8 February 2008

Mr Jeffrey Lucy AM
Chairman
Financial Reporting Council
C/o The Treasury
Corporations & Financial Services Division
Langton Crescent
CANBERRA ACT 2600

Dear Jeffrey

Post-implementation strategy review of IFRSs adoption

The Group of 100 (G100) is an organisation of chief financial officers from Australia’s largest business enterprises with a purpose of advancing Australia’s financial competitiveness.

The G100 believes that it is now appropriate to undertake a post-implementation review of the strategy of adopting International Financial Reporting Standards (IFRSs). A motivation for that strategy was to achieve enhanced transparency, integrity and comparability of financial statements across jurisdictions thereby reducing the cost of capital to Australian companies.

As you will be aware the G100 was a strong supporter of international harmonisation and of the FRC’s strategic directive to the Australian Accounting Standards Board for the adoption of IFRSs for annual reporting periods beginning on or after 1 January 2005. The G100 believes that a post-implementation review is appropriate because:

• there is now substantial experience with the implementation of Australian equivalents to IFRS by Australian companies. As at 30 June 2008 virtually all companies would have three years experience which should provide a rich resource for such a review;
   
• of views expressed by analysts about the need to make adjustments to reported information to better understand the underlying performance of companies; and
   
• of concerns expressed about the complexity of the requirements of a number of Accounting Standards and of financial statements and their relevance in providing decision-useful information to shareholders. These concerns are viewed as one of a number of factors influencing the growing practice by directors of communicating information about the performance of a company to shareholders in a variety of ways other than the annual statutory financial statements.

However, in seeking a post implementation review, the G100 does not suggest that the adoption of IFRSs is not achieving its original objectives but rather that the reporting impact may not be conducive to producing a set of user-friendly and valuable financial statements and notes.

The G100 would be willing to assist in undertaking a review.

Yours sincerely

Tony Reeves
National President

c.c. John Stanhope and Bruce Brook – FRC members
Susan Howarth – FRC Secretariat