In balance – April 2014

Australian reporting matters

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Welcome to In balance, our monthly update on financial reporting developments. In balance has been designed to help keep busy professionals one step ahead by providing easy access to the information you need, all in one place.

For those companies considering whether the new hedge accounting requirements is a benefit, our latest edition of Applying IFRS will be useful. In this edition we explore the new hedging requirements in detail, focusing on the new transactions eligible for hedging and provide illustrative examples.

Finally, our latest edition of Endeavour supplement and our suite of IFRS Core Tools have been updated and are now available. These tools provide a number of building blocks to help you keep up with the changing landscape of IFRS, applicable for June 2014 reporting.  



Hot topics

  • Applying IFRS: Hedge accounting under IFRS 9
    This issue of Applying IFRS explores the new hedge accounting model in IFRS 9 Financial Instruments. The new model aims to provide a better link between an entity's management strategy, the rational for hedging and the impact of hedging on financial statements. We consider some of the potential benefits for reporting entities and we also explore some of the challenges it poses.
  • Endeavour supplement for the standards issued not yet effective as at 31 March 2014
    This document is a supplement to Endeavour (International) Limited (December 2013 edition) and contains illustrative disclosure on changes in Accounting Standards and Interpretations and Accounting Standards. This publication also lists Interpretations issued but not yet effective and all applicable Accounting Standards and Interpretations issued as of 31 March 2014.
  • IFRS Core tools
    Our latest suite of IFRS Core Tools consists of a number of practical building blocks that can help you to keep up with the changing landscape of IFRS:
    • IFRS Update: This publication is updated twice each year (as of 31 March and 30 September) and summarises the new standards and interpretations that apply to current reporting periods, as well as issued standards that are effective in future periods.
    • Good Group (International) Limited: Our set of illustrative interim and annual financial statements incorporates the applicable presentation and disclosure requirements, which are referenced throughout.
    • International GAAP Disclosure Checklist: Our publication captures the current disclosure requirements, as well as disclosures that are permitted to be adopted early, to help you comply with IFRS in your interim and year-end IFRS financial statements. These tools enable you to quickly identify which of the changes are likely to affect your company. Gaining an initial understanding of the standards will help you to determine those that will require a more detailed assessment. Your EY team is available to advise you, as needed.
    These tools enable you to quickly identify which of the changes are likely to affect your company. Gaining an initial understanding of the standards will help you to determine those that will require a more detailed assessment. Your EY team is available to advise you, as needed.
  • 2014 Executive and Board Remuneration Report: Executive summary
    EY’s 11th edition, 2014 Executive and Board Remuneration Report, is designed to assist you to make executive remuneration strategies more effective. The report presents commentary and insight into market, legislative, regulatory, governance, tax and shareholder issues affecting executive and board remuneration.

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IFRS news and updates

  • IFRS Developments: Boards back away from key aspects of leases proposal
    In their joint redeliberations in March, the IASB supported a single on-balance sheet model for lessee accounting while the FASB supported a dual on-balance sheet model. Despite this fundamental difference, the Boards reiterated their commitment to seek a converged solution.

    The Boards indicated that they do not intend to significantly change lessor accounting. Instead, they support the retention of a dual classification model. The Boards also reached tentative decisions on lease term, a short-term lease exception and other ways to simplify their 2013 proposal.

  • IFRS for SMEs Update
    The IASB has issued its February update for IFRS for SMEs.

    Access the paper here:
    http://media.ifrs.org/2014/SME/February/SMEUpdate%20Feb2014.pdf

  • IASB March 2014 update
    The IASB met at the IASB offices in London and in Norwalk, USA from 13-21 March 2014. The publication below summarises the key issues discussed.

    Access the paper here:
    http://media.ifrs.org/2014/IASB/March/IASB-Update-March-2014.pdf


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AASB news and updates

  • Proposals to amend AASB 1053 – ED 248

The AASB has issued ED 248 Amendments to AASB 1053 – Transition to and between Tiers, and related Tier 2 Disclosure Requirements. The ED aims to clarify the existing requirements of AASB 1053 and proposes new requirements in relation to applying Tier 2 reporting requirements.

Comments are requested to the AASB by 19 May 2014.

Access the paper:
http://www.aasb.gov.au/admin/file/content105/c9/ACCED248_3-14.pdf


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Regulatory update

  • ASIC Information sheet on audit quality

    ASIC has released Information Sheet 196 Audit Quality: The role of directors and audit committees, which aims to help directors and audit committees develop robust standards as part of its commitment to improve audit quality. In particular, it covers the following areas:

    • Why audit quality is important
    • The responsibilities of the auditor
    • The roles of directors and audit committees
    • The responsibilities of directors for auditor independence
    • Who should manage the appointment of auditors
    • What matters should be considered in setting audit fees
    • What directors and audit committees can do to promote audit quality

Access the paper here:
http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/info196-Audit-quality-published-17-March-2014.pdf/$file/info196-Audit-quality-published-17-March-2014.pdf


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Industry in focus

Public sector

  • IPSAS Outlook February/March 2014 issue 
    The latest issue of IPSAS Outlook focuses on the state of IPSAS adoption in Africa and includes interviews with IPSAS members in Africa who share their views on pertinent issues and their potential impact for the public sector.

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On the horizon

Closing dates for comment letters on exposure drafts and consultation papers:

 

Exposure draft AASB comment due date IASB comment
due date
IPSASB comment due date
Post-implementation Review: IFRS 3 Business Combinations 2 May 2014 30 May 2014 N/A
ED 248  Amendments to AASB 1053 19 May 2014 N/A N/A
ED 54 Proposed Recommended Practice Guideline -  Reporting Service Performance Information NA N/A 31 May 2014


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Events and webcasts

Upcoming webcasts - 2014 Financial Reporting Update

Join our first Financial Reporting Update webcast in the 2014 series and learn how to position your company in a new reporting environment.

During the webcast, our panel of experts will  discuss:

  • The latest developments in new, revised and amending reporting standards
  • The practical challenges facing companies in the current financial reporting environment
  • Trends arising from the 2013 reporting cycle

Date: Tuesday, 8 April 2014
Time: Brisbane, Canberra, Melbourne and Sydney: 3.00pm – 4.00pm
Adelaide: 2.30pm – 3.30pm
Perth: 1.00pm – 2.00pm

Register for this webcast here.

Archived recordings of all our previous webcasts are available here



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