Newsletter: Changes in Financial Reporting (April-July 2018)

This newsletter summarizes key changes and developments in the financial reporting environment from April 1, 2018, to July 31, 2018, focusing on their potential impact on staff. It covers technical issues such as changes in the Australian Goods and Services Tax (GST) regarding offshore supplies and updates from the International Accounting Standards Board (IASB), including discussions on financial instruments and accounting policy changes. The newsletter also addresses the regulation and monitoring of financial reporting by the Australian Securities and Investments Commission (ASIC), highlighting new requirements for disclosing the impact of accounting standards and the general recognition of income, assets, and liabilities. Furthermore, it touches on the political influences of adopting International Financial Reporting Standards (IFRS) in Australia, emphasizing the importance for staff to understand these changes for effective performance.

Running head: NEWSLETTER FOR CHANGES AND DEVELOPMENTS IN THE
FINANCIAL REPORTING ENVIRONMENT (FROM 1 APRIL 2018 TO 31 JULY 2018 1
Newsletter for Changes and Developments in the Financial Reporting Environment (from 1 April
2018 to 31 July 2018)
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Professor
Institution
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NEWSLETTER FOR CHANGES AND DEVELOPMENTS IN THE FINANCIAL
REPORTING ENVIRONMENT (FROM 1 APRIL 2018 TO 31 JULY 2018) 2
Newsletter for Changes and Developments in the Financial Reporting
Environment (from 1 April 2018 to 31 July 2018)
The main purpose of this newsletter is to provide a summary of changes and developments in the
financial reporting environment for the period between 1 April 2018 and 31 July 2018. These changes and
developments may have significant impacts on the work of each staff.
a. Technical Issues
i. Changes in Goods and services Tax (GST)
For instance, the Australian Goods and services Tax (GST) landscape changed beginning 1 July
2018. Consequentially, the offshore supplies of goods with low value entering Australia are caught within
the Goods and services Tax (GST) net, and this is believed to have great impact on businesses that sell to
consumers in Australia. Starting 1 July 2018, Goods and services Tax (GST) will be payable by suppliers
dealing with goods of low value to consumers who are not registered with GST (Henderson et al., 2018).
More details can be acquired from https://www.bdo.com.au/en-au/insights/tax/technical-updates/gst-
changes-from-1-july-2018
ii. Updates on the International Accounting Standards Board (IASB)
 On July 26, 2018, the Accounting Standards Board (AcSB) wrote a letter to (IASB) responding to
their exposure draft that had been issued earlier on March 2018. The letter disagreed with the
proposal of amending IAS 8 to lower the impracticability of the threshold for applying retrospectively
the voluntary changes in the accounting policies as a result of IFRS agenda decisions. AcSB argues
that the proposals could possibly lead to unintended and unfavorable consequences in jurisdictions,
including Australia, where changes in the accounting policies would not be voluntary in practice

NEWSLETTER FOR CHANGES AND DEVELOPMENTS IN THE FINANCIAL
REPORTING ENVIRONMENT (FROM 1 APRIL 2018 TO 31 JULY 2018) 3
(Alexander, 2018). Kindly view more details on:
https://www.iasplus.com/en-ca/news/part-i-ifrs/copy_of_07/iasb-releases-third-webcast-on-fice-dp
 On July 30, 2018, IASB issued its third webcast regarding its discussion on financial instruments with
characteristics of equity. The board discussed its preferences in classifying own equity derivatives
with an exception of those having an obligation for a company to re-own its shares. Thirdly, on July
31, 2018, the Board issued its fourth webcast in relation to its prior discussion on financial
instruments with characteristics of equity on compound instruments and redemption as well
(Henderson et al., 2018). For more details, please check: https://www.iasplus.com/en-ca/news/part-i-
ifrs/copy_of_07/iasb-releases-fourth-webcast-on-fice-dp
b. Regulation and Monitoring of Financial Reporting
i. On June 30, 2018, the Australian Securities and Investments Commission (ASIC) issued an
outline of its focus on financial reports. The regulating body has urged companies to meet
this new requirement that significantly affects the assets, profits and liabilities reported by
companies. The board highlights that the new accounting requirement will affect many
companies as the standards will materially affect when and how to recognize revenue.
ii. The general recognition and identification of income, assets and liabilities as well as
accounting by insurance companies will also be affected significantly by the new standards.
The ASIC also states that new disclosure requirements will be introduced by the new
standards.
iii. Annual financial reports at June 30, 2018 must disclose all future impacts of new standards of
accounting (Howieson, 2017).
Note: Please see more information from: https://www.minterellison.com/articles/asic-areas-of-focus-for-
30-june-2018-financial-reporting
c. Political Influences or Other Potential Developments

NEWSLETTER FOR CHANGES AND DEVELOPMENTS IN THE FINANCIAL
REPORTING ENVIRONMENT (FROM 1 APRIL 2018 TO 31 JULY 2018) 4
Australia has adopted the International Financial Reporting Standards (IFRS) that have been
issued by the IASB. Australian Accounting Standards are also recognized globally and the IASs have
been broadly designed for meeting the diverse needs of many nations (Henderson et al., 2013).
NOTE: The above changes and developments in financial reporting in Australia from 1 April
2018 to 31 July 2018 are considered critical since they have a great impact on the work of each staff.
Therefore, each staff should ensure he or she understands them clearly, for an easy running of his or her
duties.

NEWSLETTER FOR CHANGES AND DEVELOPMENTS IN THE FINANCIAL
REPORTING ENVIRONMENT (FROM 1 APRIL 2018 TO 31 JULY 2018) 5
References
Alexander, D. (2018). The IASB: the standards and their widespread adoption. London:
Routledge.
Henderson, Scott, Peirson, Graham, Herbohn, Kathy, Bryan. (2018). Issues in Financial
Accounting [15th edition]. London: Pearson Australia Group Pty. Ltd.
Howieson, B. (2017). The Phoenix Rises: The Australian Accounting Standards Board and
IFRS Adoption. Journal of International Accounting Research, 16(2), 127-154.
doi:10.2308/jiar-51825
Trontelj, J., & Shenton, G. (2018). Analog digital ASIC design. London: McGraw-Hill.