Identification of Changes and Developments
Recent developments in financial reporting:
The year 2017 marks the first year in which the significant global entities would prepare the general purpose financial statements and also submit the same to the Australian Taxation office. These financial statements prepared must correspond to the income year and must be handed over to the Commissioner by the time he company is able to lodge its tax return.
Superannuation entities:
The superannuation investments in the country of Australia totals to about $2 trillion. And it is for this reason that the members of the superannuation funds must have an access to the information which is easy to understand when it comes to the overall performance. From this year, the financial statements of the superannuation funds would show in the benefits that the members are entitled to and also, whether this fund is likely to be able to pay in the benefits. These new requirements replaces the AAS 25 which relates with the financial reporting by the superannuation plans. These apply to the larger superannuation companies which are regulated by the Australian Prudential Regulation authority and also to the superannuation entities of the public sectors. These new requirements fails to apply to the self-managed superannuation funds and also results in some of the significant changes in the presentation, measurement and also to the disclosure requirements. When it comes to the initial application, these entities are not required to present the statement of financial position (EY, 2017).
The next steps would include in the facts for the entities that have not yet adopted the ASC 606. The effective date for the same would be aligned in with ASC 606. In respect of the business entities that are already following it, the same is effective for the fiscal years which begins after December 15, 2017. This includes the interim period within the stated fiscal year. As for the other companies, the effective data is after the fiscal year December 15, 2018 and also the interim periods within the fiscal years which begins on or after December 15, 2019.
The FAS issued ASU 2017-09 which deals with the amendment in the scope of the modification accounting for the arrangements pertaining to the share based payments. It provides insight into the terms and the conditions of the wards of the share based payments that would be required for the application of the modification accounting under the ASC 718. An entity would not apply the modification in case, the fair value, vesting conditions, classification of the wards are somewhat same as were before and after the modification took place. The following is the link for the same:
IASB released the IFRS 17 which deals with the principles for the recognition, measurement, presentation and the insurance contract disclosures. The main aim of this standard is the reduction of the diversity in practice which rose due to the IFRS 4. This standard allowed the company to carry on the accounting for the insurance contracts by the way of using the national accounting standards which results in many of the different approaches.
The development would be lead to an increased comparability by the way of requiring in all of the insurance contracts to be accounted for in a consistent manner.
The PCAOB has recently released a standard relating with the reporting by the auditors wherein a new section by the auditors will have to be added in their report which is named as “Critical audit matters” wherein the main considerations that contorts to CAM and the way in which he has addressed these issues and also would contain the other accounts and the disclosures in the financial statement (IAS plus, 2017).
The FASAB has issued a statement wherein the narrative disclosures and the information pertaining to the tax expenditures will have to be reported in the governments consolidated financial report. This would help the users of the financial statements in understanding the tax expenditures, their purposes, impact on the collection of the taxes and the contribution to the costs pertaining to the programs (FASB, 2017).
The GASB had issued a statement wherein the transactions which includes cash and other monetary assets that have been acquired using the existing resources or the resources other than the proceeds of refunding the debt would be placed in a trust that would be irrevocable for the purposes of extinguishment of the debt (IFRS, 2017).
As per this development, a guide including the scope and the applicability of the statement 74, types of the post employ mental benefits, defined benefit OPEB plans which have bene administrated through the trusts etc have bene defined out.
The following is the Statement of financial position:
|
Statement of financial position |
|
|
Current assets: |
Amounts in $ |
|
Cash at bank |
18,200.00 |
|
Cash management account |
1,50,000.00 |
|
Accounts receivable |
1,09,300.00 |
|
Interest receivable |
6,700.00 |
|
Inventory |
2,12,400.00 |
|
Raw materials |
1,00,500.00 |
|
Prepaid rent |
13,600.00 |
|
Total current assets |
6,10,700.00 |
|
Non-current assets: |
|
|
Land (at cost) |
11,00,000.00 |
|
Plant and equipment, net of accumulated depreciation |
5,47,900.00 |
|
Goodwill |
68,300.00 |
|
Investment property |
6,14,000.00 |
|
Loan receivable |
60,000.00 |
|
Total non-current assets |
23,90,200.00 |
|
Total assets |
30,00,900.00 |
|
Current liabilities: |
|
|
Accounts payable |
75,800.00 |
|
Current tax liability |
33,500.00 |
|
Accrued wages payable |
8,200.00 |
|
Interest payable |
8,300.00 |
|
Dividends payable |
45,000.00 |
|
Provision for annual leave |
19,000.00 |
|
Provision for long service leave |
8,000.00 |
|
Provision for warranty |
5,000.00 |
|
Total current liabilities |
2,02,800.00 |
|
Non-current liabilities: |
|
|
Debentures (due April 2020) |
6,00,000.00 |
|
Bank Loan |
5,00,000.00 |
|
Provision for annual leave |
17,000.00 |
|
Provision for long service leave |
19,000.00 |
|
Provision for warranty |
12,000.00 |
|
Total non-current liabilities |
11,48,000.00 |
|
Total liabilities |
13,50,800.00 |
|
Net assets |
16,50,100.00 |
|
Equity: |
|
|
Share capital |
5,00,000.00 |
|
General reserve |
2,76,800.00 |
|
Retained earnings |
8,73,300.0 |
|
Total equity |
16,50,100.00 |
References:
Accounting Roundup — May 2017. (2017). Iasplus.com. Retrieved 29 August 2017, from https://www.iasplus.com/en/publications/us/accounting-roundup/2017/05
Accounting Standards Update 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. (2017). Fasb.org. Retrieved 29 August 2017, from https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176169021134&acceptedDisclaimer=true
Accounting Standards Updates—Effective Dates. (2017). Fasb.org. Retrieved 29 August 2017, from https://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1218220137102
Developments. (2017). www.ey.com. Retrieved 29 August 2017, from https://www.ey.com/…/financialreportingbriefs…22june2017/…/financialreportingbriefs_038
IFRS. (2017). Ifrs.org. Retrieved 29 August 2017, from https://www.ifrs.org/
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