Regulatory Environment for Financial Reporting Newsletter 2019

This newsletter summarizes key changes and developments in the financial reporting environment from December 2018 to March 2019, focusing on updates to Australian Accounting Standards (AASB) and International Financial Reporting Standards (IFRS). It covers topics such as amendments to AASB 2019-X related to the conceptual framework, proposed amendments to IPSAS 19 regarding provisions, contingent assets, and liabilities, and the effectiveness of IFRS 16 on lease accounting. The newsletter also addresses the significance of special purpose financial statements, disclosure initiative updates, and potential improvements in extractive activities disclosure. References to relevant AASB and IFRS publications are included, providing staff with resources for further investigation. The document aims to keep accounting firm staff informed about regulatory changes impacting financial report preparation.

News
N e w s l e t t e r
The Regulatory Environment for Financial Reporting
April 2019
Amendments to Australian Accounting Standards (24th
January 2019)
An amended standard AASB 2019-X would be issued for
supporting the AASB conceptual framework. In the current
stage, the application would be limited to the private sector
companies and other for-profit companies voluntarily electing toCollective and individual services and emergency relief in public sector (12th February 2019)
Since 2011, The ED has proposed amendments to
IPSAS 19 Provisions, Contingent Assets and
Contingent Liabilities that no provision would be
realised for the intention in delivering individual and
collective services. No obligation would rely on the
future actions of the organisation (Aasb.gov.au,
2019).
Exposure Draft on
onerous contracts (8th
January 2019)
In this draft, AASB 137 is
proposed to be amended for
stating that the cost to meet a
contract include incremental
costs like material costs and
other costs like depreciation
for equipment related to the
contract (Aasb.gov.au, 2019).
Effectiveness of new
leasing standard IFRS 16
(8th January 2019)
IFRS 16 has changed
accounting for lessees
substantially. According to this
standard, the classification of
leases of a lessee is no longer
needed to be separated into
operating lease and finance
lease. Instead, majority of the
leases would be capitalised by
recognising right-of-use asset
and lease liability on the
balance sheet statement.
However, there is little change
for the lessors (Ifrs.org. 2019).
Changes in financing liabilities
(21st February 2019)
The International
Accounting Standards Board (IASB)
has made an amendment needing
organisations for providing
disclosures to allow the users of the
financial statements for analysing
changes in liabilities arising from
financing activities (Ifrs.org, 2019).
This requirement could be fulfilled
by reconciling the opening and
ending balances of liabilities (IAS 7).
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April 2019 | page 2
The Regulatory Environment for Financial Reporting
Right-of-use assets and
not-for-profit leases (20th
December 2018)
AASB has issued draft that takes into
account the following significant
changes from ED 286. These include
allowing temporary option for
application on right-of-use assets
based on class-by-class and
amendment of AASB 1049 for
gauging those assets at cost,
instead of fair value (Aasb.gov.au,
2019).
Significance of special purpose
financial statements (13th
December 2018)
According to the survey results conducted by
AASB, it has been found that if special
purpose financial statements are not
involved in application of measurement and
recognition requirements in Australian
Accounting Standards; this would lead to a
considerable issue. Therefore, the preparers
have desired for additional transitional relief
through equity and consolidation accounting
(Aasb.gov.au, 2019).
Perspectives on IAS 36: A case
in relation to standard setting
activity (14th March 2019):
The IASB is intending to explore
probable disclosure improvements
regarding acquisitions and
simplifications to goodwill
accounting as well as
enhancements for impairment
testing (Aasb.cmail20.com. 2019).
Publish of IASB
update (25th
January 2019)
In 2019, IASB has
published its updates
on certain standards
that include IFRS 17,
deferred tax
associated with
assets and liabilities
from one transaction,
rate-regulated
activities and
extractive activities
(Ifrs.org, 2019).
Disclosure initiative
(21st March 2019)
The IFRS Foundation has
published a document
that summarises the
research work of the
Board based on the
feedback obtained
regarding the Disclosure
Initiative and conclusion
arrived in light of the
research (Ifrs.org, 2019).

References:
Aasb.gov.au. (2019).
News. Retrieved 3
April 2019, from
https://www.aasb.go
v.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.go
v.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/featu
re-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.go
v.au/News.aspx
Aasb.gov.au. (2019).
News. Retrieved 3
April 2019, from
https://www.aasb.go
v.au/News/How-
special-are-special-
purpose-financial-
statements---For-
profit-User-and-
Preparer-Survey-
Results?
newsID=310714
Ifrs.org. (2019). IFRS. Retrieved
3 April 2019, from
https://www.ifrs.org/news-
and-events/2019/01/janua
ry-iasb-update-published/
Ifrs.org. (2019). IFRS. Retrieved
3 April 2019, from
https://www.ifrs.org/news-
and-events/2019/03/disclo
sure-initiative-principles-
of-disclosure-project-
summary-now-available/
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