Issue No 38/2006 - ANT38  
6 October 2006 

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• Latest news and issues 
  
• Tools and technical updates (Financial Reporting and Auditing can be found at the Short Cuts/Technical Tag on the Home Page)

 

• A draft submission to the IASB on the Discussion Paper 'Preliminary Review of an Improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics of Decision-useful Financial Reporting Information' was discussed, and will be reconsidered at the AASB's November meeting. 
  
• A draft submission to the FRC on 'The Use of a Sector Neutral Framework for Making of Australian Accounting Standards' was discussed, with a final submission to be lodged with the FRC after a final review by the AASB subcommittee. 
  
• A revised AASB 101 'Presentation of Financial Statements' was approved by the AASB. The revised AASB 101 applies to annual reporting periods beginning on after 1 January 2007. AASB 101 reflects the proposed Australian amendments in ED 148 'Presentation of Financial Statements: A Revised Presentation'. It does not reflect the proposed IASB amendments, as these have yet to be considered by the IASB. 
  
• An issues paper on the 'Measurement of Assets' was considered as part of the comprehensive review of AAS 25 'Financial Reporting by Superannuation Plans'. 
  
• The AASB agreed on a submission to IFRIC on D19 'IAS 19 - The Asset Ceiling: Availability of Economic Benefits and Minimum Funding Requirements'. 
  
• A Draft Interpretation D20 'Customer Loyalty Programmes' was approved for release in the Australian context with submissions from constituents to be discussed at the November meeting. 
  
• A staff paper on 'Differential Reporting in Australia and the Reporting Entity Concept' was discussed. The AASB directed staff to prepare a more detailed paper identifying various differential reporting options in the context of the forthcoming release of the IASB SME ED. The revised paper will also look at the options for the scope clauses of AASB standards.  
  
• The AASB approved an Exposure Draft 'Australian Additions to and Deletions from IFRSs'. 
  
• The AASB met with public sector constituents to discuss key decisions regarding the 'Review of the AASs 27, 29 and 31'. As a result, the AASB will consider a proposed ED at its November meeting. 
  
• The AASB approved AASB 2006-X 'Amendments to Australian Accounting Standards' (AASB 1045) that extends the expiry date of the land under roads transitional provisions in AASB 1045 from '31 December 2006' to '31 December 2007'. 
  
• The AASB discussed the general direction of a submission to the IASB on proposed amendments to 'IAS 132 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements: Financial Instruments Puttable at Fair Value and Obligations Arising on Liquidation'.

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  The structure for AUASB pronouncements and drafting rules for guidance statements 
  
• The Framework for Assurance Engagements (revised AUS 108) 
  
• Review of AGS 1050: Audit Issues Relating to the Electronic Presentation of Financial Reports 
  
• The Standard on Review Engagements - draft ED of ASRE 2400: Engagements to Review Financial Statements 
  
• Other auditing and assurance projects -
   
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  • Addendum to AGS 1064: Audit of Prudential Requirements of General Insurers 
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  • Status report on the internal controls project 
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  • Service Organisations 
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  • The performance auditing project
   
  
• Monitoring ASAs 
  
• Withdrawal of outdated pronouncements 
  
• Emerging issues

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  Insurance 
  
• Business Combinations II 
  
• Accounting for SMEs (focused on simplification of financial instruments and income taxes and employee benefits) 
  
• IAS 37 redeliberations (focused on measurement issues) 
  
• The Conceptual Framework (tentatively decided that the Board should describe what constitutes a reporting entity, but not define it, leaving local regulators to decide exactly who should prepare general purpose financial reports) 
  
• SIC 12: Consolidation - Special Purpose Entities (an education session) 
  
• Revenue recognition (focused on how to measure a performance obligation such as a two-year product warranty) 
  
• Short-term convergence: segment reporting 
  
• Financial Instruments - IASB and FASB to publish a due process document by January 2008 and IASB gave input to IFRIC discussions on derecognition 
  
• Financial Statement Presentation - IASB made tentative decisions on a working format for the financial statements 
  
• IFRIC activities - six tentative decisions not to take items to their agenda are open for comment until 20 October 2006. See http://www.iasb.org/uploaded_files/documents/8_136_IFRIC0609.pdf under "Tentative Agenda Decisions" 
  
• IAS 24 - tentative decision that when an entity qualifies as a related party of another entity simply because of the existence of common control from the State, IAS 24 should provide some relief from disclosure 
  
• Fair Value Measurement - SFAS 157 "Fair Value Measurements" to be issued as a discussion paper and invitation to comment by the IASB 
  
• IFRS 1 Amendments - issues relating to difficulties in restating the cost of an investment in a subsidiary in the separate financial statements of a parent on first time adoption of IFRS

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  IFRS 2 Share-based Payment - Employee benefit trusts in the separate financial statements of the sponsor 
  
• IFRS 7 Financial Instruments: Disclosures - Presentation of 'net finance costs' on the face of the income statement 
  
• IAS 11 Construction Contracts - Allocation of profit in a single contract 
  
• IAS 38 Intangible Assets - Classification and accounting for SIM cards 
  
• IAS 38 Intangible Assets - Adoption of IAS 38 (revised 2004) 
  
• IAS 39 Financial Instruments: Recognition and Measurement - Testing of hedge effectiveness on a cumulative basis

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  our regular update of changes in the financial reporting sphere "the Panel". 
  
• a discussion of the appropriateness of sector neutral standards by Stephanie Kemp in response to the debate currently occurring within the accounting community on this issue  
  
• Keith Reilly discusses the importance of Australia effectively contributing to the international debate on the development of accounting standards in light of international harmonisation and highlights the Institute's new strategies for encouraging submissions.  
  
• Nick Ridehalgh of PWC discusses the challenges of communicating AIFRS changes to investors and provides some practical assistance and  
  
• Paul Reid and Graeme Nanson of KPMG discuss how well our auditing standards deal with the effects that the growing use of outsourcing providers has on a company's internal controls.

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  * A paragraph by paragraph analysis of AASs 27, 29 and 31, as part of the Board's review of these standards 
  
• Draft IFRIC Interpretations  
  
• IFRIC Draft Interpretation D19 "IAS 19 - The Asset Ceiling: Availability of Economic Benefits and Minimum Funding Requirements"  
  
• IFRIC Draft Interpretation D20 "Customer Loyalty Programmes"