The proposed amendment would clarify that an entity that both (a) adopts IFRSs for the first time before 1 January 2006 and (b) applies IFRS 6 before that date is exempted not only from providing comparative prior-period disclosures but also from applying the recognition and measurement requirements of IFRS 6 in the prior comparative period. The Board hopes to issue the final amendment before 30 June 2005.

To help inform users of financial statements about the change to IFRSs, AASB 1047 requires disclosure of:

• any known or reliably estimable information about the quantified impacts on the financial report had it been prepared using IFRSs; or
• if such impacts are not known or reliably estimable, a statement to that effect. In this case AASB 1047, suggests that entities should also update their disclosures made in 2004 about the management of the transition to IFRSs and the explanation of the key differences in accounting policies expected to arise.

To the extent that an entity knows or is able to reliably estimate the quantitative impact of some, but not all of the key accounting policy changes, ASIC believes that disclosure should comprise the quantified impacts of those accounting policy changes that can be reliably estimated and a narrative explanation of any unquantifiable items. Click to download (PDF 37k).

 

While FEE supports the Commission's overall objectives, the briefing note expresses some concerns:

• The location of the corporate governance statement and related audit implications cause 'serious problems' that may inhibit development of disclosure.
• The need to clarify the types of 'arrangements' that must be disclosed (including beneficial interests, special purpose entities, and off-balance-sheet arrangements).
• Disclosure requirements for related party transactions should not go beyond IAS 24. In addition, we wish to share some observations on the internal control disclosure requirement proposed.
• At this stage, FEE believes that disclosures about risk management and internal control should be limited to a description of the main features of a company's internal controls over financial reporting.