Financial Reporting Newsletter: Latest Financial News and Changes

This financial reporting newsletter provides an overview of recent developments and changes in accounting standards. It covers key updates from AASB and IFRS, including new simplified disclosure standards for Tier 2 entities, the removal of special purpose financial statements for certain for-profit firms, amendments to AASB 101 regarding the classification of liabilities, proposals for improving financial statements and the use of non-GAAP measures, and the application of IFRS in the context of the coronavirus pandemic. The newsletter also discusses the IASB's decision on the new effective date for IFRS 17 and revised standards for investment reporting. The newsletter is designed to keep accounting professionals informed about changes that may impact their work, providing links to further information and resources.

FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student
Name of the University
Author’s Note

FINANCIAL ACCOUNTING
NEWS LETTER

FINANCIAL ACCOUNTING
NEW SIMPLIFIED DISCLOSURE
STANDARD FOR FOR-PROFIT AND
NOT-FOR PROFIT TIER 2 ENTITIES (19
MARCH, 2020)
The AASB has developed the AASB 1060
General Purpose Financial Statements –
Simplified Disclosures for For-Profit and Not-
for-Profit Tier 2 Entities in combination with
AASB 2020-2 Amendments to Australian
Accounting Standards – Removal of Special
Purpose Financial Statements for Certain
For-Profit Private Sector Entities; and there is
two specific objectives of AASB behind this.
First, to provide the Tier 2 reporting
requirements for the for-profit firms that will
be restricted to prepare special purpose
financial statements when AASB 2020-2
becomes operational; and second, to minimize
the burden of reporting for both the for-profit
and not-for-profit companies through the use
of existing Tier 2 reporting requirements
(aasb.gov.au, 2020).
SPECIAL PURPOSE FINANCIAL
STATEMENTS REMOVAL FOR
CERTAIN TYPES OF FOR-PROFIT
FIRMS IN PRIVATE SECTOR (18 March,
2020)
AASB has put the restriction of not preparing
the special purpose financial statements under
the AASB standards for certain types of for-
profit private firms staring on or after 1 July
2021. In line with the issue of AASB 2020-2,
the types of for-profit private entities on which
the above-mentioned restriction will be
imposed include firms preparing financial
statements under Part 2M.3 of the
Corporations Act 2001 that include large
proprietary, unlisted public and small
companies controlled by foreign entities; co-
operatives, mutual and other entities that are
required to prepare the financial statements by
complying with either Australian Accounting
Standards or accounting standards; trusts,
partnerships and joint arrangements; and other
for-profit entities (aasb.gov.au, 2020).
AMENDMENTS TO AASB 101 (12 March,
2020)
The main aim of this amendment carried out
by AASB 2020-1 is to provide assistance to
the companies in ascertaining whether debt
and other liabilities having an uncertain date of
settlement need to be classified as current or
non-current assets. Requirement for
classification for debts that need to be settle by
a company is included in this (aasb.gov.au,
2020).
AASB’S PROPOSAL FOR IMPROVING
THE FINANCIAL STATEMENTS AND
THE USE OF NON-GAAP MEASURES
(23 January, 2020)
Non-GAAP measures are frequently
highlighted in media releases and investors
presentation within the annual reports. The
main intentions of ED 298 General
Presentation and Disclosure are to reduce the
need for management performance measures,
to provide improved credibility of financial
statements and others (aasb.gov.au, 2020).

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING
APPLICATION OF IFRS IN THE
PRESENCE OF CORONAVIRUS
UNCERTAINTY (27 March, 2020)
IFRS has published a document by responding
to the concepts associated with the application
of IFRS 9 Financial Instruments during the
Coronavirus outbreak. The main aim of this
document is to highlight requirements within
the standards by highlighting how the
accounting for expected credit loss is affected
by the coronavirus pandemic. It has been
developed for supporting the reliable and
vigorous application of IFRS 9 (ifrs.org,
2020).
DECISION OF IASB ON NEW
EFFECTIVE DATE FOR IFRS 17 (17
March, 2020)
The discussion on IFRS 17 Insurance
Contracts has been completed by the IASB
and the decision has been taken that the
standard will be deferred to the financial
reporting period commencing on or after 1
January, 2023. Decision has been taken to
extend the exemption in place for some
insurers for the application of IFRS 9 so that
they can apply both IFRS 9 and IFRS 17 at the
same time (ifrs.org, 2020).
REVISED STANDARDS FOR
REPORTING INVESTMENT (26 March,
2020)
Revised Standards for Investment Reporting
(SIRs) 1000-5000 and a new 6000 dealing
with the Quantified Financial Benefits
Statements (QFBSs) has been issued by the
FRC in line with the City Code. The covid-19
pandemic has delayed the implementation
process of the same (frc.org.uk, 2020).

FINANCIAL ACCOUNTING
References
Financial Reporting Council . (2020). Frc.org.uk. Retrieved 12 April 2020, from
https://www.frc.org.uk/news/march-2020-(1)/revised-standards-for-investment-
reporting
News . (2020). Aasb.gov.au. Retrieved 12 April 2020, from
https://www.aasb.gov.au/News/New-simplified-disclosure-standard-for-For-Profit-
and-Not-for-Profit-Tier-2-entities?newsID=357744
News . (2020). Aasb.gov.au. Retrieved 12 April 2020, from
https://www.aasb.gov.au/News/Removal-of-Special-Purpose-Financial-Statements-
for-certain-types-of-for-profit-private-sector-entities?newsID=357743
News . (2020). Aasb.gov.au. Retrieved 12 April 2020, from
https://www.aasb.gov.au/News/Amendments-to-Australian-Accounting-Standards---
Classification-of-Liabilities-as-Current-or-Non-current-(Amendments-to-AASB-
101)?newsID=357741
News . (2020). Aasb.gov.au. Retrieved 12 April 2020, from
https://www.aasb.gov.au/News/General-Presentation-and-Disclosures--Proposals-to-
improve-the-financial-statements-and-the-use-of-non-GAAP-measures?
newsID=357732
IFRS . (2020). Ifrs.org. Retrieved 12 April 2020, from https://www.ifrs.org/news-and-
events/2020/03/application-of-ifrs-9-in-the-light-of-the-coronavirus-uncertainty/
IFRS . (2020). Ifrs.org. Retrieved 12 April 2020, from https://www.ifrs.org/news-and-
events/2020/03/ifrs-17-effective-date/