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Frequently asked questions

Q: What is the AASB?

Q: What does the AASB do?

Q: What is an accounting standard and an accounting interpretation?

Q: How does the AASB develop standards and interpretations?

Q: What is the history of the AASB?

Q: What is the difference between AAS and AASB Accounting Standards?

Q: What is the purpose and importance of accounting standards in the corporate world?

Q: What is the relationship between the AASB and the FRC, AUASB, ASIC, APRA, ASX?

Q: What is the relationship between the AASB, the Australian Government and the international standard-setting bodies?

Q: What is an IFRS and how does it affect accounting in Australia?

Q: How does the Australian pronouncement numbering system correlate to the IASB’s numbering system?

Q: Where can I find international accounting standards?

Q: What other accounting standard-setters exist globally?

Q: How does the AASB set standards and interpretations?

Q: How do I submit a comment letter to the AASB?

Q: Where can I find comment letters that have already been submitted?

Q: What are the two types of draft interpretations?

Q: What are Australian Interpretation issues in progress?

Q: What is a proposed Board agenda decision?

Q: How do I request that a topic be added to the AASB's agenda?

Q: What is the best way to keep up-to-date with the activities of the AASB?

Q: How is the AASB structured?

Q: How can I become a member of the Board?

Q: Are AASB meetings open to the public?

Q: Do I have to buy copies of pronouncements?

Q: How are standards amended?

Q: What is a ‘compiled accounting standard’?

Q: How can I find out what amendments have been made to a standard and when those amendments came into force?

Q: What is the Federal Register of Legislative Instruments (FRLI)?

Q: Where can I find a list of the main accounting terms and acronyms used on the AASB website?

Q: Which organisation should I contact to report a suspected breach of an accounting standard? And how should I contact them?

Q: How can I file a complaint about my accountant?

Answers:

Q:
A:

The Australian Accounting Standards Board (AASB) is the Australian Government agency responsible for developing, issuing and maintaining accounting standards that apply under Australian company law. The Board's functions and powers are set out in the Australian Securities and Investments Commission Act 2001.

The vision of the AASB is to be recognised as a global centre of excellence, delivering a truly distinctive contribution to the development of high-quality financial reporting standards.

Q:
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The mission of the AASB is to develop and maintain high-quality financial reporting standards for all sectors of the Australian economy and to contribute to the development of global financial reporting standards.

The major standard-setting objectives of the AASB are to:

1. issue Australian versions of International Accounting Standards Board documents;
2. produce standards that treat like transactions consistently;
3. significantly influence the development of International Financial Reporting Standards;
4. identify areas requiring fundamental review and introduce standards to cover those areas; and
5. promote globally consistent application and interpretation of accounting standards.

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An accounting standard is a technical pronouncement that sets out the required accounting for particular types of transactions and events. The accounting requirements affect the preparation and presentation of an entity’s financial statements.

An accounting interpretation is another type of technical pronouncement that interprets the requirements of standards in application to particular transactions or events. These are usually developed where there has been diversity in the application of the requirements of a standard.

Accounting standards have the force of company law for entities preparing financial reports under that law. Interpretations are also given the force of law since the AASB requires their application through being listed in an enforceable accounting standard (AASB 1048 Interpretation and Application of Standards).

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Click here to see a flowchart of the standard-setting process.

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From 1966, the professional bodies jointly operated the Accountancy Research Foundation, and from 1976 the Australian Accounting Research Foundation (AARF), which ultimately encompassed both the Accounting Standards Board (AcSB) and the Public Sector Accounting Standards Board (PSASB). These Boards worked closely together in preparing standards for private sector and public sector organisations.

At the start of 1984, the Accounting Standards Review Board (ASRB) was established by the Ministerial Council for Companies and Securities to review the standards produced by the profession and give them the force of company law, where approved by the ASRB. This system operated under the Companies Act 1981 (Cwlth) and corresponding State/Territory Codes. The ASRB and the profession’s AcSB merged in 1988, with the ASRB continuing to work closely with the PSASB.

The ASRB was re-established under the Australian Securities Commission Act 1989 and in 1991 was renamed the Australian Accounting Standards Board (AASB). The AASB’s standards then applied under the Corporations Law.

Another restructure was put in place in 2000, with the AASB merging with the PSASB. The new AASB was formally re-established under the Australian Securities and Investments Commission Act 1989 (as it was then re-titled). The regulatory changes also included the establishment of the Financial Reporting Council (FRC) by the Australian Government, to oversee the activities of the AASB. The AASB continues to operate under the Australian Securities and Investments Commission Act 2001.


