NSW Audit Office - Awareness - Issue 2004 04 - May 2004

The Audit Office Of New South Wales

Description

AWARENESSccounting and Auditing Developments ISSUE 4 MAY 2004ACCOUNTING 1ACCOUNTING UPDATEUPDATEAASB 1047 DISCLOSING THE IMPACTS OF ADOPTING AUSTRALIAN INTERNATIONAL 3EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING UPDATESTANDARDSMISCELLANEOUS 4The purpose of the Standard is to provide users of financial reports PUBLICATIONSwith relevant and reliable information about the impacts of changes LEGISLATIVE 5in accounting policies in the period leading up to implementing the CHANGES UPDATEFinancial Reporting Council’s strategy directive to adopt Australian equivalents to International Reporting Standards (IFRSs). TREASURY UPDATE 5The Standard applies to all reporting entities, including not for profit PREMIER’S 8entities, for interim and annual reporting periods ending on or after 30 DEPARTMENT UPDATEJune 2004 and ceases to apply once an entity has adopted Australian equivalents to IFRSs.AUDIT OFFICE 9BETTER PRACTICEIn respect of 30 June and 31 December 2004 financial reports entities GUIDESare required to explain how the transition to Australian equivalents to IFRSs is being managed and to provide a narrative explanation of the key differences in accounting policies that are expected to arise from adopting Australian equivalents to IFRSs.Adoption of Australian equivalents to IFRSs may result in changes to accounting policies that have significant impacts on the reported financial position and financial performance of an entity. The Australian ...

Informations

• Publié par: Viwyag
• Nombre de lectures: 13
• Langue: English

Extrait

AWARENESS

CONTENTS

ACCOUNTING

1

UPDATE

INTERNATIONAL

3

UPDATE

MISCELLANEOUS

4

PUBLICATIONS

LEGISLATIVE

5

CHANGES UPDATE

TREASURY UPDATE

5

PREMIER’S

8

DEPARTMENT

UPDATE

AUDIT OFFICE

9

BETTER PRACTICE

GUIDES

Accounting and Auditing Developments

ISSUE 4 MAY 2004

Awareness

is published by The Audit Office of New South Wales, 234 Sussex Street,

ice of New S

Sydney NSW 2000, GPO Box 12, Sydney NSW 2001

2000, GPO Box 12,

Telephone

9285 0155

Fax

9285 0001

Email

[e-mail]

Website

www.audit.nsw.gov.au

ACCOUNTING UPDATE

AASB 1047 DISCLOSING THE IMPACTS OF ADOPTING AUSTRALIAN

EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING

STANDARDS

The purpose of the Standard is to provide users of financial reports

with relevant and reliable information about the impacts of changes

in accounting policies in the period leading up to implementing the

Financial Reporting Council’s strategy directive to adopt Australian

equivalents to International Reporting Standards (IFRSs).

The Standard applies to all reporting entities, including not for profit

entities, for interim and annual reporting periods ending on or after 30

June 2004 and ceases to apply once an entity has adopted Australian

equivalents to IFRSs.

In respect of 30 June and 31 December 2004 financial reports entities

are required to explain how the transition to Australian equivalents to

IFRSs is being managed and to provide a narrative explanation of the

key differences in accounting policies that are expected to arise from

adopting Australian equivalents to IFRSs.

Adoption of Australian equivalents to IFRSs may result in changes to

accounting

policies

that

have

significant

impacts

on

the

reported

financial position and financial performance of an entity. The Australian

Accounting Standards Board (AASB) considers that explanation of how

ting Stan

the transition is being managed, for example, the entity’s plans and

ing ma

degree of achievement of the transition and the nature of the changes

degree of achievement of the transi

in accounting policies will provide relevant information to users of

ounting policies will provide releva

financial reports to enable them to make judgments about the impacts

ts to enable them to make judgmen

on

the

reported

financial

position

and

financial

performance

of

ancial

position

and

financial

entities.

The Audit Office of New South Wales

2

In respect of 30 June 2005 annual financial reports entities are required to provide known

or reliably estimable information about the impacts on the financial report, had the

financial report been prepared using Australian equivalents to IFRSs or, if the impacts are

not known or reliably estimable, a statement to that effect.

