AASB Revisions & International Accounting Standards

This assignment examines the recent revisions made by the Australian Accounting Standards Board (AASB) to its Conceptual Framework, focusing on how these changes align with the International Accounting Standards Board's (IASB) guidelines. It explores the reasons behind these revisions, their impact on accounting standards reliability, and the implications for both Australia and the global financial reporting landscape.

Running head: AYB200 Financial Accounting Semester 1 2017
AYB200 Financial Accounting
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Executive Summary
This report is about the Australian Accounting Standards Board (AASB) Conceptual
Framework and its compliance with the International Accounting Standards Board (IASB).
This report contains the latest developments made in the accounting standards of IASB
monitored by the technical team. The Conceptual Framework has been revised by the IASB
and the revised standards should be complied and approved by AASB for standardization of
the accounting standards being practiced in Australia. The first part of the following report
contains the overview of the key aspects of the concurrent AASB conceptual framework. In
this part discussion of the previous standards of IASB and proposed revision aspects are
mentioned which are to be introduced in the newer version of the conceptual framework.
It has been clearly denoted that which aspects needed to be revised and by which authority
and due to what reasons. The second part describes in summary the key changes made in the
revised IASB conceptual framework which is different from the AASB conceptual
framework. Point wise description is given of the accounting standards which were changed
and the reason of amendment. The third part of this report contains the position statement of
whether AASB should adopt the IASB framework in its current form and discussion was
done on the basis of “Sector-Neutral” Australian context.

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Table of Contents
Introduction................................................................................................................................3
Overview of the key aspects of the concurrent AASB Conceptual Framework........................4
Summary of the key changes in the revised IASB conceptual framework compared to the
AASB framework.......................................................................................................................4
Position statement of whether the AASB should adopt the IASB framework in its current
form based on assessment of its suitability for the “sector-neutral” Australian Context...........5
Conclusion..................................................................................................................................7
Reference....................................................................................................................................8
Appendix....................................................................................................................................9

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Introduction
Australian Accounting Standards Board (AASB) has made revisions in its Conceptual
Framework for presenting and preparing financial statements. The changes have been made
in the International Accounting Standards Board’s (IASB) Conceptual Framework for
Financial Reporting (Aasb.gov.au, 2017). In its Exposure Draft it is mentioned that he
changes were made to tackle some areas which are left without proper consideration of the
accounting standards. These areas may be measurement, presentation and disclosure,
reporting entity, financial performance and de-recognition. The changes in the revision are to
be discussed and commented by the experts in AASB to decide that whether the changes are
to be incorporated and complied or not and if accepted then for what reasons and on what
grounds. In the following report we will discuss the key points of the Conceptual Framework.

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Overview of the key aspects of the concurrent AASB Conceptual Framework
Financial Reporting is done taking the Conceptual Framework which defines the
purpose and concepts of financial reporting. It is the method with the objective of helping the
Australian Accounting Standards Board (AASB) to make criterions which are constructed on
concrete concepts (Aghimien & Bashnini, 2013). It also helps in the development of policies
of accounting which are consistent when there are no standards accountable for a specific
transaction or result or when an accounting policy is allowed by any standard. It majorly
helps in the interpretation and understating of the given Standards. There is a need for
revising the Conceptual Framework from time to time. The reason for its revision is that
some new features which come along with time are not there in the previous ones. Due to this
reason the guidance which the framework provides becomes unclear. AASB has reserved the
existing framework which was going to be amended to the length so as to incorporate
Chapters 1 and 3 to the appendices to the existing framework (Asic.gov.au., 2017). AASB
has extended the not-for-profit precise materials where it is needed to make it clear the
concepts from the viewpoint of not-for-profit objects in the public and private sectors
whereas; the IASB materials are given in the form of for-profit entities. The concurrent
AASB conceptual framework is being released to supersede the previously given qualitative
and objective characteristics of the financial statements. The new and revised Conceptual
Framework contains new qualitative characteristics of Financial Statements which are more
relevant according to the standards.
Summary of the key changes in the revised IASB conceptual framework compared to
the AASB framework.
As per the study we have found that there are several changes were made by the IASB
in its revised Conceptual Framework on the basis of Discussion paper published in 2012
(Aasb.gov.au., 2017) (Asic.gov.au., 2017). It was made imperative that reconsideration was
required in one or two chapters of the previous Conceptual Framework. The new proposed
changes were:
To provide more emphasis on the discussion on the financial reporting objectives the
information regarding financial reporting was given more importance (Kober & Ng, 2013).
That information of managerial stewardship needed further assessment of the resources of the
entities.

