Changes and Development in Financial Reporting Environment

Question: Discuss about theChanges and Development in Financial Reporting Environment. Answer: IASB Issues Narrow Scope Amendments to IFRS2 Share Based Payment Share based payments has been amended by IASB. Companies are required to follow the amendments for annual periods starting on or after 1 January 2018. Earlier application of amendment is also permitted. The amendments which were done by IFRS committee members stated various requirements on the accounting. The amendments require considering the implications of non vesting and vesting conditions on the calculation of share based system which is based on cash settlement payments. In addition to this, net settlement feature of share based payment transaction for withholding of tax obligations is also taken in effect (IFRS, 2016). Moreover, terms and conditions of share based payment system are modified which leads to change in the classification from equity to cash settlement of the transactions. Amendments to Australian Accounting Standards Clarifications to AASB 15 This amendment will apply to annual period beginning on or after 1 January 2018. Earlier application of this amendment is also permitted to companies. The main objective behind amendment of AASB 15 which describes Revenue from contracts with customers is the result of issuance of International Financial Reporting Standard Clarifications to IFRS 15 (AASB, 2016). This amendment uses striking out, underlining and various materials for the identification of some of the amendments to any standard, so that the amendments can be easily understood and their implication can also be carried easily without trouble. Government to Make Sweeping Changes to Foreign Trusts in Wake of Panama Papers Foreigners who are setting up tax free trusts will soon have to make disclosure of their identities and beneficiaries. The recommendations of disclosure are sensible and well reasonable CA, 2016). In this direction, the first step will be the creation of a register of foreign trusts so that police and internal affairs will be able to search. ASIC Simplifies Registration of Company Auditors The main objective behind simplifying the registration process is proper implication of standards for new companies so that red tape can be reduced. The main changes are new standard has been approved for satisfaction of practical requirements gained through experiments. The new registration procedure also reduced the paperwork and information which is required for satisfaction of an hour based experience test (ASIC, 2016). Moreover, the new procedure also focuses on updating of professional insurance requirements for both new registered companies auditors and authorized audit companies. The other advantages of simplifies registration of company auditors are adoption of principle based approach, fulfillment of new auditing requirements and simplification of competency requirement. This will lead to reduction in time and effort required to make an application. ASIC Bans Director and CEO of Park Trent Properties Group ASIC banned both the director and CEO of Trent Properties Group. They were carrying unlawfully unlicensed financial services business for a period of five years and were advising their clients for purchasing of investment properties by self-managed super fund (SMSF) (ASIC, 2016). However, ASIC found that they also ignore legal advice and warnings about Park Trent's practices. References: AASB. (2016, May 12) Clarifications to AASB 15. Retrieved from: https://www.aasb.gov.au/News/Clarifications-to-AASB-15?newsID=193280. ASIC. (2016, July 28) 16-240MR ASIC bans director and CEO of Park Trent Properties Group. Retrieved from: https://asic.gov.au/about-asic/media-centre/find-a-media-release/2016-releases/16-240mr-asic-bans-director-and-ceo-of-park-trent-properties-group/ ASIC. (2016, June 30) 16-210MR ASIC simplifies registration of company auditors. Retrieved from: https://asic.gov.au/about-asic/media-centre/find-a-media-release/2016-releases/16-210mr-asic-simplifies-registration-of-company-auditors/. (2016, July 27) Foreign trust disclosure changes announced. Retrieved from: https://www.charteredaccountantsanz.com/en/Site-Content/News-and-Updates/Foreign-trust-disclosure-changes-announced.aspx#.V7Q3wVt94_4 IFRS. (2016, June 20) International Accounting Standards Board issues narrow-scope amendments to IFRS 2 Share-based Payment. Retrieved from: https://www.ifrs.org/Alerts/PressRelease/Pages/International-Accounting-Standards-Board-issues-narrow-scope-amendments-to-IFRS-2-Share-based-Payment.aspx