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Changes and Developments: Financial Reporting Environment

   

Added on  2020-03-07

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Question 1Changes and developments in the financial reporting environment(1 May 2017 to 4 August 2017)Issue of report by ESMA in regard to application of IFRS 13The report issued by this authority provides the procedure for application of the fair valuemeasurement in regard to IFRS 13. The review had given stress on various areas such asdisclosures at the fair value, account units, market activity levels, adjustment in regard tovaluation of the derivatives. (Deloitte, 2017)Amendments proposed by IASB in regard to IAS 16As per this amendment, the amount that is received by way of selling items which are beingproduced by way of bringing asset to particular location will be prohibited for any kind ofdeduction from the value and cost of plant, equipment and property. (Deloitte, 2017)Issue of AASB interpretation 23 in regard to uncertainty over income tax treatmentsAs per this interpretation, entity will be eligible to recognize the Current Tax Asset, Current TaxLiability, Deferred Tax Asset or the Deferred Tax Liability in relation to requirements of AASB112 for the uncertain tax treatments and this interpretation will be applied in regard to annualperiods of reporting that will start on or after 1 January 2019. (AASB, 2017)Financial accounting standard board updatesThe accounting standard board had issued updates in regard to topic 260 that is earning pershare, topic 480 which provides in regard to the liabilities from equity and topic 815 that isderivatives and hedging. (FASB, 2017)
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Issuance of insurance contracts IFRS 17This IFRS 17 requires that insurance liabilities in the business will be measured at current valueof fulfillment. This will help in making uniform presentation of the insurance contracts. TheIFRS 17 will be applicable on the reporting periods that will begin from January 1, 2021.(Deloitte, 2017)Aligning of FRC 102 with IFRSFinancial reporting council had given a decision that FRS 102 will be used with IFRS 9, 15 andIFRS 16. (Deloitte, 2017)Updation to ASX listing rulesThe Updation had been done in regard to Guidance note 15 in regard to calculation of the initiallisting fee in relation to entities that are engaged in demerger or the spinning off. Thus it willhelp in providing the first entry list for ASX. (ASX, 2017) Progress of IASB and FASB in relation of convergence programThe IASB and FASB are working continuously towards their work in relation to their joint workin regard to improvement in the International Financial reporting standards and US generallyaccepted accounting principles hence they are working towards their convergence program.(FASB, 2011)Surveillance program of financial reporting of ASICThe surveillance program had been made in order to improve the quality and productivity offinancial reporting. The program requires that the entire annual and the interim reports are beingmade in accordance with the respective accounting standards that apply on various companies.The accounts are randomly selected for the purpose of review. The Company’s accounts arebeing reviewed in order to determine that they are in compliance with the corporation act. Thus
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remedial action is also taken by ASIC where the actions undertaken by the company are notappropriate. (ASIC, 2017)
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