Members' Update

1. Year 2005 Strategy

The FRC did not adopt G100 proposals to defer the implementation date for twelve months and announced its in-principle decision to retain the original January 2005 timetable. This decision is subject to the FRC receiving assurance that the set of IASB Standards issued at 31 March 2004 is complete and that corresponding AASB versions of the Standards will be available on the AASB website by 30 June 2004.

This means that any subsequent revisions by the IASB to its ‘stable platform’ at 31 March (for example, proposed changes to the fair value option in respect of financial instruments) will not be included in the AASB equivalents operative from 1 January 2005. If this is the case it is possible that on first-time adoption some companies will not be able to make an unqualified statement of compliance with IASB Standards.

The G100 has written to the FRC expressing concern about its in-principle decision and has reiterated its support for a one-year deferral and proposed that companies be permitted to early-adopt the ‘stable platform’ as a single package. However, the FRC is expected to confirm its in-principle decision at its April meeting.

2. Year 2005 Disclosures

The AASB has issued AASB 1047 ‘Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting Standards’. AASB 1047 (posted on AASB website) applies to interim and annual reporting periods ending on or after 30 June 2004 and requires:

• in respect of 30 June 2004 reports, an explanation of how the transition is being managed and a narrative explanation of key differences in accounting policies that are expected to arise; and
   
• in respect of 30 June 2005 reports, known or reliably estimable information about the impact on the reports had they been prepared using the ‘new’ Standards (or if not known a statement to that effect).

3. Pending Standards

The AASB approved the Australian equivalents to the following IASB Standards for posting on its website:

• AASB 3 Business Combinations
• AASB 127 Consolidation and Separate Financial Statements
• AASB 134 Interim Reporting
• AASB 138 Intangible Assets
• AASB 136 Impairment of Assets

4. Financial Instruments

The IASB issued amendments to IAS 39 ‘Financial Instruments – Recognition and Measurement’ on 31 March 2004 regarding applying fair value hedge accounting for portfolio hedges of interest rate risk. The AASB has amended Pending AASB 139 to incorporate these changes.

The IASB also plans to issue an ED proposing changes to the fair value measurement option in IAS 39 which enables an entity to measure financial instruments at fair value and recognize changes in fair value in the profit and loss. The IASB proposals would limit this option to situations when the fair value is verifiable, including when:

• a financial asset or liability contains one or more embedded derivatives;
• a financial liability whose amount is contractually linked to assets measured at fair value; and
• the exposure to changes in fair value is substantially offset by changes in fair value to another financial asset or likely.

5. Group of 100 Liaison Group

National Executive has initiated a Liaison Group comprising bodies with similar business interests (G100, BCA, AICD, ICAA, CPA) to share views with IASB representatives. At the first meeting (31 March) Sir David Tweedie outlined the IASB’s work program and priorities.

6. CLERP 9

John Stanhope, National President, gave evidence to the Parliamentary Joint Committee on Corporations and Financial Services on the G100 submissions on CLERP 9 on 18 March 2004.

7. CFO Code of Conduct

A summary of the results of the survey of members on the use of the CFO Code of Conduct will be sent to members separately.

Geoff Harris
April 2004

Back to Index

© 1998-2011 Group of 100 Inc. ABN 398 391 246
Email the Group of 100 with questions or comments.