|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||Australian equivalents to IFRS Standards are required for all reporting entities, including listed companies and financial institutions.|
|IFRS Standards are permitted but not required for domestic public companies|
|IFRS Standards are required or permitted for listings by foreign companies||Permitted. Alternatively foreign companies may use their home standards if approved by the stock exchange.|
|The IFRS for SMEs Standard is required or permitted||Not permitted if the SME meets the definition of a reporting entity. For other SMEs, no specific accounting framework is required.|
|The IFRS for SMEs Standard is under consideration||No.|
Role of the organisation
The AASB is an Australian Government agency under the Australian Securities and Investments Commission Act 2001. Under that Act, the statutory functions of the AASB are:
- to develop a conceptual framework for the purpose of evaluating proposed standards;
- to make accounting standards under section 334 of the Corporations Act 2001;
- to formulate accounting standards for other purposes;
- to participate in and contribute to the development of a single set of accounting standards for worldwide use; and
- to advance and promote the main objects of Part 12 of the ASIC Act, which include reducing the cost of capital, enabling Australian entities to compete effectively overseas and maintaining investor confidence in the Australian economy.
Australian Accounting Standards apply to:
- entities required by the Corporations Act 2001 to prepare financial reports;
- governments in preparing financial statements for the whole of government and the General Government Sector (GGS); and
- entities in the private or public for-profit or not-for-profit sectors that are reporting entities (as defined by Australian Accounting Standards) or that prepare general purpose financial statements.
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
What is the jurisdiction's status of adoption?
Additional comments provided on the adoption status?
Australia has adopted IFRS Standards since 1 January 2005. However, convergence with Standards issued by the Board and its predecessor, the IASC Board, had been occurring since 1996. Adoption from 2005 was through application of IFRS 1 First-time Adoption of International Financial Reporting Standards. Transitional disclosure requirements were specified in the year prior to adoption in AASB 1047 Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting Standards.
When Australia initially adopted IFRS Standards as of 2005, the AASB made a number of changes to IFRS Standards, including elimination of accounting policy options and addition of disclosures. In 2007, the AASB approved an 'Amending Standard' that rescinded the changes that the AASB had made to IFRS when it initially adopted them as Australian Equivalents of IFRS Standards. Those amendments were effective 1 July 2007. However some additional disclosures still remain.
Australia has two Tiers of reporting requirements for preparing general purpose financial statements:
- Tier 1: Australian Accounting Standards; and
- Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.
IFRS are incorporated into Tier 1 of Australian Accounting Standards, with the addition of paragraphs on the applicability of each Standard in the Australian environment.
Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 (which are also the recognition, measurement and presentation requirements of IFRS Standards) and substantially reduced disclosures corresponding to those requirements.
The following entities apply Tier 1 requirements in preparing general purpose financial statements:
- for-profit entities in the private sector that have public accountability (including pension funds); and
- the Australian Government and State, Territory and Local Governments.
The following entities may apply either Tier 2 or Tier 1 requirements in preparing general purpose financial statements:
- for-profit private sector entities that do not have public accountability;
- all not-for-profit private sector entities; and
- public sector entities other than the Australian Government and State, Territory and Local Governments
Private sector for-profit entities complying with Tier 1 of Australian Accounting Standards will simultaneously comply with IFRS Standards. Those entities are required to have an explicit statement in the statutory financial statements regarding compliance with IFRS Standards as issued by the Board.
March 2017 report on evaluation of IFRS Standards in Australia
In March 2017, the Australian Accounting Standards Board (AASB) published AASB Research Report No. 4, Review of Adoption of International Financial Reporting Standards in Australia. The report found:
- The IFRS Standards transition process has been reasonably smooth for most sectors.
- While IFRS Standards are currently an appropriate basis for AASB Standards developed for NFP entities, further modifications are needed to improve the quality and the cost-efficiency of financial reporting.
- One of the key benefits of adoption across all sectors is that it has enabled users and preparers to move between sectors, and between countries, with transferable knowledge and skills.
