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Annual Regulatory Plan

Government agencies or departments that are responsible for regulatory changes are required to publish an Annual Regulatory Plan on their website early in each financial year.  A regulatory plan is a document that tells business operators, business representatives, other stakeholders and the public about regulatory changes that a government agency or department has made in the past financial year, and plans to make in the next financial year.

Context to the AASB’s Annual Regulatory Plans

The AASB’s planned ARPs include projects expected to result in Standards in the next year or so and that impact on business – it does not include other projects that:

  1. are expected to result in Standards further into the future and may impact on business; or 
  2. are only expected to impact on the public sector or the non-commercial activities of not-for-profit entities. 

It is generally accepted that there are net benefits to the economy of high-quality financial reporting requirements. Most of the direct costs of new financial reporting requirements are usually borne by preparers of general purpose financial reports and most of the direct benefits are usually received by users of general purpose financial reports.

The AASB’s current thinking is based on looking past purely technical issues to likely costs and benefits to preparers, users and others (such as auditors and regulators). Accordingly, although a particular change to financial reporting requirements may be substantive in terms of its underlying changes to technical thinking, the likely changes to preparation costs and financial reporting outcomes may not be substantive. 

Main sources of AASB Standards 

In its Standards applicable to commercial activities, the AASB adopts International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB). The benefits of adopting any particular IFRS include the benefits of overall IFRS compliance. Put another way, the costs of not adopting any particular IFRS include the costs of Australia losing the credibility that comes with being an IFRS-compliant jurisdiction. Accordingly, the benefits of remaining IFRS compliant are a pervasive factor in any cost-benefit assessment of new and revised AASB standards as they apply to commercial activities.