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For reintroduction of the obvious references which needed far-sightedness and to
make it a fact that prudence was vital for attaining neutrality.
To make it obvious that authentic representation denotes the substance of an
economic characteristic and not by stating in just its legal form.
To clear the state of uncertainty and its measurement that is only one of the many
factors which can convert the financial statement into an irrelevant form. It also states that
there is a trade relationship between the concepts of measurement uncertainty and other
aspects which makes the information relevant.
To regularly identify and state the relevance of characteristics and authentic
representation and more than one qualitative aspects of relevant financial information.
Other characteristics of reliability which was previously described in the Conceptual
Framework made necessary changes to establish the fact that faithful representation is
described by reliability in more promising manner. IASB is adamant in implementing these
changes and is not asking for any comments on other characteristics and is not ready to make
any important changes to other characters of this concept (Asic.gov.au., 2017).
Position statement of whether the AASB should adopt the IASB framework in its
current form based on assessment of its suitability for the “sector-neutral” Australian
Context.
AASB has given a response to the IASB Conceptual Framework changes which is a
positive one. In its response it was stated that AASB gives full support to the accounting
standards having Sector Neutrality and strongly believes in the choice of increasing the scope
of IASB conceptual framework (Asic.gov.au., 2017). AASB considers that IFSB Foundation
Trustees are the best way to decrease the differences between the sectors relating to
accounting standards. AASB believes that there should be good governance and
misunderstanding of standard-setting should not be there between different sectors of
accounting. All the standards should be integrated for uniform for accounting purposes.
AASB is endowed with the responsibility of setting accounting standards for all sectors
which include not-for-profits, private sectors and public sectors as well which is coming
down as legacy for more than 30 years (Iasplus.com, 2017). About Sector neutrality, AASB I

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firm in making a point that it is vague to divide the issues of reporting between similar and
relevant standards such as global markets and public sectors even though they are not part of
the capital markets at the global level. AASB recommends bringing together IPSASB and
IFRS into one ambit as it believes that the current regulations do not permit those two
organizations to work together (Ifrs.org, 2017). AASB also states that there is a need to
establish separate oversight and monitoring bodies within the guidance of International
Federation of Accountants (IFAC). Another point raised by AASB was that if IPSASB is
established outside IFAC then it will create sector specific financial reporting which is vague
and uncoordinated.

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Conclusion
In the above report it can be seen that the changes made in the revision of the
Conceptual Framework of AASB on the guidelines of IASB are discussed. The reasons for
which the revisions were purposed and relevance of the changes which will make the
accounting standards more reliable were discussed. The report mentions the current standards
of AASB and IASB to develop new standards to replace old ones for better understanding
and compliance of accounting standards on the global level and in Australia too. It is very
clearly stated that AASB has strongly supported the changes made by IASB giving proper
reasons and backing up the important points which needed to be amended and added. AASB
has comprehensively tackled the issues revised in their concurrent conceptual framework.

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Reference
Aasb.gov.au. (2017). Australian Accounting Standards Board (AASB) - Home. Aasb.gov.au.
Retrieved 4 September 2017, from http://www.aasb.gov.au/
Aghimien, P., & Bashnini, K. (2013). The development of international financial reporting
standards: origination to present day. International Journal of Business, Accounting,
& Finance, 7(2).
Asic.gov.au. (2017). ASIC Home | ASIC - Australian Securities and Investments
Commission. Asic.gov.au. Retrieved 4 September 2017, from http://www.asic.gov.au/
Iasplus.com. (2017). IAS Plus. Iasplus.com. Retrieved 4 September 2017, from
http://www.iasplus.com/en
Ifrs.org. (2017). IFRS. Ifrs.org. Retrieved 4 September 2017, from http://www.ifrs.org/
Ji, K. (2013). Better late than never, the timing of goodwill impairment testing in
Australia. Australian Accounting Review, 23(4), 369-379.
Kober, R., Lee, J., & Ng, J. (2013). GAAP, GFS and AASB 1049: perceptions of public
sector stakeholders. Accounting & Finance, 53(2), 471-496.
Potter, B. (2013). Differential Reporting. Australian Accounting Review, 23(1), 2-2.

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Appendix
Source: (Aasb.gov.au, 2017)

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Source: (Iasplus.com, 2017)