- Some entities, in particular those that operate in other countries that use IFRS Standards, have experienced cost savings in preparing financial reports. In contrast, some small and medium-sized entities (SMEs) and NFP entities have concerns regarding the costs of fully complying with AASB Standards, particularly the disclosure requirements.
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
IFRS Standards are required for all entities that meet the definition of a ‘reporting entity’ under Australian accounting standards. A reporting entity is ‘an entity in respect of which it is reasonable to expect the existence of users who rely on the entity's general purpose financial statement for information that will be useful to them for making and evaluating decisions about the allocation of resources. A reporting entity can be a single entity or a group comprising a parent and all of its subsidiaries.’
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnote states that financial statements have been prepared in conformity with:
Both the jurisdiction’s financial reporting standards (Australian Accounting Standards) and IFRS Standards.
Further, the basis of preparation note to the financial statements goes on to say that compliance with Australian Accounting Standards ensures that the financial statements also comply with IFRS Standards.
In June 2010, the Australian Parliament passed financial reporting reform legislation that requires an explicit statement of compliance with IFRS in the directors’ declaration accompanying the financial statements.The change was designed to counter a lack of awareness that the financial statements of Australian companies and other reporting entities comply with IFRS Standards.
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
No with respect to for-profit entities, except that Australia has not adopted IAS 26 Accounting and Reporting by Retirement Benefit Plans. Retirement benefit plans in Australia must apply IFRS Standards (except for IAS 26) and also apply Australian accounting standard AAS 25 Financial Reporting by Superannuation Plans. Modifications are made for not-for-profit entities. Additional guidance is provided in some standards for for-profit entities (eg AASB 6 equivalent to IFRS 6 Exploration for and Evaluation of Mineral Assets has additional guidance on ‘area of interest accounting” that is considered consistent with IFRS 6).
When Australia initially adopted IFRS as of 2005, the AASB made a number of changes to IFRS Standards, including elimination of accounting policy options. In 2007, the AASB approved an 'Amending Standard' that rescinded the changes that the AASB had made to IFRS Standards when it initially adopted them. Those amendments were effective 1 July 2007.
Australia has additional standards required for life and general insurers that are entirely consistent with IFRS 4 Insurance Contracts. Australia has added an additional standard on materiality (to be withdrawn).
Australia has additional interpretations including those on Australian Petroleum Resource Rent Tax, depreciation of long-lived physical assets, goods and services tax, substantive enactment of major tax bills in Australia (to be withdrawn), subscriber acquisition costs in the telecommunications industry, and tax consolidation accounting. Australia continues to have additional disclosure requirements specific to Australian legal requirements (eg dividends and prudential capital requirements).
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Has the jurisdiction adopted the IFRS for SMEs Standard for at least some SMEs?
If no, is the adoption of the IFRS for SMEs Standard under consideration?
Did the jurisdiction make any modifications to the IFRS for SMEs Standard?
If the jurisdiction has made any modifications, what are those modifications?
Which SMEs use the IFRS for SMEs Standard in the jurisdiction, and are they required or permitted to do so?
For those SMEs that are not required to use the IFRS for SMEs Standard, what other accounting framework do they use?
Other comments regarding use of the IFRS for SMEs Standard?
All for-profit companies with public accountability that prepare general purpose financial statements in Australia report under IFRS. This includes all companies whose securities are publicly traded plus others. For a fuller description of the Australian reporting requirements, see the Australia jurisdictional profile.
General requirements for companies for-profit entities
Under the Corporations Act 2001, large proprietary companies (LPC) are required to lodge annual financial statements with the Australian Securities and Investments Commission (ASIC). LPCs are those proprietary companies that meet two or more of the following three criteria: (1) consolidated revenue of AUD25 million or more; (2) consolidated gross assets of AUD12.5m or more; and (3) 50 or more employees (consolidated). Proprietary companies not meeting the criteria are small proprietary companies (SPC) and are generally not required to lodge financial statements. The exceptions are when the SPC is controlled by a foreign company or when 5 per cent or more of the shareholders ask for financial statements to be lodged.
