disclosure Requirements in Australian Accounting Standards—A Pilot Approach

08
2021
08 April 2021

ED 309   Disclosure Requirements in Australian Accounting Standards—A Pilot Approach  proposes a new approach to developing disclosure requirements in Australian Accounting Standards (AAS) and new disclosure requirements for AAS on fair value measurement and employee benefits These proposals would enable entities to enhance their judgement and reduce ‘boilerplate’ information

The new approach is written as draft guidance when developing disclosure requirements in individual Standards with an aim to

  • enhance investor engagement to ensure the AASB has an in-depth understanding of investors’ information needs and clearly explains those needs in AAS;
  • give greater prominence to the objective of disclosure requirements requiring entities to

Please submit your comments to the AASB by 16 August 2021 via the AASB website LinkedIn or email

...
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Forthcoming webinars – the removal of SPFS and the introduction of simplified disclosures

08
2021
08 April 2021

AASB staff will host a series of webinars on the removal of SPFS and the introduction of simplified disclosures

The first webinar in the series is scheduled on Tuesday 27 April 2021 from 12 00pm to 1 00pm (AEST)   This webinar will cover

  • which for-profit private sector entities are affected 
  • what they need to know about preparing their first set of simplified disclosures financial statements; and
  • for those entities that are not in-scope and can continue to prepare SPFS what this means for them

Please register for the Part 1 webinar via this link

The second webinar in the series is scheduled on Monday 10 May 2021 from 12 00pm to 1 00pm (AEST)   This webinar will explain what the removal of SPFS means for those entities that are in-scope   For example

  • how will an entity’s transition from SPFS
...
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David Boymal inducted into the Australian Accounting Hall of Fame

05
2021
05 March 2021

The Office of the Australian Accounting Standards Board would like to extend its congratulations to David Boymal who has been included in the group of 2021 inductees into the Australian Accounting Hall of Fame

The citation supporting David's induction into the Hall of Fame noted contributions to accounting through standard setting service to the profession and wider business community is extensive From his appointment to the Australian Accounting Research Foundation's Accounting Standards Board in January 1982 to his retirement as chair of the Australian Accounting Standards Board (AASB) in November 2008 David was involved in

...
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Proposals to Extend the Practical Relief for Lessees for Covid-19-Related Rent Concessions – AASB Exposure Draft ED 308

12
2021
12 February 2021

ED 308   Covid-19-Related Rent Concessions beyond 30 June 2021  proposes to extend by one year the practical expedient added to AASB 16 Leases in 2020 to help lessees in accounting for covid-19-related rent concessions

The original amendment was issued in June 2020 to make it easier for lessees to account for Covid-19-related rent concessions such as rent holidays and temporary rent reductions while continuing to provide useful information about their leases to investors The amendment permitted lessees as a practical expedient not to assess whether particular rent concessions provided as a consequence of the covid-19 pandemic are lease modifications The practical relief currently applies to rent concessions that reduce lease payments due on or before 30 June 2021

...
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Exposure Draft ED 307: Regulatory Assets and Regulatory Liabilities

04
2021
04 February 2021

ED 307 proposes a new accounting model that would require companies subject to rate regulation to give investors better information about their financial performance

The proposed model would require an entity to
• recognise regulatory assets and regulatory liabilities in its statement of financial position;
• recognise regulatory income and regulatory expense in its statement of financial performance; and
• measure regulatory assets and regulatory liabilities on a modified historical cost basis reflecting updated estimates of future cash flows that will arise from those assets and liabilities

If finalised the proposals would replace AASB 14 Regulatory Deferral Accounts an interim Standard that permits a variety of accounting approaches for the effects of rate regulation to continue temporarily – but only where they were applied in accordance with generally accepted accounting principles prior to adopting Australian Accounting Standards

Please submit your comments to the AASB by 10 May 2021 via the AASB website LinkedIn or email at standard@aasb gov au

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IPSASB ED 75 Leases and Request for Information

19
2021
19 January 2021

The IPSASB has issued ED 75 Leases and a related Request for Information on concessionary leases Comments are due to the IPSASB by 17 May 2021

IPSASB ED 75 and the Request for Information Concessionary Leases and Other Arrangements Similar to Leases  can be accessed through a link page  on the AASB website

IPSASB ED 75 proposes lease accounting that would align with IFRS 16 Leases ED 75 supersedes the previous IPSASB proposals in ED 64

The objective of the Request for Information is for the IPSASB to gather stakeholders’ input on the characteristics of concessionary leases and other arrangements similar to leases that are common in the public sector The IPSASB is seeking information on the existence of such arrangements and how they are reflected in financial statements This information would assist the IPSASB in determining whether

...
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