Analysis of Significant Changes in AASB 1031 Materiality (1995-2015)

This report provides a comprehensive overview of the significant changes to AASB 1031 Materiality, issued by the Australian Accounting Standards Boards (AASB), from 1995 to 2015. The analysis begins with the revised standards in 1995 and traces the evolution through the application of the compiled version in 2000-2001, which included amendments for accounting policies. It then examines the publication of notices in 2004, focusing on quantitative thresholds. The report further explores the gradual withdrawal and framework design in 2005, leading to the standard's applicability for annual reporting starting in 2011. The changes made in 2014-2015, including appropriate disclosures, introduction of interim standards, and changes to budgetary reporting are discussed. The report concludes by addressing the AASB's proposal to withdraw AASB 1031 in February 2012 due to reasons such as no international equivalent, gradual withdrawal of Australian guidance, and updated guidance on materiality in the IASB Conceptual Framework, with the withdrawal becoming effective from July 1, 2015. The report highlights the removal of specific quantitative guidance for materiality as a major impact of the withdrawal.

CHANGES RELATED TO AASB 1031 MATERIALITY

Based on the given scenario, it can be analyzed that significant changes and withdrawal
related to AASB 1031 Materiality is witnessed, which is issued by the Australian Accounting
Standard Boards. In 1995, revised standards based on AASB 1031 Materiality were found.
There were no such significant differences in that, further, from 2000 to 2001, the compiled
version of AASB 1031 Materiality was applied to annual reporting (Joubert et al. 2017). This
includes amendments based on AASB 1031 Materiality standards for accounting policies and
explicit guidance. In 2004, notice based on AASB 1031 Materiality was published in
Commonwealth of Australia Gazette number 294. Based on this, quantitative thresholds used
the guidance for determining the amount based on aggregate items (Gilchrist and Simnett,
2019).
Besides, in 2005, it deals with interpretation and application standards like AASB1048. At
this time, gradual withdrawal was done and a new framework was designed. Thus, with the
passing time, AASB 1031 became applicable for the annual reporting periods by
commencing it in 2011. However, in 2014, AASB 1031 Materiality was applied to annual
reporting by considering accounting policies, estimates and various errors related to it. Major
changes were made to the materiality in the year 2014-2015 (aasb.gov.au, 2019). The
changes to the standards involve appropriate disclosures based on the accounting policies.
The Interim standard was introduced, changes based on budgetary reporting were found. It
was recommended that entities could accept the changes for simplifying the analysis of the
accounts or budgets by adaptation of the new AAS requirements.
2

References
aasb.gov.au (2019). AASB 1031 materiality. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB1031_07-04_COMPdec09_01-
11.pdf [Accessed on 20th Sep 2019]
Gilchrist, D.J. and Simnett, R., 2019. Research horizons for public and private not‐for‐profit
sector reporting: moving the bar in the right direction. Accounting & Finance, 59(1), pp.59-
85.
Joubert, M., Garvie, L. and Parle, G., 2017. Implications of the New Accounting Standard for
Leases AASB 16 (IFRS 16) with the Inclusion of Operating Leases in the Balance Sheet. The
Journal of New Business Ideas & Trends, 15(2), pp.1-11.
3