Framework for the Preparation and Presentation of Financial Statements

Topics: International Financial Reporting Standards, Annual report, Financial statements Pages: 3 (735 words) Published: January 30, 2013
the Framework
The Australian Accounting Standards Board (AASB) is implementing the Financial Reporting Council’s policy of adopting the Standards of the International Accounting Standards Board (IASB) for application to reporting periods beginning on or after 1 January 2005. The AASB is replacing relevant existing AASB Standards with Australian Standards equivalent to those of the IASB. Consequently, the parts of the existing Australian conceptual framework (SAC 3 Qualitative Characteristics of Financial Information and SAC 4 Definition and Recognition of the Elements of Financial Statements) that overlap with the Framework for the Preparation and Presentation of Financial Statements issued by the IASB are being replaced by this Framework to ensure that there is consistency when: (a) the Australian equivalents to IASB Standards refer to the Framework. For example, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors outlines a hierarchy to be followed in developing an accounting policy when an Australian Accounting Standard does not specifically address the transaction. The Framework developed by the IASB is an integral part of this hierarchy; and

(b) the AASB evaluates proposed Standards for application in Australia. The AASB has decided it will continue to issue sector-neutral pronouncements, that is, pronouncements applicable to both for-profit and not-for-profit entities, including public sector entities. Except for pronouncements that are specific to the not-for-profit or public sectors or that are of a purely domestic nature, the AASB is using the IASB

pronouncements as the “foundation” pronouncements to which it adds material detailing the scope and applicability of a pronouncement in the Australian environment. Additions are made, where necessary, to broaden the content to cover sectors not addressed by an IASB pronouncement and domestic, regulatory or other issues.

Main Features of this Framework
The Framework for the...
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