Reduced compliance costs expected for 30 June 2010 financial statements

Recent initiatives by both the Federal Government and the Australian Accounting Standards Board (AASB) are designed to make the production of 30 June 2010 financial statements a simpler and less costly process for some entities. However it will be a very much watch this space, as both initiatives are time sensitive!

Firstly, the Corporate Reporting Reform Bill (which we mentioned in February 2010’s Summit newsletter) proposed the removal of parent company financial statements where consolidated financial statements are prepared.

Also of interest for limited by guarantee companies are the Government’s  proposals to exempt them from Corporations Act financial statements if their annual revenues are less than $250,000 and they do not have deductible gift recipient status. Companies limited by guarantee whose revenues are under $1,000,000 will have a choice of a simpler and cheaper audit review rather than a full audit.

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Secondly, the AASB hopes to have its ED 192 Reduced Disclosures Regime (RDR) in place for early adoption by non-listed reporting entities by 30 June 2010. It is believed that there will be up to a 50% reduction in disclosure requirements compared to the normal full IFRS disclosures. Sadly, the AASB does not plan to have the IFRS for SMEs accounting standard that is specifically designed for the non–listed market in place. This standard has only half the disclosure requirements of the AASB’s proposed RDR model, but more importantly is a much simpler and less costly process to maintain recognition and measurement requirements.

For further details click here.

Hot disclosure and accounting issues for 2010
Grant Thornton’s IFRS Top 20 Tracker – 2010 edition contains the major IFRS/AASB accounting issues that Grant Thornton member firms globally have identified for the 2010 reporting season. In particular, the aftermath and on-going impact of the global financial crisis (GFC) continues to create challenges with going concern issues, asset impairment re-assessments, tightened credit, and borrowing covenant compliance. In addition, the corporate regulators are having a closer look at accounting standards compliance with a particular focus on the new and revised accounting standards applying for June 2010 balancers (AASB 1 Presentation of Financial Statements, AASB 8 Operating Segments, and AASB 123 Borrowing Costs).

A copy of the Top 20 Tracker is available by clicking here.

For more information on the 30 June financial statements, contact your usual Grant Thornton advisor or the author of this article.

Author, Keith Reilly, April 2010

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