Operative Dates of Forthcoming Standards

16 July 1999

Mr. Ken Spencer
Chairman
Australian Accounting Standards Board
PO Box 132
Caulfield Vic 3162

Dear Ken

Operative Dates of Forthcoming Standards

I write to you on behalf of Group of 100 members (G100) concerning the operative dates of forthcoming Accounting Standards. I understand that in the remainder of this calendar year the Board is expected to issue Standards on Financial Reporting by Segments; Revaluations: Recoverable Amount; Statement of Financial Performance; Statement of Financial Position; Financial Report Disclosures; Foreign Currency and Income Tax. In addition, on the basis of information reported in the Board’s Action Alert, Standards on Interim Reporting, Discontinuing Operations, Employee Benefits and Earnings per Share are close to completion.

I understand that in respect of the proposed Accounting Standard on "Income Tax", the Board has decided to have a long implementation period by extending the operative date in order to ensure that entities are in a position to effectively adopt its requirements. The G100 supports this approach to determining the operative date of Standards. A number of G100 members has expressed concern that the large number of forthcoming Standards will place an overload on their ability to implement the new requirements at a time when they are required to implement a number of other changes in information systems. These members have expressed the view that there are constraints on their ability to implement a large number of Standards in a single reporting period. As such, they believe, it is important for the Board to consider not only the operative date of each of the forthcoming Standards individually, but also consider the impact of issuing a number of Standards with the same operative date on the ability of entities to implement the new requirements.

Therefore, I propose that before the operative dates of the forthcoming Standards are finalised, representatives of the Board, AARF staff and G100 form an informal working party to consider the matters raised above. The purpose of the working party would be to ensure that the Board is aware of the likely impact of new requirements becoming operative in any one year and the ability of entities to successfully implement them when it is making decisions on the operative dates of the Standards. I anticipate that one meeting of the working party would be adequate to finalise a paper on the topic for consideration by the Board.

The G100 is aware that the Board will not wish to take any action that unduly slows the issue of these Standards under the harmonisation program. I believe the working party could quickly and efficiently compile the necessary information for the Board’s consideration. The G100 has already identified a group of members that would be willing to participate in such an arrangement, should you so agree.

I would be pleased to discuss this proposal with you and look forward to your response.

Yours sincerely,

Bryce JH Denison
National President

c.c. Mr. D. Edwards, Executive Director, Australian Society of CPAs
Mr. S. Harrison, Executive Director, The Institute of Chartered Accountants in Australia