Amendments in Australian Accounting Standards

Question: Describe about the Amendments in Australian Accounting Standards. Answer: Formulation of financial statements is done by considering guidelines of IFRS (international financial reporting standards) and AASB (Australian Accounting Standards) is not an easy job. Each year amendments are done in these standards for the purpose of enhancement of relevance and better presentation (Phan, Joshi Mascitelli, 2016). The changes in accounting standards have been described here with the guidance of AASB with a certain important aspect of interim reporting. The effect of change on presentation of financial statements has also been a part of it. Identification of changes and developments In accordance with the guidelines issued by IASB and AASB following standards has been amended between quarters of May-July 2016: AASB/IFRS Name Changes and developments AASB 16 Leases This amendment had made significant changes in lessee accounting requirements and minor modification in lessor accounting (Sugahara Watty, 2016). Further consequential amendments are done in 26 other standards. AASB 107 Disclosure initiative standards As per this modification, the company will require representing changing liabilities taking place through both changes i.e. cash and non-cash flow. The objective of this modification is to portray true financial position. AASB 13 Accounting Standards Fair Value Disclosures of Not-for-Profit Public Sector Entities In this standard depreciated replacement cost is replace by Measure in value in use. The objective of this modification is to ensure presentation of assets at fair value. AASB 10, AASB 124 AASB 1049 Extending Related Party Disclosures to Not-for-Profit Public Sector Entities According to amendments role of State government has been enhanced to ensure that organisation is making proper use of resources without giving undue advantages to the relatives (Chartered accountants Australia, 2016). For this aspect, they are required to provide viable disclosures. Further, comparative disclosures are not required. AASB/IFRS 2 Classification and measurement of share-based transactions. These changes have been done to resolve implementation issues raised by stakeholders. On the basis of proposed changes, companies are required to do accounting for vesting and non-vesting conditions (Pacter, 2016). Further, they are required to give effect to net settlement feature by considering their tax obligations. Along with this, modification in terms should be accounted in the relevant period. Major changes have taken place in above-cited standards. Companies listed on Australian stock Exchange are required to comply these norms for better presentation of financial statement and to ensure accuracy in provided information (El-Firjani Faraj, 2016). Potential sources Amendments to these standards are issued on websites of Financial Reporting Council and AASB. These changes are not directly applicable to the companies as initially it is proposed or directed by these regulatory bodies (Cordery Simpkins, 2016). Notices regarding the application of these standards are issued to Australian Stock exchange and large accounting firms. Professional publications are provided in In the Black (CPA) and Acuity (CAANZ) by citing complete information of the amended standards. In order to assist corporate entities for applicability of modified provisions in financial statements articles are published in newspapers and journals by covering its impact and the necessity for applicability. In this manner, a complete chain is developing for the applicability of accounting standards. According to above report, it could be said that new standards will enhance the relevance of auditors report principally by explaining the main areas of audit relating to the format of presentation of financial statements. References Books and Journals Chartered accountants Australia. (2016). New and amending AASB standards. [Online]. Available through https://www.charteredaccountants.com.au/Industry-Topics/Reporting/Current-issues/Convergence/News-and-updates/New-and-amending-AASB-standards. [Accessed on 23rd August 2016]. Cordery, C. J., Simpkins, K. (2016). Financial reporting standards for the public sector: New Zealand's 21st-century experience. Public Money Management, 36(3), 209-218. El-Firjani, E. R., Faraj, S. M. (2016). International Accounting Standards: Adoption, Implementation and Challenges. Economics and Political Implications of International Financial Reporting Standards, 231. Pacter, P., (2016). Global Accounting Standards-From Vision to Reality.The CPA Journal.84(1). p.6. Phan, D. H. T., Joshi, M., Mascitelli, B. (2016). Are Vietnamese Accounting Academics and Practitioners Ready for International Financial Reporting Standards (IFRS)?. Economics and Political Implications of International Financial Reporting Standards, 27. Sugahara, S., Watty, K. (2016). Global convergence of accounting education: an exploratory study of the perceptions of accounting academics in Australia and Japan. Asian Review of Accounting, 24(3).