This edition of Transparency demonstrates the diversity and breadth of the challenges we face in improving financial reporting in Australia. Just consider the three issues listed in open for comment:

• sustainability of governments,
• differential reporting (for all sectors), and
• impairment of financial receivables.

Add to these the projects at, or close to, formal proposal stage on:

• service performance reporting,
• control in the public sector,
• service concession (grantor) reporting in the public sector,
• defining the reporting entity,
• convergence of Australian and New Zealand GAAP,
• leasing,
• superannuation,
• insurance,
• consolidations, and
• revenue recognition

Why do we have all this activity? It is not an easy question to answer, except to say that issues welling up in the Australian public sector environment, the state of development of IFRS and its convergence with US GAAP, the development of international GAAP for the public sector through the IPSASB and the GFC, are all overlays on what has been programmed for some time.

The message is simple: the period between now and 2012 will see considerable change in financial reporting requirements.

Differential Reporting – Reminder to Comment

Finally, I encourage all accountants to pay particular attention to the Differential Reporting debate. It is not just an SME issue. It is likely to significantly change the reporting of all but a minority of financial reports in this country. The exposure draft AASB 192 closes for comment on 23 April 2010. I look forward to receiving your considered comments.

Regards,

Regional Role

The recently formed Asian Oceanian Standards Setters Group (AOSSG) is likely to have a very significant influence on international developments. The group brings together the standard setters of more than 70 countries in our region (including those from China, Japan, Korea, India, Malaysia, Singapore, the Middle East, Australia and New Zealand) to harness our collective ability to provide input to the IASB. It may well be that this congress serves to correct an imbalance of influences currently at play as Europe and the US seek to shape the IASB’s views. Read more

International Public Sector Accounting Standards Board’s (IPSASB’s) Conceptual Framework

Recently, AASB Senior Project Manager, Clark Anstis and I participated in a working group meeting, aimed at providing IPSASB with input for its conceptual framework project. The meeting was devoted to the elements and measurement, which are key building blocks for that project.

It is clear that IPSASB is developing as a standard-setter and that its Framework project is a critical one for its future. The AASB is trying to ensure that the inputs to IPSASB’s work are of a high quality and is also trying to assess how Australia should manage the parallel developments of IFRS and international public sector accounting.

OECD Annual Conference

In addition to the IPSASB meeting, Clark and I attended the Annual OECD meeting reviewing progress with accrual accounting, budgeting and reporting in the public sector. Our colleagues from New Zealand, Joanna Perry and Ken Warren (also attendees at the IPSASB Framework meeting), together with Australia’s new IPSASB member, Tim Youngberry, also participated. Read more

The AASB and the New Zealand Financial Reporting Standards Board (FRSB) are developing an exposure draft on Tier 1 accounting standards for for-profit entities as part of its convergence project, which aims to eliminate modifications from the foundation IFRSs and make supplements to IFRSs identical across both jurisdictions, where feasible. Read more

The AASB has recently completed research of the "service performance” information that is either required or voluntarily being disclosed by not-for-profit entities in their annual reports.

This research was conducted because users of not-for-profit accounts, such as potential donors, want to know how an entity has performed (i.e. how their donations have been used by the charity); not just how much profit an entity makes. Read more

The AASB is currently conducting research, by talking with representatives from the Auditor General offices and Treasury departments around Australia, to discover issues experienced during the implementation of AASB 1049 Whole of Government and General Government Sector Financial Reporting. In July 2010, it is expected that a draft amendment of the findings will be presented to the Board.

The AASB continues to seek comments on exposure draft ED 189 Financial Instruments: Amortised Cost and Impairment, which proposes to clarify the amortised cost model and to rationalise and improve the approach to measuring and reporting impairments of financial assets.

The proposals would result in one impairment method, replacing the multiple methods that have applied under IAS 139.

Comments can be submitted to the AASB until 17 May 2010.

The AASB invites comment on ED 193 Conceptual Framework for Financial Reporting: The Reporting Entity (which includes IASB ED/2010/2 of the same title) by 21 June 2010. Read more

The AASB welcomes three new staff members:

Mischa Ginns joined the AASB in January 2010 as a Project Manager. Previously, she worked at BDO in Melbourne in the audit department and the Financial Reporting Unit. Read more

Emma O'Brien is participating in the AASB Graduate Program, having completed the Dean’s Honours Program at Queensland University of Technology. She graduated with a Bachelor of Business degree, with a major in Accounting (Honours), in 2009.  Read more

Lisa Panetta joins thje AASB on secondment from Moore Stephens, to work primarily on the differential reporting project. Read more

The AASB also congratulates Project Manager Natalie Batsakis on the birth of her daughter.

Until 23 April 2010
Consultation Paper Differential Financial Reporting – Reducing Disclosure Requirements

ED 192 Revised Differential Reporting Framework

Until 17 May 2010
ED 189 Financial Instruments: Amortised Cost and Impairment

The AASB congratulates Professor David Boymal, past Chairman of the AASB, on being awarded membership of the Order of Australia General Division in the Australia Day Honours List for service to accountancy, and to the development and implementation of financial reporting standards in Australia.

The AASB congratulates AASB Board member and FRSB Chairman, Joanna Perry on being awarded membership of the New Zealand Order of Merit in the New Year's Honours List for her services to accounting.

The AASB held roundtable discussions in Sydney and Melbourne this month on ED 189 Financial Instruments: Amortised Cost and Impairment.