AASB Framework
CAC Act  -  From 1 July 2000 to 30 June 2008
FMA Act – From 1 July 2008 to 30 June 2014
PGPA Act – From 1 July 2014 to Present

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AAS Standards
The original series of Australian Accounting Standards (AASs) was issued by the Australian Accounting Research Foundation (AARF) on behalf of the professional accounting bodies prior to 2000.  Most AASs were superseded by AASB Accounting Standards for reporting periods beginning on or after 1 January 2005.

As at 1 July 2009, only AAS 25 Financial Reporting by Superannuation Plans was still operative.  ED 223 (issued in December 2011) proposes requirements that would replace AAS 25 with a new AASB standard.

ASRB
The Accounting Standards Review Board (ASRB) was established in 1984 to review AAS Standards and, if appropriate, to then issue them as ASRB Standards to give legislative power to them under the Corporations Law.  Standards issued by the ASRB up to 1991 were labelled ASRB Approved Accounting Standards.

In 1991, the ASRB was renamed the Australian Accounting Standards Board (AASB) and all ASRB Standards were re-labelled as AASB Accounting Standards through AASB 1025 Application of the Reporting Entity Concept and Other Amendments.

AASB Accounting Standards
Since 1991, all standards issued by the AASB have been labelled AASB Accounting Standards.

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General purpose financial statements that comply with accounting standards should present fairly the financial position, financial performance and cash flows of an organisation. This information will be useful to owners, investors, creditors, analysts, employees, regulators and others in making and evaluating decisions about the allocation of scarce economic resources.

When corporations and other organisations comply with accounting standards, their general purpose financial statements should be more comparable than they would otherwise be. This allows investors and other users of the financial statements to better compare the organisations.

Financial statements also provide one means by which the management and governing body of an organisation are accountable to those who provide resources to the organisation. The provision of information for accountability purposes is a particularly important aspect of financial reporting by public sector organisations and not-for-profit entities in the private sector.

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The FRC provides broad oversight of the process for setting accounting standards in Australia. The FRC appoints the members of the AASB, other than the Chairman, and can issue broad strategic directions to the AASB. However, the Australian Securities and Investments Commission Act 2001 limits the FRC’s ability to become involved in the technical deliberations of the AASB.

Like the AASB, the Auditing and Assurance Standards Board (AUASB) also operates under the Australian Securities and Investments Commission Act 2001 and is subject to oversight by the Financial Reporting Council. The AUASB develops auditing standards that apply under Australian company law. There is no direct relationship between the AASB and the AUASB, other than sharing offices and facilities.

The Australian Securities and Investments Commission (ASIC) is responsible for the enforcement of the accounting standards issued by the AASB under the Corporations Act 2001. ASIC has the power to issue class orders, or specific orders to a company, to give relief from certain requirements of the Act, including the application of AASB standards, where it is satisfied that the statutory requirements for relief are met. ASIC may refer significant issues that it sees in practice to the AASB for consideration.

The Australian Prudential Regulation Authority (APRA) is responsible for the regulation of banks, insurers and other authorised deposit-taking institutions. APRA considers the compliance of entities with AASB accounting standards as part of its oversight processes.

The Australian Stock Exchange (ASX) provides facilities for the listing and transfer of equities of listed public companies. The ASX expects listed entities to produce comparable general purpose financial statements in accordance with AASB accounting standards.

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The AASB is an Australian Government agency, reporting to the Parliamentary Secretary to the Treasurer. The AASB’s principal funding is via parliamentary appropriation under the Australian Treasury portfolio. Significant funding is also received from the States and Territories.

The International Accounting Standards Board (IASB) is part of the IFRS Foundation and is an independent private-sector organisation based in London. The Australian Government provides a significant annual monetary contribution to the activities of the IASB.

The IASB is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements. In pursuit of this objective, the IASB co-operates with national accounting standard-setters (like the AASB) to achieve convergence in accounting standards around the world.

The International Public Sector Accounting Standards Board (IPSASB) is a board of the International Federation of Accountants (IFAC). IFAC is funded principally by its members, which are professional accounting bodies from around the world. Those bodies may propose nominations for membership of the IPSASB and other boards of IFAC.

The IPSASB focuses on the accounting and financial reporting needs of national, regional and local governments, related governmental agencies, and the constituencies they serve. It addresses these needs by issuing and promoting benchmark guidance and facilitating the exchange of information among accountants and those who work in the public sector or rely on its work. The AASB considers the work of the IPSASB in developing and issuing accounting standards for public sector entities in Australia.

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“IFRSs” is the collective term used to describe the authoritative pronouncements issued by the IASB. Technically, IFRSs comprise:

1. two series of standards: those explicitly called International Financial Reporting Standards and the older series of International Accounting Standards, and
2. two series of Interpretations: those issued by the former Standing Interpretations Committee (SIC) and those issued by the existing International Financial Reporting Interpretations Committee (IFRIC) of the IASB.

