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From the Chairman |
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2008 will be a very active year in the setting of Australian Accounting Standards. The program of the International Accounting Standards Board is heavy and will include topics such as financial statement presentation, revenue recognition, measurement provisions and contingencies, insurance contracts and conceptual framework issues. Additionally, our local work program will include superannuation entity accounting, disclosure by charities, differential reporting, non-exchange revenue, not-for-profit entity definition and administered items.
As we move into 2008, with a new Australian Government, we also expect sustainability and emissions trading to be high on the agenda. The AASB is consulting with the Government on how to account for emissions trading and we will keep you up to date as those discussions progress.
The AASB is committed to finding out what constituents think, and factoring that thinking into its considerations and communications.
During the last year, the roundtable events we held, on insurance contracts, differential reporting and consolidation of subsidiaries by superannuation entities, proved to be most successful in eliciting a wide range of views. As such, the AASB plans to make roundtable discussions part of its ongoing consultation process on significant topics.
The first roundtable discussions in 2008 will focus on not-for-profit entity definition and guidance, and will be held in March in Melbourne, Sydney and Canberra. Watch the AASB web site for further updates on these topical events.
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Professor David Boymal
Chairman, AASB |
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1. The search for an answer to the compilation challenge
The AASB is leading the way by exploring world best practice in the customised, electronic delivery of accounting standards. The AASB is currently striving to make the list of Australian accounting standards more interactive and easier to use. We are researching electronic solutions to reduce complexity and enable users to locate and tailor the accounting standards relevant to their particular financial reporting period via the web. MORE
2. Interpretation Update
The AASB acepted an Interpretations Advisory Panel recommendation in December 2007 that AASB Interpretation 12 Service Concession Arrangements does not specify the accounting to be adopted by government grantors of service concessions, although the interpretation does need to be considered. The practical effect of this decision is that government grantors may be able to justify the retention of their existing accounting policies concerning service concessions, at least until the IPSASB work on the topic is completed.
3. Income from Government Grants and Other Non-Exchange Transactions
For some time now the Board has been discussing the issues facing not-for-profit entities in accounting for government grants, donations and similar non-exchange transactions under AASB 1004 Contributions. Under such transactions, assets are transferred to an entity without the transferor directly receiving approximately equal value in exchange. Non-exchange transactions are also called non-reciprocal transfers, which is the term used presently in AASB 1004.
The Board understands that many constituents support accounting for grants received on a time basis, i.e. only recognising a grant as income over the period to which it relates, instead of upon receipt. The Board appreciates the difficulties for not-for-profit entities in trying to explain to supporters that reporting a large surplus due to the receipt of grants shortly before the end of the financial year does not necessarily diminish the need for financial support in the year ahead.
Board members are considering various ways in which the requirements of AASB 1004 might be changed, based on different views of the liabilities that may arise when conditional grants are received by an entity. The definition of a liability included in the Board’s conceptual framework is not being changed under this project, however the Board may be able to re-interpret how the definition applies, with some types of conditional grants or other contributions that were previously initially recognised as income being initially recognised as a liability instead. In developing possible solutions, the Boards are giving careful consideration to the requirements in the International Public Sector Accounting Standards Board’s standard, IPSAS 23 Revenue from Non-Exchange Transactions (Taxes and Transfers), which was issued in December 2006.
The issues are being discussed in conjunction with the New Zealand Financial Reporting Standards Board, with the aim of reaching a common standard for accounting for income from non-exchange transactions.
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Input provided to IASB on accounting for intangible assets
Over the past three years, the AASB staff has
developed a proposal, on behalf of the IASB,
that would help address some of the perceived deficiencies in the current reporting requirements for intangible assets.
The IASB and the FASB considered the proposal in December 2007 and decided not to take the project on to their active agenda. Nevertheless, both Boards acknowledged the importance of addressing the accounting issues relating to intangible assets. The IASB decided that the research commenced by the AASB staff should continue, possibly with the support of some other National Standard Setters, until the IASB can reconsider the topic at a later time for addition to its active agenda. MORE
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Roundtables on not-for-profit definition and guidance
March 11, Melbourne
March 13, Sydney
March 17, Canberra
2008 Board Meeting dates
February 7
March 5-6
April 17
May 21-22
June 25-26
July 30-31 (Auckland)
September 24-25
November 12-13
December 17-18
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Jim Paul, AASB Senior Project Manager, presented at a government accounting seminar, convened by the Chinese Ministry of Finance and the IPSASB (Beijing, November 2007), about how public sector accounting standards are set and issues are addressed in Australia.
Professor David Boymal, AASB Chairman, addressed a Pitcher Partners conference in January on what to expect from the AASB in 2008.
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Robert Keys
Q: What led you into your chosen profession?
A: A series of random, accidental, but presumably fortunate, occurrences. Sometimes you have to do some things that you don't like doing, to help you find what you do like doing.
Q: What do you think will be the next significant issue affecting the accounting profession?
A. Ensuring that financial reporting better reflects, and thereby contributes towards, society's values, for example environmental accounting.
Q: What research projects are you working on at the moment?
A. Mainly public sector issues, such as GAAP/GFS (Government Finance Statistics) harmonisation.
Q: What book are you reading right now?
A. "A Brief History of Time" by Professor Stephen Hawking.
Q: What was the first and last music record you bought?
A. First: I think it was in 1968, MacArthur Park by Richard Harris (given the length of the
song, it seemed to be good value for money at the time).
Last: Robbie Williams, Live at Royal Albert.
Q. The best thing about the AASB is….?
A. Working in the public interest, and the people I meet and work with along the way.
Q: What did you study at university?
A. Bachelor of Commerce (Honours) and Diploma in Education, at Melbourne University.
Q. What has been your most interesting job?
A. In a previous life: Teaching year nine girls typing (on typewriters), and SELF development. In my current life: Eight months secondment to the Financial Accounting Standards Board (FASB).
Robert Keys is the deputy technical director of the AASB.
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Postal Address
PO Box 204
Collins St West
VIC 8007
Street Address
Level 7, 600 Bourke Street
Melbourne, VIC
Phone
(03) 9617 7600
1300 857 602
Fax
(03) 9617 7608
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