Financial Reporting Update

Jun-Aug 15

Overview
This newsletter highlights some of the important amendments and changes that
have taken place in the financial reporting framework for the period June 2015 to
August 2015, which we as accounting professional must be aware of. It only
provides a brief overview of those amendments.

Discounting employee benefits based on the corporate bond yields:

The proposed amendment calls for using the investment grade (high quality)
Australian corporate bond rates at the reporting date for determining the
employee benefit liabilities, instead of using the Australian government bonds.
This change comes on the back of a highly developed and liquid Australian
corporate bond market
More details on this update can be found on the website of KPMG
Australia>Research>Reporting updates.
http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/FlashReports/Pages/15ru-004.aspx

Re-issued Guidance Note 8 Continuous Disclosure: Listing Rules 3.1

3.1B (GN 8)
The ASX has re-issued GN 8 on Listing Rules, the key points under which are

Earnings surprise a distinction between market sensitive earnings surprise

and earnings surprises has been made so as to develop an expectation on
disclosure obligations. A differentiation has been made for entities not publishing
earnings guidance and for those publishing earnings guidance.
Publishing analyst forecasts and consensus estimates recommendation of the
form of analyst forecast and consensus estimates has been made, along with a
disclaimer that the company does not endorse the estimates.
Investor briefings highlights the risk of selective or inadvertent release of
market sensitive information.
For detailed disclosure and regulatory requirements refer to the page
(http://www.asx.com.au/documents/rules/gn08_continuous_disclosure.pdf)

Sale or contribution of assets between an investor and its associate or

joint venture
AASB proposes to indefinitely defer the amendments relating to the gain/ loss
that an entity recognises in its financial statements when assets are sold/
contributed between the entity and an associate or joint venture in which it
invests. These relate to AASB 2014-10 Amendments to Australian Accounting
Standards Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture. The current effective date for this amendment is 1 st Jan, 2016.

Proposed amendments to AASB 15

AASB has issued ED on proposed amendments to AASB 15 - Revenue from
Contracts with Customers. The ED proposes to clarify:

1. identification of performance obligation for a contract;

2. determining if a party is the principal agent; and
3. determining if a license gives the right to access or use the companys
intellectual property to the customers.
A detailed description of the ED is available at the AASB website
http://www.aasb.gov.au/admin/file/content105/c9/ACCED267_08-15.pdf
Service Concession Arrangements: Grantor Accounting
The AASB has issued ED 261: Service Concession Arrangements: Grantor
The proposed new schedule is applicable to the service concession arrangements
which lays down the new revised policies for the grantors. The implementation of
ED 261 ensures that the assets and liabilities related to service concession is
recognized earlier and in an effectively and efficient manner
A detailed description of the ED is available at the AASB website
http://www.aasb.gov.au/admin/file/content105/c9/ACCED261_05-15.pdf
Proposed amendments for DB plans
The AASB has issued ED 266 for Defined Benefit Plan for clarifying Accounting.
The exposure draft issued identifies and analyses effects on the refund
pertaining to a plan settlement in a reporting period driven by the abilities of
other parties (like pension trustees) wo wind up a benefit plan or enhance the
associated benefits for enrolled members.
A detailed description of the ED is available at the AASB website
http://www.aasb.gov.au/admin/file/content105/c9/ACCED266_06-15.pdf

The IASB has tentatively decided to amend IFRS 4 Insurance Contracts to

mitigate accounting mismatches in profit & loss when entities apply IFRS 9
Financial Instruments before IFRS 4.
A detailed overview of the amendments can be found on the website of EY
http://www.ey.com/Publication/vwLUAssets/Insurance_Accounting_Alert_July_2015
/$FILE/ey-insurance-accounting-alert-july-2015.pdf

IASB has issued a tentative proposal to clarify the implications and

implementation of IFRS 12 which pertains to the Disclosure of Interest in other
entities. The proposed clarification issued by IASB talks about the disclosure
requirements as laid down by IFRS 12 and states that it applies to the interests
that are accounted for as held for sale or discontinued operations. Further, the
proposal also states that the ED is expected in Q4 of 2015 and the amendment is
expected to be in connection with 2014-16 Annual Improvements Cycle.
A detailed proposal and background is available on the IFRS website-

http://www.ifrs.org/Meetings/MeetingDocs/IASB/2015/July/AP12D-IFRSImplementation-issues.pdf