In complying with the above paragraph an entity considers disclosing an estimate of

the effect of the changes on its reported financial position and financial performance.

It is anticipated that most entities will be able to quantify the impacts of the changes

with sufficient reliability to make disclosures covering positive and negative impacts in

a manner that is not misleading. Where quantitative information is not known, or is not

reliably estimable, the entity should make a statement to that effect.

GAAP/GFS CONVERGENCE

The

AASB

commenced

its

consideration

of

responses

to

GAAP/GFS

Convergence

Consultation Papers No.1 and 2, focusing mainly on issues relating to the status of General

Government Sector (GGS) financial reporting relative to whole of government financial

reporting. The AASB debated alternative approaches to developing an accounting standard

requiring the GGS financial report to be prepared on a basis that does not consolidate

certain controlled entities (that is entities in other sectors), including:

regarding the GGS as a reporting entity and exempting it from full consolidation

deeming the GGS to be analogous to a parent entity within the whole of government

specifying whole of government general purpose financial reporting requirements that

include requirements for a GGS sector financial report, which could be extracted as a

stand alone financial report (that is not a general purpose financial report); and

specifying requirements for a stand-alone GGS financial report that is not a general

purpose financial report.

In considering the likely timing of a “GAAP/GFS convergence solution”, the AASB noted

conside

the complex issues to be resolved (both of a conceptual and technical nature), and that

sues to

the timing anticipated in the Project Implementation Plan currently on the AASB website

the Pr

may not be achievable.

ay no

The AASB decided that decisions concerning the flow through of GAAP/GFS convergence

cided that decisions concerning the

solutions for the GGS to other entities (including entities in Phase 2 and Phase 3 of the

GS to other entities (including en

Project) should be deferred until decisions in relation to the GGS have been made by the

rred until decisions in relation to

AASB.

The Audit Office of New South Wales

3

INTERNATIONAL UPDATE

IASB EXPOSURE DRAFT ON A PROPOSED AMENDMENT TO IASB 39 FINANCIAL

INSTRUMENTS: RECOGNITION AND MEASUREMENT OF THE FAIR VALUE OPTION

The publication of this proposed amendment is a direct response to concerns expressed

oposed

by prudential supervisors of banks, securities companies and insurers that the fair value

erviso

option might be used inappropriately. The Exposure Draft proposes to limit the financial

be

assets and financial liabilities to which the option may be applied, while preserving the

d f

key benefits of the option. In particular, the proposals are:

ef

to limit the types of financial assets and financial liabilities to which

mit the types of financial assets and financial liabili

the option may be applied to five specified categories, and

tion may be applied to five specified categ

to require that the option may be applied only to financial assets and financial

that the option may be applied only to f

liabilities whose fair value is verifiable. The proposal that fair value must be verifiable

ose fair value is verifiable. The proposal tha

would apply only when the fair value option is used, and not for other items measured

hen the fair value option is used, and not fo

at fair value (those classified as held for trading, derivatives and available-for-sale

ssified as held for trading, derivatives and av

assets) or for the purposes of disclosing fair value. It is a stricter test (which more

disclosing fair value. It is a stricter test (which

items will fail) than that of “reliably measured” contained in other parts of IAS 39 and

easured” contained in other parts of IAS 39 and

in other Standards.

Comments are requested by 21 July 2004.

INTERNATIONAL FINANCIAL REPORTING INTERPRETATIONS COMMITTEE (IFRIC)

MEETING-3-4 FEBRUARY 2004

Included at this meeting was a discussion on service concession arrangements. The

objective of this project is to consider the need to clarify, before 2005, how certain

aspects of the International Accounting Standards Board’s standards are to be applied in

accounting for service concessions and similar arrangements.

In the context of the lease accounting model for balance sheet issues, IFRIC discussed:

the significance of ownership rights in the model

whether the build phase should be considered separately from the operational phase

the applications of the principles set out in Draft interpretation D3

Determining

whether an Arrangement contains a lease

to arrangements in which the concession

provider grants the concession operator access to concession assets so that the

operator can use the assets to provide services to the provider; and

how the payment set out in D3 ought to be applied to the types of charging structures

that often apply in service concession agreements.

