The Regulatory Environment and Financial Reporting

This document provides an overview of the regulatory environment and financial reporting in the field of financial accounting. It discusses the amendments to Australian accounting standards, including the proposed amendments to IPSAS 19 and the changes in funding liabilities. It also explores the usefulness of special purpose financial statements and the impact of IFRS 16 on leasing. The document includes references for further reading.

Running head: FINANCIAL ACCOUNTIN G
Financial Accounting
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2FINANCIAL ACCOUNTING
Table of Contents
Answer to question 1:................................................................................................................3
References::................................................................................................................................6

3FINANCIAL ACCOUNTING
ANSWER TO QUESTION 1:
THE REGULATORY ENVIRONMENT AND FINANCIAL REPORTING
AUSTRALIAN
Aasb 2019-X
Amendments to
Australian
Accounting Standards
(24th January 2019):
This standard has been
issued for supporting the
conceptual framework of
AASB (Aasb.gov.au,
2019). In the primary
stage, this standard would
be applied for the private
sector organisations and
other profit firms
choosing to apply the said
framework (Aasb.gov.au,
2019).
Collective and
individual services and
emergency relief in
public sector (12th
February 2019)
ED has proposed
amendments to IPSAS 19
related to provisions,
contingent assets and
liabilities, in which there
would be no realisation of
provision to deliver
individual and collective
services (Aasb.gov.au,
2019).
Exposure draft
related to onerous
contracts (8th January
2019):
According to this draft,
AASB 137 needs to be
amended for depicting the
cost of fulfilling a
contract includes
incremental costs as well
as other costs like
equipment depreciation
associated with the
contract.
Not-for-profit leases
and right-of-use
assets (20th December
2018):
A draft is published by
AASB, which considers
variations from ED 286
like enabling temporary
alternative for applying
on right-of-use assets on
class basis and
amendment of AASB
1049 in order to measure

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assets at historical prices
than fair values
(Aasb.gov.au, 2019).
Usefulness of special
purpose financial
statements (13th
December 2018):
AASB has conducted a
survey, in which it has
been identified that if the
special purpose financial
statements are not
engaged in applying
measurement and needs
of recognition in
Australian standards of
accounting, which would
create a significant issue.
As a result, the preparers
have formed for excess
transitional relief as well
as consolidation
accounting.
Usefulness of the new
IFRS 16 leasing
standard (8th January
2019):
There has been
substantial change in
accounting for lessees
under IFRS 16. As per
this standard, the lessees
are not need to segregate
between finance lease and
operating lease. Instead,
maximum leases could be
capitalised through
recognition of lease
liability and right-of-use
asset on the statement of
financial position.
However, the impact is
not significant on the
lessors.
Modifications in funding liabilities (21st February 2019):
The “IASB (International Accounting Standards Board)” has made some
modifications that require the companies to make disclosures for allowing the financial
statement users to detect any variations in liabilities occurring due to financing activities
(Ifrs.org, 2019). It is possible to meet the requirement through reconciliation of the beginning
and closing balances of liabilities (IAS 7).
Overview of IAS 36 (14th March 2019):

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The IASB has attempted to find out the likely improvements in disclosures about the
acquisitions and simplifications to accounting for goodwill along with enhancements for test
of impairment (Ifrs.org, 2019).
Publication of IASB updates (25th January 2019):
In the year 2019, IASB has disclosed its updates on a number of standards, which
constitute of IFRS 17, activities related to rate regulation, extractive activities along with
deferred tax related to assets and liabilities from a single transaction (Ifrs.org, 2019).
Disclosure initiative (21st March 2019):
A document has been disclosed by the IFRS Foundation, which provides an overview
of the research work related to the board depending on the feedback obtained. This mainly
includes the initiative related to disclosure and inference reached after the analysis of
feedback.

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REFERENCES::
Aasb.gov.au. (2019). News. Retrieved 3 April 2019, from
https://www.aasb.gov.au/News/Fatal-flaw-review-draft---Proposed-Standard-AASB-
2019-X-Amendments-to-Australian-Accounting-Standards---References-to-the-
Conceptual-Framework?newsID=310721
Aasb.gov.au. (2019). News. Retrieved 3 April 2019, from
https://www.aasb.gov.au/News/Public-Sector--Collective-and-Individual-Services-
and-Emergency-Relief?newsID=310725
Ifrs.org. (2019). IFRS. Retrieved 3 April 2019, from
https://www.ifrs.org/news-and-events/2019/02/feature-changes-in-financing-
liabilities/
Ifrs.org. (2019). IFRS. Retrieved 3 April 2019, from
https://www.ifrs.org/news-and-events/2019/01/ifrs-16-is-now-effective/
Aasb.gov.au. (2019). News. Retrieved 3 April 2019, from
https://www.aasb.gov.au/News/Right-of-use-assets-of-not-for-profit-lessees?
newsID=310716
Aasb.gov.au. (2019). News. Retrieved 3 April 2019, from
https://www.aasb.gov.au/News.aspx
Aasb.gov.au. (2019). News. Retrieved 3 April 2019, from
https://www.aasb.gov.au/News/How-special-are-special-purpose-financial-
statements---For-profit-User-and-Preparer-Survey-Results?newsID=310714

7FINANCIAL ACCOUNTING
Ifrs.org. (2019). IFRS. Retrieved 3 April 2019, from
https://www.ifrs.org/news-and-events/2019/01/january-iasb-update-published/
Ifrs.org. (2019). IFRS. Retrieved 3 April 2019, from
https://www.ifrs.org/news-and-events/2019/03/disclosure-initiative-principles-of-
disclosure-project-summary-now-available/