Australian Accounting Standard Board Reporting Essay


Discuss About The Australian Accounting Standard Board Reporting?



In the Australian accounting standard, the presence of Differential Accounting Reporting can be seen since the year 1990. The reporting firm theory develops the centre of Differential Reporting Regime. The development of differential reporting is based on the concept of reporting unit (Macve 2015). At present, there is a planning for transformation in differential reporting according to the Australian Accounting Standard Board for the substituting of the concept of reporting entity. The Australian Accounting Standard Board is considering the amendment of financial reporting regime along with all the monetary financial aspects and it will be lodged with ASIC under the Corporation Act 2001. In the present time, the Australian Accounting Standard Board has placed the framework of differential framework before the framework of AASB 1053 (Deegan 2016). It has been seen that the users were unsatisfied with the current differential accounting framework as it fails to implement effective financial reporting system in the business entities. In order to diminish this issue, the Australian Accounting Standard Board has taken the decision to amend differential reporting framework.


In the recent time, AASB has issue two principles regarding the disclosure requirement of the business organizations at the time of preparing the general-purpose financial statements. The main objective behind this is to move all the companies in the same direction in order to increase transparency and consistency with the help of the elimination of unnecessary disclosures. The capabilities of the business organizations use to derive the major benefits of lowered disclosures. AASB 1057 Application of Australian Accounting Standards has recognized the accounting and financial standards regarding the development of monetary standards. As per AASB 1053 Application of Tiers of Australian Accounting Standards, differential reporting framework includes the reporting obligations of two tiers for the preparation of financial statements of the companies (Zhang and Andrew 2014). Tier 1 helps in the integration of International Financial Reporting Standards along with the interpretation of financial statements issue by IASB. The business entities that are bound to disclose their profits are obliged to adopt the regulations of Tier 1 and thus, they have the responsibility to meet the terms of IFRS. Apart from this, other for-profit private companies need to comply with the rules and regulations of Tier 1 and thus, they also needs to follow the regulations of IFRS (Cohen and Lys 2015).

On the other hand, Tier 2 includes the identification and measurement of Tier 1 by considering the disclosure requirement of Tier 1. In case of Australian Accounting Standard (AAS), the requirements are same for the Australian companies. All these requirements can be found in the documents of AAS and this process helps in the integration of not for profit companies along with the disclosures and regulatory issues. These kinds of regulations help the companies to comply with the regulations of IFRS (Rego et al. 2015). AASB has reassessed the rules and standards and it states that the business entities need to incorporate some other relevant information in the financial reports of the companies according to the disclosure regime. The stated proposal in Exposure Draft 277 of Reduced Disclosure Requirements for Tier 2, states that the business entities need to deal with the external reporting concerns that has its own significance under the regulations of RDR. In this process, the concern of AASB can be seen regarding the elimination of unnecessary and over detailed disclosures in the financial statements of the companies. In Australia, some companies can be seen that have the right to adopt the regulations of RDR instead of the regulations of special purpose reports (Sutherland 2017).

After the implementation of reduced disclosure methods in the organizations, various stakeholders like supervisors, stakeholders and others believe that this process will be helpful for the business entities in the adoption of the regulations of FPRF in order to reduce unnecessary disclosures. Thus, in particular, it can be said that AASB has proposed to lower the requirement of disclosure of the financial statements. This process largely depends on the feedbacks from different stakeholders of the companies. In this regard, it needs to be mentioned that all the business enteritis that prepare the financial statements under the regulations of GRFR have the right to select the adoption of the policies of reduced requirement under Tier II (Cazier et al. 2015). One of the major aspects that need to be mentioned in this case is that the Government and universities do not have the right to apply the rules and regulations of reduced disclosure requirements. One of the major intentions of Australian Accounting Standard Board is to remove the theory of removing entity that would help in the elimination of the preparation of special purpose financial reports. Apart from this, AASB has taken the decision of continuous use regarding the implementation of RDR reporting. Thus, it needs to be mentioned that the special purpose financial reports do not have the right to take advantage of Reduced Disclosure Requirements compliances. According to AASB 1053 and AASB 2010-2, directors and the committee members of the companies have the right to make the choice regarding shifting from special purpose reporting to Reduced Disclosure Requirement GPFR from the early implementation (Bodle et al. 2016). In case the companies choose to adopt the policy of Reduced Disclosure Requirement, the business organizations need to disclose all the open statements of the organizations within the AAS rules. Most importantly, these business entities need to make it sure that all the requirements of Required Disclosure Requirements are met. In this case, there is not any need for consideration.


From the whole discussion, it can be said that it is the responsibility of the management of the business entities to make it sure that all the financial statements of the companies are well complied with all the rules and regulations of IFRS, AASB and AAS. The changes are also important in order to take the opportunity to educate the board of the company regarding the obligations of fiscal reporting. It can be said that most of the entities will consider the change of Reduced Disclosure Requirements as the opportunity to move from general purpose of financial reportin


Bodle, K.A., Bodle, K.A., Cybinski, P.J., Cybinski, P.J., Monem, R. and Monem, R., 2016. Effect of IFRS adoption on financial reporting quality: Evidence from bankruptcy prediction. Accounting Research Journal, 29(3), pp.292-312.

Cazier, R., Rego, S., Tian, X. and Wilson, R., 2015. The impact of increased disclosure requirements and the standardization of accounting practices on earnings management through the reserve for income taxes. Review of Accounting Studies, 20(1), pp.436-469.

Cohen, D. and Lys, T.Z., 2015. Real and Accrual-based Earnings Management in the Pre-and Post-Sarbanes Oxley Periods. AAA 2006 Financial Accounting and Reporting Section (FARS) Meeting Paper

Deegan, C., 2016. Financial accounting. McGraw-Hill Education Australia.

Macve, R., 2015. A Conceptual Framework for Financial Accounting and Reporting: Vision, Tool, Or Threat?. Routledge.

Rego, S.O., Cazier, R.A., Tian, X.S. and Wilson, R.J., 2015. The Impact of Increased Disclosure Requirements and the Standardization of Accounting Practices on Earnings Management Through the Reserve for Income Taxes.

Sutherland, D.W., 2017. Independent audit report. Newsmonth, 37(3), p.19.

Zhang, Y. and Andrew, J., 2014. Financialisation and the conceptual framework. Critical perspectives on accounting, 25(1), pp.17-26.

How to cite this essay: