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Sep 04, 2023 / News
Beyond the Numbers - Edition 8
Welcome to Beyond The Numbers, our monthly newsletter which brings you a summary of the latest developments from local and international standard setters and regulators.
Click on one of the Newsletter sections below:
AASB considers Sustainability Reporting
The Australian Accounting Standards Board (AASB) met on 8 August 2023 when it predominantly addressed the development of its exposure drafts on sustainability reporting. In developing Australian equivalents of IFRS S1 and IFRS S2, the Board made key decisions:
- IFRS Sustainability Disclosure Standard IFRS S1 – the Board agreed to focus only on climate-related financial disclosures and will develop a limited-scope Australian equivalent to IFRS S1 addressing general requirements for climate-related financial disclosures only.
- Development of Sustainability Standards Non-authoritative Guidance – The Board decided that it will use feedback from the forthcoming exposure draft to identify what aspects of the Australian equivalent climate-related disclosure requirements need additional guidance to support implementation.
- Consequently, the Board decided to defer work on developing Australian equivalent guidance until after the Australian equivalent standards and requirements have been issued.
- Approach to SASB Standards and Industry-based Guidance – the Board maintained its preliminary decision to remove references to SASB and not publish industry-based guidance until further work had been performed by the ISSB and AASB.
- Not-for-Profit Entity considerations – the Board decided to support the application of climate-related financial disclosure requirements for not-for-profit (NFP) entities in the private and public sectors in Australia and outlined its views on the modification and clarification of terms to suit the NFP environment.
Post-implementation review of AASB 15 Revenue from Contracts with Customers
The AASB has released a post-implementation review of AASB 15 seeking feedback on the following matters, amongst others:
a. Stakeholders’ overall views and experiences relating to AASB 15; and
b. Information on specific areas of AASB 15, such as:
- Identifying performance obligations in a contract;
- Determining the transaction price;
- Determining when to recognise revenue;
- Principal versus agent considerations;
- Licensing;
- Disclosure requirements; and
- Transition requirements.
The AASB is not seeking feedback on not-for-profit specific matters.
Comments are due to the AASB by 8 September or can be made to the IASB by 27 October 2023.
Read More >>
ATO and CA ANZ address GST fraud
Chartered Accountants Australia and New Zealand (CA ANZ) has highlighted the Australian Taxation Office’s (ATO) actions against GST fraud under Operation Protego. Operation Protego targeted fraudulent claims for GST refunds flowing from successful applications for ABNs, then lodgement of activity statements falsely claiming input tax credits.
CA ANZ and the ATO expects that any tax or BAS agent that becomes aware of a client that has participated in fraud to notify the ATO immediately.
Read More >>
ASX compliance update
In the latest edition from ASX contains the following updates and reminders for listed companies:
- Half yearly, preliminary final and change of balance date announcements: order of announcements and early release of announcements during reporting periods;
- Allow enough time for ASX to review your draft notice of AGM;
- Annual listing fees FY2024 reminder;
- Security purchase plan waivers;
- Reminder: Appendix 7A Timetables;
- Emails circulating regarding membership or maintenance of an entity’s ISIN; and
- Upcoming deadlines for periodic reports.
Review of the Modern Slavery Act 2018
The report from the three-year statutory review of the Modern Slavery Act 2018 was tabled in Federal Parliament and included 30 recommendations to Government.
Large businesses and other entities in the Australian market with annual consolidated revenue of at least AUD$100 million are required to lodge their modern slavery statement within six months after the end of the financial year.
The report recommendations included lowering the consolidated revenue threshold from $100 million to $50 million, the introduction of a Commonwealth Anti-slavery Commissioner, and the introduction of civil penalties for non-compliance.
ASIC extends transitional relief for foreign financial services providers
ASIC Corporations (Amendment) Instrument 2023/588 extends the transitional relief for foreign financial services providers (FFSPs) from the requirement to hold an Australian financial services (AFS) licence when providing financial services to Australian wholesale clients. The relief has been extended from 31 March 2024 to 31 March 2025.
The relief instrument also delays the commencement of ASIC’s licensing relief to some FFSPs that provide funds management financial services to certain categories of Australian professional investors (ASIC Corporations (Foreign Financial Services Providers - Funds Management Financial Services) Instrument 2020/199) to 1 April 2025.