LPCs and SPCs lodging financial statements must do so within four months of the period end.
LPCs and SPCs lodging financial statements may comply with IFRS or the Australian Accounting Standards Board’s (AASB) Reduced Disclosure Regime, which is the IFRS recognition and measurement requirements and a subset of the IFRS disclosure requirements.
Some LPCs and SPCs prepare what are called ‘special purpose financial statements’, which involve applying the IFRS recognition and measurement requirements and limited disclosure requirements, based on the ASIC Regulatory Guide 85 Reporting requirements for non-reporting entities.
Co-operatives are state-based entities (Australia is a federation of six states and two territories). Each state has agreed to require co-operatives to apply the national companies’ law and they report in much the same way as LPCs.
Registered managed investment schemes (MIS)
These are generally trust structures that seek money from the public, but many are not listed. An MIS is required to lodge financial statements with the ASIC annually within three months of the period end. Most also have a half-year reporting obligation.
Foreign registered companies (FRC)
Listed companies are required to lodge their (IFRS) financial statements with the ASIC and the Australian Securities Exchange (ASX) or other relevant market operators.
An ASIC class order allows listed companies to lodge only with the ASX, an agent for the ASIC, which then passes the financial statements to the ASIC.
Listed companies must lodge financial statements annually and half-yearly.
Listed companies must lodge annual financial reports with the ASIC within three months of the end of the financial year and half-year financial statements within 75 days of the end of the half-year.
General requirement for companies
What type or format of structured electronic filing is required or permitted?
What is the purpose of the electronic filing?
What documents are required to be filed to the electronic filing system?
Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
The ASIC uses the IFRS Taxonomy as it is released by the IFRS Foundation. Australian extensions are added to the IFRS Taxonomy to cover specific Australian disclosure requirements. No change is made to the architecture of the IFRS Taxonomy.
The IFRS Taxonomy with Australian extensions is published on the Australian Standard Business Reporting (SBR) website for companies to use when preparing XBRL financial reports.
What is (are) the intended purpose(s) of the local base taxonomy?
Which IFRS Taxonomy files are used?
Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?
Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?
What is the scope or coverage of XBRL filing/tagging?
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?
Any guidelines or submission rules for filers?
Do bodies in this jurisdiction use XBRL for purposes other than general purpose financial reports? (For example, taxation authorities, statistical purposes etc.)
The SBR is a standard approach that was introduced by the Australian Government. Preparers can reduce administration time because filings required by the Australian Taxation Office, the Australian Prudential Regulatory Authority, State Revenue Offices, etc. can be completed by filing once. Except for the filing with the ASIC as previously described, the locally developed SBR AU Taxonomy is used.
Role of the organisation
The AASB is an independent Australian Government agency under the Australian Securities and Investments Commission Act 2001 (the ‘AS IC Act’). Under the ASIC Act, the statutory functions of the AASB are:
- to develop a conceptual framework for the purpose of evaluating proposed Standards;
- to make accounting Standards under Section 334 of the Corporations Act 2001;
- to formulate accounting Standards for other purposes;
- to participate in, and contribute to, the development of a single set of accounting Standards for worldwide use; and
- to advance and promote the main objects of Part 12 of the ASIC Act, which include reducing the cost of capital, enabling Australian entities to compete effectively overseas and maintaining investor confidence within the Australian economy.
Role of the organisation
The ASIC is Australia’s corporate, markets and financial services regulator.
The ASIC contributes to Australia’s economic reputation and wellbeing by ensuring that Australia’s financial markets are fair and transparent, supported by confident and informed investors and consumers. The ASIC is an independent Australian Government body.
The ASIC is set up under and administers the Australian Securities and Investments Commission Act 2001, and carries out most of its work under the Corporations Act 2001. All companies that meet the conditions described in the Corporations Act must prepare and lodge with the ASIC their financial reports, which will be made available to the public.
These financial reports are reviewed in the ASIC’s surveillance programmes.