Australian Government Welcomes Changes To Accounting Standards
Senator Nick Sherry, Minister for Superannuation and Corporate Law, has welcomed
the prompt decision of the Australian Accounting Standards Board (AASB) to amend
Australian accounting standards to ensure they remain consistent with new standards
issued by the International Accounting Standards Board (IASB).
“The global financial crisis has led to concerns about the classification
of certain types of financial assets under International Financial Reporting
Standards compared to US Generally Accepted Accounting Principles. The changes
will allow a financial entity to reclassify selected stressed financial assets
in line with international accounting practice," said Sherry. “Consistent, well-formulated accounting standards provide accurate and
useful information to participants in capital markets and promote market integrity,
transparency and investor confidence,” he added. In mid-October, the IASB changed the rules to allow entities to choose to reclassify
some financial instruments from a fair value measurement basis, also known as
mark-to-market, to a cost basis in certain circumstances. The IASB’s and AASB’s response forms part of a coordinated approach
by global standard setters to address financial reporting challenges associated
with the credit crisis. Internationally, this work is supported by the International
Organisation of Securities Commissions and domestically by the Australian Financial
Reporting Council. The IASB approach is now similar to the approach taken by the US Financial
Accounting Standards Board (FASB). The AASB’s amendments are applicable retrospectively from July 1, 2008. “These amendments ensure Australian entities are able to use accounting
treatments consistent with those available in other jurisdictions and I welcome
the AASB’s role in this internationally co-ordinated set of actions,”
said Sherry. .
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