Understand The Accounting Standard Setting Process in Australia

AASB standard setting process starts with the identifying the technical issue. The technical issue can be identified by international organisations (including the International Accounting Standards Board (IASB), IFRS Interpretations Committee and International Public Sector Accounting Standards Board (IPSASB), the Australian Accounting Standard Board (AASB) itself and the Australian organisation/individual. AASB will develop a project proposal on the technical issue identified. The decision whether to place the issue to its agenda is based on the assessment of the project. Some considerations involved include the benefit and cost consideration (which is cost of not undertaking it), availability of resources and likely timing. Discussion on the agenda papers is then developed and presented by AASB on the research and consider issue stage. The agenda papers consider relevant material from other standard setters and address the scope of issue, alternative approaches, and timing of outputs. On the consultation with stakeholders stage, the AASB involves various stakeholders to make comment and discussion via one of the following document : - Exposure Drafts (EDs) is a draft of a proposed (or amendment) standard. - Invitations to Comment (ITCs) aim to seek feedback on broad proposals. - Draft Interpretations is a draft of a proposed interpretation of a standard. - Discussion Papers (DPs) outline wide range of possible accounting policies on the issue. - Roundtable discussions are the formal discussions for the proposals issued for comment with a range of stakeholders. - Focus Groups consist of two groups, the User Focus Group and the Not-For-Profit Focus Group. The - User Focus Group represents the financial statement users and NFP Focus Group comprises representative of NFP sector. - Project Advisory Panels provides advises and comments the agenda papers and this group members are the expertise in that topic. - Interpretation Advisory Panels comprise preparers, users, auditors and regulators to preparing alternative views on an issue and recommendations for consideration by the AASB. The document issued for comment will be formally submitted to the IASB an IPSASB to achieve the objective of high-quality international accounting standards. The issuance of a pronouncement may include a standard, an interpretation, or a conceptual framework document. The pronouncement to be applied to for-profit entities will be made consistent with International Financial Reporting Standards (IFRSs). One of the main role of AASB is placed at the final stage of the standard setting process, which is implementation and compliance of accounting standards and interpretations in Australia. If the standards are deemed to be inappropriate to be implemented in Australia, AASB will lead the revision or submission to propose changes to IASB or IPSASB.