Read More >>
NSW Treasury | Guidance on the impact of the delayed 2023-24 NSW State Budget on the consideration of going concern
According to NSW Treasury, the postponement of the 2023-24 Budget and Appropriation funding alone does not impact an agency's ability to operate as a going concern. This assessment stems from the Treasurer's authority to allocate funds (up to 25% of the 2022-23 appropriation amount adjusted for inflation) from the Consolidated Fund to fulfill obligations under section 4.10 of the Government Sector Finance Act 2018 during the annual reporting period.
Treasury guidance includes a suggested form of words to include in agencies’ financial statements.
Competency requirements for SMSF auditors
Earlier this year, ASIC proposed to allow Class Order (CO 12/1687) Competency Standards for Approved SMSF Auditors to sunset on 1 April 2023. ASIC has now repealed the Class Order on the basis it has continuously been succeeded by standards issued by the AUASB, APESB, and various ASIC regulations and registration process for becoming an Approved SMSF Auditor.
Following this repeal, Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia and the Institute of Public Accountants (IPA) (“the Joint Accounting Bodies”) have recently withdrawn the Competency Requirements for Auditors of Self-Managed Superannuation Funds to eliminate any duplication and simplify the SMSF auditor competency framework.
International Accounting Standards Board (IASB) update – August 2023
The summary of the IASB meeting held on August 2023 has been released. Topics discussed relate to the Amendments to the IFRS for SMEs Accounting Standard – International Tax Reform – Pillar Two Model Rules.
The IASB tentatively decided to have a mandatory temporary exception that will be applicable for an indefinite period of time. The temporary exception allows an SME to not recognise deferred tax assets and liabilities or disclose information that would otherwise be required about deferred tax assets and liabilities related to Pillar Two income taxes. Qualified SMEs are required to disclose its retrospective application of this exception.
The IASB also made a tentative decision to finalise the proposals made in the Exposure Draft. This includes clarification of the definition of ‘other events’ in the disclosure objective, the requirement to separately disclose an entity’s current tax expense or income related to Pillar Two income taxes, and a proposal not to introduce new disclosure requirements that would apply in reporting periods when Pillar Two legislation is enacted or substantively enacted but not yet in effect.
The IASB expects to issue the amendments in September 2023.
IASB’s tentative decisions on the Equity Method project
In July 2023, the IASB tentatively decided to propose amendments to IAS 28 Investment in Associates and Joint Ventures, which would affect decisions regarding potential impairment of associates and joint ventures by:
- Comparing the fair value of an investment to its carrying amount rather than cost, and the removal of the phrase ‘significant or prolonged’ decline in fair value; and
- To add as objective evidence of impairment where the purchase price an investor pays for an additional interest in an associate, or a selling price for an interest, is lower than the carrying amount of the investment in the associate.
An exposure draft amending IAS 28 is expected this year.
IASB issued Lack of Exchangeability (Amendments to IAS 21)
The IASB has issued Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates). The amending standard adds requirements to IAS 21 for an entity to determine whether a currency is exchangeable into another currency and, if it is not exchangeable, the exchange rate that must be used.
The amendments apply for annual reporting periods beginning on or after 1 January 2025. Earlier application is permitted.
New Zealand to introduce Modern Slavery legislation
The New Zealand Government announced its intention to introduce modern slavery reporting legislation that will require organisations and businesses to be transparent about their operations and supply chains through a new public register.
Organisations with over NZ$20 million in revenue will be required to report and outline the actions they take to address exploitation risks in their operations and supply chains.
Legislation is expected to take around six months to draft but may be impacted by the NZ general election in October.
July 2023 ISSB podcast now available
ISSB Vice-Chair Sue Lloyd and ISSB Chair Emmanuel Faber discuss the latest developments from the board, including:
- Progress since the launch of IFRS S1 and IFRS S2;
- The development of technical updates and educational materials on IFRS S2; and
- The upcoming International Auditing and Assurance Standards Board (IAASB) consultation on assurance of climate disclosures.
CA ANZ issues essential reporting guides for June 2023
The CA ANZ Reporting Essentials Guides for June 2023 are now available. These publications highlight the impact of new and amending standards and legislative developments on the preparation of financial statements, performance reports and other external reporting. Other areas covered include:
- Financial reporting in uncertain times;
- Sustainability reporting;
- Regulator focus areas; and
- The Australian financial reporting framework reform.
The reporting guide is available for CA ANZ members.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.