The Audit Office of New South Wales

4

On income statement issues IFRIC had a preliminary discussion on how the principles of

contract accounting might be applied to a road concession contract.

Other matters discussed at the meeting included:

Draft Interpretation D2 Decommissioning, Restoration and Similar Liabilities

Draft Interpretation D1 Emission Rights

Starting to apply IAS 29

IAS 19: defined contribution pension plans with a guaranteed minimum return on assets

IAS 27: investment of venture capital providers

IAS 32: members’ shares in co-operative banks

IAS 41: recognition and measurement of biological assets.

MISCELLANEOUS PUBLICATIONS

AUSTRALIAN NATIONAL AUDIT OFFICE REPORTS:

Compensation Payment and Debt Relief in Special Circumstances

The Commonwealth’s Administration of the Dairy Industry Adjustment Package

National Marine Unit

Corporate Governance in the Australian Broadcasting Corporation-Follow-up Audit

Integrity of the Electoral Roll-Follow-up Audit

Department of Health and Ageing’s Management of the Multipurpose Services Program

and the Regional Health Services Program

Management of Repatriation Health Cards

Financial Delegations for the Expenditure of Public Monies in FMA Agencies.

Fina

These reports are available at www.anao.gov.au.

re avail

QUEENSLAND AUDIT OFFICE REPORT:

Applying International Financial Reporting Standards to the Public Sector:

ational Financial Reporting Standa

PracticalExamples of IFRS

f I

This report is available at www.qao.qld.gov.au

at

The Audit Office of New South Wales

5

VICTORIAN AUDITOR-GENERAL’S OFFICE REPORT:

Beating the Bugs: Protecting Victoria’s economically significant crops from pests and

diseases.

This report is available at www.audit.vic.gov.au.

dit.vic.go

LEGISLATIVE CHANGES UPDATE

PUBLIC FINANCE AND AUDIT AMENDMENT (SYDNEY PARALYMPIC ORGANISING

COMMITTEE LIMITED) REGULATION 2004

The object of this Regulation is to amend the

c

Public Finance and Audit Regulation 2000

c F

to remove Sydney Paralympic Organising Committee Limited from the list of bodies

Sydney Paralympic Organising Committ

prescribed for the purposes of Division 4 of Part 3 of the Act because this organisation has

r the purposes of Division 4 of Part 3 of the

been dissolved.

(Commencement of this Regulation is 2 April 2004, GG No 69 2 April 2004 p 1845).

Regulation is 2 April 2004, GG No 69 2 April

TREASURY UPDATE

TREASURY CIRCULAR TC 04/03 2003-04 FINANCIAL REPORTING REQUIREMENTS

FOR THE CONSOLIDATED FINANCIAL REPORTS OF THE STATE

The Circular includes:

information on year-end financial reporting, auditing and the preparation of Annual

Treasury Returns

a checklist of tasks for preparation of year end financial reports; and

a Pro-forma for the reporting of emerging accounting issues to Treasury

(for return to

Treasury no later than 21 May 2004).

To ensure the legislative deadlines are met, Treasury does not propose to allow any

extensions of time for the preparation and submission of agencies’ financial statements.

Treasury is requesting organisations to meet as soon as possible with relevant stakeholders

to ensure the success of your year-end financial reporting plan.

This Circular withdraws and supersedes NSW Treasury Circular NSWTC 03/01.

This Treasury Circular is a direction issued under section 9(2) of the

Public Finance

and Audit Act, 1983.

For

further

information

contact

Ian

Rosenbaum

on

92284659

or

Andrew

Azar

on

92285164.

The Audit Office of New South Wales

6

TREASURY CIRCULAR TC 04/04 2003-04 FINANCIAL ACCOUNTING ARRANGEMENTS

FOR THE CROWN ENTITY

This circular details the requirements and the year-end timetable departments and

statutory bodies are required to follow in order for the Consolidated Crown Entity to meet

its statutory obligations. The attached guide includes:

Client Service Directory

End of year processing and banking arrangements

Financial Year End Timetable

Certificate of Reconciliation for Superannuation Guarantee Charge (SGC)

Certificate of Reconciliation with Treasury Ledgers

Liability to the Consolidated Fund Return

Crown Data Return

Contingent Assets and Contingent Liabilities Return.

