Accounting standard changes
For those entities with a 31 December 2016 year end a number of amending accounting standards will be applicable for the first time.
These include:
- AASB 2014-3 Accounting for Acquisitions of Interests in Joint Operations – Amendments to AASB 11
- AASB 2014-4 Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to AASB 116 and AASB 138)
- AASB 2014-6 Agriculture: Bearer Plants (Amendments to AASB 116 and AASB 141)
- AASB 2014-9 Equity Method in Separate Financial Statements (Amendments to AASB 127)
- AASB 2015-1 Annual Improvements to Australian Accounting Standards 2012- 2014
- AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
- AASB 2015-5 Amendments to Australian Accounting Standards – Investment Entities: Applying the Consolidation Exception
We previously discussed these changes during our 2016 Financial Reporting Update seminars, a recording of which you can view on our website. It pleases me to say that these amendments should not have any substantial effect on the majority of our clients.
In this article, I discussed the AASB’s income of not-for-profit entities project and some of the key areas that are likely to change under the new income recognition model. The AASB has now issued the new standards AASB 1058 Income of Notfor- profit Entities and AASB 2016-8 Australian Implementation Guidance for Not-for-Profit Entities. If you missed our live webinar on 25th October, you can view the recording on our website. The AASB incorporated some minor amendments to the final standard since our webinar and we will shortly issue a publication to incorporate those changes. In the meantime, the standards are available on the AASB website. The new standards won’t be mandatorily applicable until 1 January 2019.
Regulator activities
Recent changes to Collections for Charitable Purposes Act 1939 (SA) mean reduced administrative burden on charities fundraising in South Australia who are also registered with the Australian Charities and Notfor- Profits Commission (ACNC). After the 2015/2016 financial year, South Australian Charitable Purposes (CCP) licence holders who register with the ACNC will only have to report financial information once to the ACNC. Going forward, those fundraising entities will no longer need to renew their licence each year within South Australia, as long as they continue to be registered with the ACNC and meet their reporting requirements. CPP licence holders can choose not to register with the ACNC and remain licensed with Consumer and Business Services SA (CBS), but that may limit access to tax concessions and other benefits. To find our more, visit CBS SA or the ACNC websites.
What will 2017 bring?
We expect that 2017 will be a busy year as clients turn their attention to developing implementation plans and undertaking impact assessments of the new financial instruments (AASB 9), revenue (AASB 15 and AASB 1058) and leases (AASB 16) accounting standards. Meanwhile the AASB is also expected to redeliberate a new reporting service performance information standard for not-for-profit entities.
Finally, the AASB continues to express concern at the degree of subjectivity involved in applying the reporting entity concept which they believe has resulted in some entities that should prepare GPFSs being treated as non-reporting entities and preparing only SPFSs. At the recent AASB Research Forum held in Sydney there was interesting and vigorous discussion of the role of the reporting entity concept, special purpose financial statements, and the appropriate accounting frameworks for not-for-profit and public sector entities. Although we don’t expect an imminent change to the current reporting framework, we wouldn’t be surprised to see the AASB take a further step during 2017 towards their goal of abandoning special purpose financial statements.
How can Nexia Edwards Marshall NT help you?
To find out how we can assist you in preparing for 31 December reporting, please contact Noel Clifford or your Nexia Edwards Marshall NT Advisor.
