Members' Update

National Executive

The following new members were elected to National Executive:

Accounting Standards

Removing Australian Differences from IFRS

The AASB has issued ED 151 ‘Australian Additions to, and Deletions from, IFRSs’ and comments are required by 31 January 2007 (www.aasb.gov.au).

The ED 151 proposals are consistent with the G100’s view that all the options included in IFRSs should also be included in their Australian equivalents. For example, reinstating the option in AASB 131 ‘Joint Ventures’ permitting the use of proportional consolidation for joint venture entities.

The AASB intends that the amended standards will be operative for annual reporting periods commencing 1 July 2007 with early adoption permitted.

Interpretations

National Executive agreed to seek feedback from members on examples of interpretation issues which have arisen on the implementation of Australian equivalents to IFRSs with a view to developing a listing of significant issues to raise with regulators including standard-setters.

Fair Value Measurements

The IASB has issued a discussion paper dealing with fair value measurements (www.iasb.org). The discussion paper is based on SFAS 157 ‘Fair Value Measurements’ with comments required by 2 April 2007.

Submissions

Recent G100 submissions are posted on the website.

Corporate and Financial Services Regulation Review

Proposals have been released by Chris Pearce, Parliamentary Secretary to the Treasurer. Proposals relating to reporting obligations include:

• streamlining director and executive remuneration disclosures for listed companies by removing duplication between the requirements of the Corporations Act and the added Australian requirements of AASB 124 ‘Related Party Disclosures’. Under the proposals the Australian requirements added to AASB 124 would not apply to listed entities;
• adopting the accounting definition of ‘key management personnel’;
• the remuneration report of disclosing entities will be audited;
• the inclusion of a new requirements requiring disclosure of policy on executive and directors hedging exposures to options and shares granted as part of remuneration packages; and
• electronic distribution of annual reports.

The paper does not contain any proposals to reform requirements for parent entity financial statements because the consultation process did not identify that the costs outweighed the existing benefits to users.

[Note: Members are requested to provide the Secretariat with information on costs of lodging parent entity reports to support a further submission seeking relief from lodging parent entity financial statements].

ASX Corporate Governance Council (CGC)

The CGC has issued a consultation paper (see www.asx.com.au) seeking comment on proposals arising from a review of its recommendations. Perhaps the most significant aspect is that the CGC is seeking comment on whether it should develop specific requirements on sustainability/corporate responsibility risk reporting and the manner of reporting. The significant questions relate to:

• whether specifying requirements for sustainability/corporate responsibility risks is within the remit of CGC; and
   
• if so, whether the CGC should:
  • provide additional voluntary guidance with no additional reporting requirements; or
  • introduce an additional ‘if not, why not?’ reporting requirement involving additional reporting obligations.

Submissions are due by 9 February 2007 and it is expected that the revised Guidelines will apply from 1 July 2007.

The G100 position on sustainability reporting is that mandatory and specific requirements are not appropriate at this stage and that the form and content of reporting on these issues is best left to the directors to determine in the light of the activities of the company.

Members are encouraged to make a submission to the CGC on this issue in particular.

An outline of the G100’s position will be sent to members early in 2007.

G100/IASB Liaison Group

The Group will meet with IASB members and staff on 20 December in Melbourne. Items for discussion include the status of the IASB/FASB convergence project, the IASB work program and the interpretations process.

Thin Capitalisation

Treasury has requested comment on proposals relating to the impact of adoption of IFRSs on the taxation thin capitalisation provisions. A copy of the G100 submission is posted on the website.

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