The Consolidated Crown Entity relies on agencies finalising all postings and reconciling

their ledger accounts. The Certificates of Reconciliation are to be completed and returned

to Treasury by 16 July 2004.

Additional information is requested via the Liability to the Consolidated Fund and Crown

Data Returns. These returns allow complete and accurate information to be disclosed

in the Consolidated Crown Entity’s Financial Statements. The Crown Data Return is to

be returned by Friday 16 July 2004. Liability to the Consolidated Fund Return is to be

returned on the same date as the submission of draft accounts to NSW Treasury as per TC

04/03 Consolidated Financial reports of the State.

The Contingent Assets and Contingent Liabilities is a new return for 2003-04. It is to

be completed by all public sector agencies. A “nil” return is to be submitted, where

appropriate.

appro

This Circular withdraws and supersedes NSW Treasury Circular TC 03/05.

ithdraw

This Treasury Circular is a direction issued under section 9(2) of the Public Finance and

This Treasury Circular is a directio

Audit Act 1983.

t Act

For further information contact

rma

Gary de Bruyn on (02) 9228 4148.

on

The Audit Office of New South Wales

7

TREASURY CIRCULAR TC 04/05 ANNUAL REPORTING UPDATE

This Circular provides an update on annual reporting matters relating to the 2003-04

annual reports for NSW Public Sector agencies and summarises Treasury’s review of 2002-

rises Treasury’s re

03 annual reports including:

Results of 2002-03 Annual Reports Review program:

nnual

-Submission dates

da

-Summary review of operations

ar

-Management and structure

a

-Risk management and insurance activities.

m

New and updated annual reporting requirements for 2003-04:

nd updated annual reporting requirements

-Changes to annual reporting regulations

o a

-Executive remuneration - state owned corporations (update)

neration - state owned corporations (updat

-Distribution requirements for annual reports (update)

nts fo

-Submission of annual reports.

Other matters:

-Performance reporting

-Annual reporting awards

-Further information on Treasury’s website.

For further information on agency specific issues contact your Treasury RAD Analyst on

92284567. For policy issues contact the Financial Legislation and Accounting Policy on

92284095.

The Audit Office of New South Wales

8

RESULTS AND SERVICES PLAN

To support the Government’s continuing priority of value for money in service delivery,

Treasury has taken a new approach to the 2004-05 Budget and beyond.

In late 2003, all NSW general government agencies were asked to prepare their 2004-

05 Budget proposals in the form of a Results and Services Plan (RSP). The RSP is a brief

version of the Service and Resource Allocation Agreement (SRAA), which is currently

prepared by a number of larger agencies.

The RSP consolidates the ‘results focused’ approach to service delivery planning which

Treasury has been promoting for several years. This emphasises the importance of

establishing links between day-to-day activities (services) and medium to long-term

objectives (results). Clearly defined links help to ensure that limited government

resources are being used effectively.

Each RSP outlines key information relating to agency effectiveness and efficiency

including:

the results that an agency plans to achieve for the community

the services an agency delivers to achieve those results and the cost of service

delivery

performance indicators to monitor progress; and

risk management strategies to address the risks of results not being achieved.

The RSP should therefore be viewed as a strategic planning tool, and not simply a ‘budget

document’.

Treasury is conducting feedback sessions for all general government agencies in mid March

to discuss the new process and consider how it can be enhanced for the 2005-06 Budget.

