Australian Accounting

Standards
By: Christopher Diaz
History of Australian Accounting Standards

● In 1966 Accounting Standards Board and PSASB working under AARF

● 1984 Establishment of the ASRB under the Council for Companies and Securities

● Companies Act of 1981

● ASRB renamed itself and In 1991 their standards applied to all Corporation Laws

● Merge of the PSASB and the Australian Accounting Standards Board in 2000

● The formation of the Financial Reporting Council in 2001

● In 2005 the Financial Reporting Council and AASB decided to formally adopt many of IFRS

Standards
 Current Australian Accounting Standards

● Current Pronouncements in Australian GAAP

○ Financial Instruments
○ Group Accounts
○ Income Taxes
○ Insurance Contracts
○ Leases and Other small topics
● Current Pronouncements in Australian GAAP non for profit sector
○ Leases
○ Revenue
○ Service Concession Arrangements
○ Other Small Topics
 Scope of Australian GAAP

● Issue Transparent Standards for both for Profit and non-profit Entities

● Make Financial Statements easy to interpret world wide

● More implementation of IFRS

● Ensure Companies and Organizations comply with Accounting Standards

● Change of Australian GAAP with IFRS

Comparison of Australian GAAP and IFRS

Australian GAAP IFRS

● All For-Profit Entities ● All For-Profit Entities

● Tier 1 Reporting ● Tier 1 Reporting

○ Tier 2 Reporting Disclosures ● Financial Statements

● Financial Statements ● Permitted use of only FIFO

● Permitted use of only FIFO ● Income Statement Accounting Policy

● Income Statement Accounting Policy

Comparison of Australian GAAP and US GAAP

Australian GAAP US GAAP

● Financial Statements ● Financial Statements

● FiFO Inventory Method ● FIFO Inventory Method

● Asset and Liability Measurements ● Asset and Liability Measurements

● Depreciation Model ● Depreciation Model

● End Goal For Stakeholders ● End Goal For Stakeholders

Expectation of IFRS in Australia

● SMEs sector not required to use IFRS

● Non-profit entities not all using IFRS

● Reduced disclosure for SMEs

● Has fully adopted in for profit entities

● 2015 IFRS review from Stakeholders

● AASB is considering Full Adoption in the Future

Conclusion

● Main Goal of IFRS and Australian GAAP

● Australia’s move to IFRS

● U.S GAAP and Australian GAAP

● SMEs and non-profit Entities

● The Future of Accounting Standards in Australia

References

Chapple, S. (2018). “IFRS adoption in Australia: A Strong Structuration Perspective.” Accounting

History, vol. 23(3), pgs 265–295.

Xiaojiao (Jo) Wang. (2019). Compliance over time by Australian firms with IFRS disclosure
requirements. Australian Accounting Review, 29(4), 679-691.

Lin, S., Riccardi, W. N., Wang, C., Hopkins, P. E., & Kabureck, G. (2019). Relative effects of IFRS
adoption and IFRS convergence on financial statement comparability. Contemporary Accounting
Research, 36(2), 588-628.

El-Gazzar, S., & Finn, P. M. (2017). Restatements and accounting quality: a comparison between IFRS
and US-GAAP. Journal of Financial Reporting and Accounting, 15(1), 39-58.