Under a broad strategic direction from the FRC, the AASB has adopted IFRSs for application by entities reporting under the Corporations Act 2001 for annual reporting periods beginning on or after 1 January 2005. This is to ensure that general purpose financial statements, prepared by for-profit entities in accordance with AASB standards, will also be in accordance with IFRSs.

The AASB has a transaction neutrality policy, which means similar transactions and events should be accounted for in a similar manner by all types of entities, whether in the for-profit sector, the not-for-profit private sector, or the public sector – unless there is a sound reason to be different in particular circumstances. The AASB considers the specific needs of not-for-profit entities in the private and public sectors when preparing new and revised IFRSs for adoption in Australia.

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Australian Pronouncements Corresponding IASB Pronouncements
AASB Standards  
      numbered from 1 International Financial Reporting Standards (IFRSs)
      numbered from 101 International Accounting Standards (IASs)
      numbered from 1001 no equivalent
AASB/UIG Interpretations  
      numbered from 1 IFRIC Interpretations
      numbered from 101 Standing Interpretations Committee (SIC) Interpretations
      numbered from 1001 no equivalent
Q:
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All of the pronouncements issued by the International Accounting Standards Board (IASB) can be accessed on the IASB’s website if you have a paid subscription with the IASB. Further information can be obtained from the IASB at www.iasb.org.

All of the pronouncements issued by the IPSASB can be accessed free of charge on the IPSASB website, http://www.ifac.org/PublicSector

Australian Accounting Standards may be downloaded from the AASB website free of charge.

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Besides the International Accounting Standards Board (IASB) and the International Public Sector Accounting Standards Board (IPSASB), many countries have national accounting standard-setters. For example, to name just a few: Canada, China, France, Germany, Hong Kong, Japan, Korea, Latvia, Lebanon, Malaysia, New Zealand, Nigeria, Singapore, South Africa, Sri Lanka, Sweden, the United Kingdom and the United States of America.

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The AASB adopts a comprehensive due process to develop pronouncements. It encourages preparers, auditors and users of financial statements to participate in the process, as detailed below. The AASB’s standard-setting process is summarised in a diagram on the website.

The due process adopted by the AASB may include the following steps:

1. communicating its views and proposals to a broad range of interested parties via media releases, alerts, publications and other items on its website;
2. inviting public comment on proposed pronouncements via exposure drafts, invitations to comment, proposed interpretations and other open-for-comment documents;
3. meeting with interested parties, including holding roundtable discussions and meeting with its Consultative Group;
4. publishing selected Board papers and discussing technical issues in Board meetings that are open to public observation;
5. publishing Action Alerts following Board meetings and minutes of Board meetings.

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Visit the AASB open for comment page and use the link there to submit your letter on a specific document; OR

Email your submission / comment letter to standard@aasb.gov.au; OR

Mail your submission / comment letter to:
Submissions
Australian Accounting Standards Board
P.O. Box 204
Collins Street West VIC 8007
Australia

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Comment letters and submissions can be found in the Work in Progress section of the website. Some will be located via draft documents that are no longer open for comment but have not yet been superseded by final pronouncements (see the Pending section) and others will be with archived draft documents (see the Archive section).

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1. Draft IFRIC Interpretations
These are draft Interpretations issued by the IFRS Interpretations Committee (IFRIC) of the IASB as part of its due process to obtain feedback from constituents on proposed IFRIC Interpretations. A draft Interpretation is like an exposure draft of a proposed standard.

As the AASB issues Australian equivalents of IFRIC Interpretations for application in Australia, the AASB also issues the draft IFRIC Interpretations to obtain feedback from constituents. Typically, the AASB publishes the draft IFRIC Interpretation on its website without Australianising it. The AASB requests comments from constituents in advance of the date by which submissions are due to the IFRIC. The comments from Australian constituents are then considered by the AASB in finalising its own submission to the IFRIC on the draft IFRIC Interpretation.

2. Proposed AASB Interpretations
These are draft Interpretations issued by the AASB as part of its due process to obtain feedback from constituents on proposed domestic Interpretations. The comments from Australian constituents are then considered by the AASB in deciding whether to issue a local Interpretation (which would be numbered in the 1000 series) and what to include in it. These Interpretations do not correspond to international Interpretations.

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The Australian Interpretation issues in progress is a list of all interpretation issues currently being considered by the AASB. The issues in progress include topics on the IFRIC's agenda as well as any additional domestic interpretation issues. The list gives more information about interpretation issues in progress than the overall AASB work program, which is provided separately on the website.

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In addressing issues for which the AASB may have considered issuing a local Interpretation, the AASB normally will publish on the website a proposed agenda decision to seek comments from constituents where it does not propose to develop an Interpretation. The AASB usually will indicate the rationale for the proposal.

