17 November 2003

Mr David Boymal
Chairman
Australian Accounting Standards Board
PO Box 204
COLLINS STREET WEST 8007

Dear David

Options in Standards

The Group of 100 is concerned about the potential impact of the AASB’s decision at its October meeting regarding its approach to the retention of options in IASB Standards in the Australian equivalent to those Standards (Action Alert 66 – October 2003).

The Group of 100 disagrees with the AASB’s decision. As a strong supporter of the convergence and harmonisation strategy we believe that IASB Standards should be adopted for application in Australia without changing the requirements in IASB Standards unless there are compelling reasons to do so.

One of the benefits of the convergence and harmonisation policy is that a single set of accounting policies can be applied throughout company groups without the need to deal with separate and different national requirements. Under the AASB’s policy in respect of options in IASB Standards, Australian reporting entities whose overseas parent has adopted IASB Standards may be required to apply accounting policies that differ from those of the parent. For example, this will occur in respect of the use of the ‘corridor approach’ to accounting for actuarial gains and losses of defined benefit superannuation plans and in respect of the proportional consolidation method of accounting for interests in joint venture entities.

The Group of 100 believes that the AASB should reconsider its policy on the adoption of options in IASB Standards.

Yours sincerely

John V Stanhope
National President

© 1998-2012 Group of 100 Inc. ABN 398 391 246
Email the Group of 100 with questions or comments.