External Reporting: Financial Reporting Environment Analysis

This report provides an analysis of external reporting, focusing on changes and developments within the financial reporting environment. It examines key areas such as ASIC's focus on financial reporting, including impairment testing, material disclosures, fair value measurement, and the going concern assumption. The report also addresses international convergence news, highlighting the Indian Ministry of Corporate Affairs' alignment with international accounting standards. Furthermore, it delves into specific exposure drafts and amendments to Australian Accounting Standards (AAS), including disclosures in special-purpose financial statements, deferred tax related to liabilities and assets arising from single transactions, and amendments to the conceptual framework and annual improvements to the standards. These insights provide a comprehensive overview of the current landscape and future trends in financial reporting.

Running head: EXTERNAL REPORTING
External reporting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

2
EXTERNAL REPORTING
IDENTIFICATION OF CHANGES AND DEVELOPMENT IN THE
FINANCIAL REPORTING ENVIRONMENT:
EXPOSURE DRAFT:AMENDMENT TO
AUSTRALIAN
ACCOUNTING
STANDARD-
DISCLOSURE IN
SPECIAL PURPOSE
FINANCIAL
STATEMENT OF
COMPLIANCE
WITH
RECOGNITION
AND
MEASUREMENT
REQUIREMENTS
The users of publicly
lodged special purpose
financial statements
would be provided greater
transparency by
improving the
comparability of the
financial statements. Non-
profit entities are required
to make a disclosure
about the explicit
statement for determining
whether the accounting
policies used in the
preparation of the
financial statement
comply with the
requirements of
measurement and
recognition as per the
AAS.
EXPOSURE DRAFT:
DEFERRED TAX
RELATED
TO
LIABILITIES AND
ASSETS ARISING
FROM SINGLE
TRANSACTION
Companies would
recognize deferred tax
assets on such
transactions for which
they recognize both
liability and assets.
Recognition of the
deferred tax assets shall
be done for all the
temporary differences to
the extent that the taxable
profits can be utilized
against the deductible
temporary differences
(Crowther, 2018). In
addition to this,
amendment has been
made to the existing IAS
12. For identifying the
amount attributable to the
tax purpose, the tax base
of lease liability and right
of use asset is determined
by the entity.
EXPOSURE DRAFT:
REFERENCE TO
THE CONCEPTUAL
FRAMEWORK
A narrow scope
amendment has been
proposed to AASB 3
business combination
without any change in the
accounting requirements.
In the event of acquisition
of business, it would be
required by the entities to
record contingent
liabilities and provisions

3
EXTERNAL REPORTING
that would not be
recorded in other
circumstances.
DECISION TO
PROPOSE
CLARIFICATION
AND
ILLUSTRATIVE
EXAMPLES ON
FAIR
VALUE
MEASUREMENT
FOR
PUBLIC
SECTOR ENTITIES
Under this amendment,
public sector entities are
provided assistance to
apply some of the
principles in the fair value
measurements of AASB
13. For the public sector
not for profit enterprises,
the fair value of assets
can be determined by
using the cost approach in
AASB 13 and such assets
not being held primarily
for generating net cash
inflow and being held for
service capacity (Adams,
2015).
EXPOSURE DRAFT:
ANNUAL
IMPROVEMENT TO
AUSTRALIAN
ACCOUNTING
STANDARD 2018-2020.
The standards that would
be affected subject to the
proposed amendments
include IFRS
(International financial
reporting standard) 9
Financial instruments,
first time adoption of
IFRS, IAS 41 Agriculture
and illustrative examples
accompanying IFRS 16
leases. There are
various exemptions that
can be used by the entities
and it the event of the
subsidiary become first
time adopter compared to
parents , then the
measurement of the
cumulative financial
transactions, assets and
liabilities are done at the
carrying amount that
would be included in the
consolidated financial
statements of parent
entity (Aasb.gov.au,
2019). This amendment
do not apply to the
components of equity. In
addition to this, for the
derecognition of the
financial liabilities, it is
required to make a
clarification on the fees
for assessing the new or
modified financial
liabilities that are
different substantially.
Furthermore, concerning
the lease amendment, it is
required that the
illustration of payments
should be removed from
the lessor to improvement
of leasehold.

4
EXTERNAL REPORTING
REFERENCES:
Aasb.gov.au. (2019). Retrieved 6 August 2019, from
https://www.aasb.gov.au/admin/file/content105/c9/ACCED289_05-19.pdf
Adams, C. A. (2015). The international integrated reporting council: a call to action. Critical
Perspectives on Accounting, 27, 23-28.
Crowther, D. (2018). A Social Critique of Corporate Reporting: A Semiotic Analysis of
Corporate Financial and Environmental Reporting: A Semiotic Analysis of Corporate
Financial and Environmental Reporting. Routledge.
News. (2019). Aasb.gov.au. Retrieved 6 August 2019, from
https://www.aasb.gov.au/News.aspx