IFRS adoption in Australia was relatively smooth

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28 Mar 2017

The Australian Accounting Standards Board (AASB) has published its Research Report No. 4 'Review of Adoption of International Financial Standards in Australia' that finds that Australia’s adoption of IFRSs has been relatively smooth for most Australian business entities. However, it also states that extra support is warranted for not-for-profit entities.

Australia adopted IFRSs effective 1 January 2005, and in 2015 the AASB commenced a review of the adoption to assess the ongoing relevance of IFRSs to Australian for-profit and not-for-profit (NFP) reporting entities.

The key messages identified as part of the review are:

  • The transition process has been reasonably smooth for most sectors.
  • IFRSs are an appropriate basis for NFP standards developed by the AASB, however, further modifications are needed to as regards the quality and the cost-efficiency of reporting.
  • Adopting IFRSs across all sectors has enabled users and preparers to move between sectors, and between countries, with transferable knowledge and skills.
  • Internationally active entities have experienced cost savings in preparing financial reports.
  • Small and medium-sized entities and NFP entities have concerns regarding the costs of fully complying with the new standards, especially as regards disclosure requirements.

The press release on the AASB website notes projects, the AASB is currently undertaking and considering to specifically meet the needs of the NFP sector. The research report is available here.

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