If the AASB confirms its proposal not to develop an Interpretation, it will then issue a formal Board agenda decision. These are also known as “agenda rejection statements” or “items not taken onto the agenda”.

If the AASB instead decides to add the issue to its agenda, then a formal Board agenda decision is not published. The decision will be reported in the minutes of the meeting and the issue subsequently will appear in the Board work program or the list of Australian Interpretation issues in progress.

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Requests from constituents for the AASB to address new issues or to interpret, review or amend existing pronouncements are considered by the AASB from time to time as potential agenda items.

To submit a request, please email it to standard@aasb.gov.au or send it by post to:
    The Chairman
    Australian Accounting Standards Board
    P.O. Box 204
    Collins Street West VIC 8007
    Australia

 

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Check the News section of the website for information about the work of the AASB as it happens.

Review the current AASB work program, which identifies the projects currently being undertaken and their progress.

See the meeting calendar for dates of upcoming meetings.

Subscribe to the AASB Website Update Notification Service, a free electronic service that alerts you to new documents as they are added to the AASB website. You will also receive the AASB eNewsletter, Transparency, issued quarterly.

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The AASB is an independent agency of the Australian Government. The Chairman is appointed by the Treasurer and Board members are appointed by the Financial Reporting Council.

For further details, see the AASB organisational structure diagram.

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Applications for appointment as a Board member are invited periodically by the Financial Reporting Council (FRC) and assessed by the FRC’s Nominations Committee.

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Meetings of the AASB, roundtable meetings and meetings with the AASB Consultative Group are normally open for public observation; observers do not participate in the discussions.

To register as an observer for a meeting, please follow the given instructions.

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The AASB is a not-for-profit organisation. We sell printed copies of standards and other publications to help fund the printing costs. However, most of the AASB’s publications are freely available on the AASB website. All authoritative pronouncements, including accounting standards and compilations of accounting standards, may be downloaded from the AASB website free of charge.

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Amendments are made to standards either by re-issuing a standard in its entirety or by issuing an amending standard to identify the amendments being made to another standard or standards. When amendments are made via an amending standard, a compiled version of the each amended standard is subsequently issued to update it for the changes

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A compiled accounting standard (or compilation) is a representation of the principal standard as at a particular date (the compilation date). The compiled standard incorporates all the amendments that have been made to it from the date the original standard was first made up to and including the compilation date.

Each compiled standard includes details on the compilation: the standards included in the compilation, the provisions affected, the date of the most recent amending standard and commencement dates for amendments. The date the compilation was prepared is also given. The compiled version of a standard does not include the preface or most of the peripheral material published with the original standard when it was first issued.

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Each compiled version of a standard identifies the amendments made and when they apply. The amendment history for a standard is shown in the compilation details following the contents page. This includes:

- a Table of Standards, providing the number of each standard included in the
  compilation together with commencement details and other relevant information
  for each amendment;     and
- a Table of Amendments, providing the amendment history for each provision of
  the standard that has been amended.

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The FRLI is a database of legislative instruments maintained by the Commonwealth Attorney-General's Department in Canberra. It contains regulations and rules of court as well as a number of other instruments. Original and compiled AASB standards made after 1 January 2005 are registered on the FRLI database and able to be downloaded from there (http://www.frli.gov.au). Registration on FRLI replaced the earlier system of gazettal for legislative instruments.

The FRLI database is part of the new legislative repository developed by the Attorney-General's Department. The system, known as ComLaw, contains:

Commonwealth primary legislation, as well as other ancillary documents and information, in electronic form; and

the Federal Register of Legislative Instruments (FRLI), which was established on 1 January 2005 under the Legislative Instruments Act 2003 as the authoritative source for legislative instruments and compilations of legislative instruments.

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A list of terms defined in pronouncements is available from the AASB Glossary page.

A list of acronyms is included on the Links and Acronyms page.

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The Australian Securities and Investments Commission (ASIC) is responsible for the enforcement of the accounting standards issued by the AASB under the Corporations Act 2001. ASIC has the power to issue class orders, or specific orders to a company, to give relief from certain requirements of the Act, including the application of AASB standards, where it is satisfied that the statutory requirements for relief are met. ASIC may refer significant issues that it sees in practice to the AASB for consideration.

To file a complaint to ASIC about a company or person, visit the ASIC website.

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As an accounting standard-setter, the AASB is not responsible for the professional conduct of accountants. The relevant sections of the professional accounting body websites provide information about the process by which you can file a complaint against an accountant who is a member of the relevant organisation.

CPA Australia (CPAA)

Institute of Chartered Accountants in Australia (ICAA)

Institute of Public Accountants (IPA)