Applying IFRS and AIFRS in Australia

"It’s not only the international standards themselves that are changing, but also the
standard-setting arrangements here in Australia."

An IFRS update for Australian companies

There’s been a sense of frustration that Australian companies have to look to four sources for guidance on International Financial Reporting Standards (IFRS). In the last 12 months, Australian pronouncements have emerged from the International Accounting Standards Board, the International Financial Reporting Interpretations Committee, and locally, the Australian Accounting Standards Board (AASB) and the Urgent Issues Group (UIG).

However, there is now some good news to share on this front. The AASB has decided that in future it won’t add requirements or guidance to the international standards unless it’s necessary to deal with a public sector or not-for-profit issue. This is welcome news for Australian private sector entities, as it will be clear that IFRS and the Australian equivalents will be the same. The AASB is currently implementing this policy for standards that have already been issued, and has also committed to removing all additional Australian specific guidance.

Other good news is that there will only be three rather than four bodies to monitor going forward, as the UIG will be disbanded from 1 July 2006. Australian companies will rely on the International Financial Reporting Interpretations Committee to develop interpretations of standards, which will be endorsed by the AASB for use here. The AASB will still be able to issue other Australian specific interpretations and guidance, however we expect these unique domestic interpretations to occur only in rare circumstances.
For more of the latest news on IFRS and AIFRS, please visit the publications pages using the links on the left hand side.