|Extent of IFRS application
|IFRS Accounting 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 Accounting Standards are permitted but not required for domestic public companies
|IFRS Accounting 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 Accounting 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 Accounting Standard is under consideration
Profile last updated: 23 June 2017
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:
Australian Accounting Standards apply to:
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 In 2007, the AASB approved an 'Amending Standard' that rescinded the changes that the AASB had made to IFRS when it initially adopted them as Australian Equivalents of IFRS Standards.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:
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:
The following entities may apply either Tier 2 or Tier 1 requirements in preparing general purpose financial statements:
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:
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.’
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.
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).