Treasury will continue to provide support to all agencies seeking to improve their RSPs

for 2005-06. This will include organising cluster-based RSP working groups and facilitating

RSP workshops for individual agencies.

worksho

For further information contact your Treasury Analyst.

tion co

PREMIER’S DEPARTMENT UPDATE

PREMIER’S DEPARTMENT CIRCULAR

Number

Issued

2004-09

SES/Senior Officers Motor Vehicle Charges 2004-2005

SES/Senior Officers Motor Vehicle Charges 2004-

March 04

The Audit Office of New South Wales

9

AUDIT OFFICE BETTER PRACTICE GUIDES

The Audit Office produces guides to better practice to assist agencies. The following is a

ncies. The following is

list of those guides and the dates that they were published. All these guides are available

were publis

on the Audit Office website at www.audit.nsw.gov.au/guides-bp/bpgilest.htm.

t www.a

Title of Guide

Date issued

Management of Intellectual Property

en

October 2001

e-ready, e-steady, e-government: e-government readiness

assessment guide

September 2001

Sep

Monitoring and reporting on performance audit

in

recommendations

en

June 2001

Internal Financial Reporting

an

June 2001

Reporting Performance: a guide to preparing performance

mance: a guide to preparing performance

information for annual reports

ual

November 2000

Contracting Out Review Guide

ide

June 1999

une

Public Sector Corporate Governance - ready reckoner

ready

April 1999

Methodology for the Review of Residential Services for People

es for P

with Disabilities

June 1998

On Board: Guide to better practice for public sector governing

and advisory boards

April 1998

1998

The Corporate Credit Card: guidelines for the internal control

January 1997

Ambulance Service of New South Wales: debtors administration

September 1996

Ethnic Affairs Commission: administration of grants

December 1995

Joint Operations in the Education Sector: a review of

establishment, management and effectiveness issues

September 1995

Fraud Control: developing an effective strategy

Volume 1: conceptual framework

March 1994

Volume 2: strategy

March 1994

Volume 3: diagnostics

March 1994

Volume 4: Fraud Control Self Audit Kit

March 1998

COPIES OF REPORTS AND PUBLICATIONS

All performance audit reports are available on The Audit Office web site at www.audit.nsw.gov.au/repperf.htm

and can be purchased from the NSW Government Information Service (tel [phone]).

Copies of Auditing Standards, Auditing Guidance Statements, Audit Guides, Exposure Drafts,

and other guidance, including Legislative Policy Discussion Papers may now be obtained from:

The Institute of Chartered Accountants in Australia CA Retail/Chartered Bookshop

Phone:[phone] - Fax: [phone]

Email: [e-mail] - Postal Address: GPO Box 3921, Sydney. NSW.2001

Address: Level 11, 37 York Street, Sydney. NSW. 2000; or

CPA Australia

Level 28, 385 Bourke Street Melbourne, Victoria, 3000 - Telephone [phone]

Publications

of

the

Australian

Accounting

Standards

Board

(AASB),

including

Accounting

Standards

and Accounting Exposure Drafts are available direct from the Australian Accounting Standards Board.

PO Box 204 Collins

Street

West,

Victoria,

8007. Telephone (03)

9617 7600 -

Fax (03)

9617 7608

Email: [e-mail]. Or by visting the AASB website: www.aasb.com.au.

Copies of International Federation of Accountants (IFAC) publications may be obtained direct from IFAC, 535

Fifth Avenue, 26th Floor, New York, NY 10017, USA (tel [phone] or fax [phone] or by visiting the IFAC

web site at www.ifac.org.

Copies

of

International

Accounting

Standards,

Exposure

Drafts

and

International

Accounting

Standards Committee (IASC) publications may be obtained direct from the IASC, 166 Fleet Street, London EC4A

2DY, United Kingdom (tel [phone] or fax [phone] or email [e-mail] or Internet

www.iasc.org.uk).

Copies of NSW Government legislation including changes to legislation can be purchased from the NSW

Government Information Service. The legislation is also on the Internet at www.austlii.edu.au/.

Treasury publications (including Circulars) may be viewed by visiting the NSW Treasury web site at

www.treasury.nsw.gov.au.

Copies of Premier’s Department Circulars and Premier’s Memoranda may be viewed by visiting the Premier’s

Department website at http://www.premiers.nsw.gov.au/.

The AWARENESS Newsletter is of a general nature only and is not intended to be a substitute for or relied upon

as specific professional advice. No responsibility for loss occasioned to any person acting on or refraining from

action as a result of any material in the publication can be accepted.