Australia proposes to undo changes it made to IFRSs

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02 Dec 2006

On 30 November 2006, the Australian Accounting Standards Board (AASB) issued Exposure Draft ED 151 Australian Additions to, and Deletions from, IFRSs for comment.

ED 151 can be downloaded from the AASB Website (PDF 100kb). ED 151 reflects the AASB's recent decision to make Australian accounting requirements the same as IFRSs in respect of for-profit entities. To this end, the exposure draft proposes reinstating various accounting policy options that were previously deleted in making the existing suite of A-IFRS, and removing certain Australian-specific disclosures.

Options in accounting and disclosure

ED 151 proposes to allow entities the option to:

  • prepare cash flow statements using the 'indirect' method. Whichever method adopted, the reconciliation between profit and operating cash flows will no longer be required
  • use proportionate consolidation to account for their jointly controlled entities
  • account for government grants as deferred income or as a deduction from the related asset. The choice affects the timing of recognition of the grant as income
  • account for government grants in the form of a transfer of a non-monetary asset for use by the recipient at fair value or nominal amount
  • disclose government grants related to income as a credit in profit and loss or as a deduction from the related expense
  • disclose a reconciliation between the average effective tax rate and the applicable tax rate instead of a reconciliation between tax expense and accounting profit multiplied by the tax rate. Also, the ED proposes eliminating the additional disclosures related to the treatment of exchange differences on deferred taxes

 Reducing the magnitude of additional disclosures

ED 151 also proposes that entities no longer be required to make Australian specific disclosures relating to:

  • defined benefit plans, including the surplus or deficit determined under AAS 25 Accounting for Superannuation Plans and details about funding
  • associates and joint ventures
  • earnings per share calculations, including disclosure of an additional EPS number where there has been a major capital restructuring.
  • the reason and justification for not using the Australian currency as the presentation currency
  • the financial effect of a change in accounting policy made in the second half of the financial year on the previously reported half-year results/position
  • interim financial reporting – including the financial effect of subsequent events, details about dividends proposed or declared, and labelling of the interim financial report
  • for biological assets, their nature, estimate of physical quantity and details of restrictions on their use or sale
  • disclosure of credit standby arrangements and a summary of used and unused loan facilities as required by AASB 132 Financial Instruments: Disclosure and Presentation
  • for financial institutions, disclosures including interest analysis, contractual maturities, impairment losses and fiduciary duties.
Click for Deloitte Accounting Alert (PDF 41k).


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