An Australian comparison

Article Abstract:

Australian standard setters, regulators and preparers are rethinking their corporate financial reporting standards as the trend towards international harmonization accelerates and the deadline for the work program of the International Accounting Standard Committee nears. The Australian Accounting Standards Board has recently released Policy Statement No. 6, 'International Harmonization Policy,' to ensure the compatibility of Australian Accounting Standards with international standards. Differences that would have to be dealt with by authorities include those related to such areas as substance over form, business combinations, reconstructions, asset swaps, prudence, revaluations and recoverable amount write-downs, use of equity accounting and income tax. Differences are also seen in foreign currency transactions and translation, accounting policies, inventory valuation, government grants and revenue.

Australia, Standardization, International aspects

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Keeping hedges in trim

Article Abstract:

The Financial Accounting Standards Board's 10-year financial instruments project has culminated in the issuance of the exposure draft (ED) 'Accounting for Derivative and Similar Financial Instruments and for Hedging Activities' in June 1996. The proposed standard seeks to correct the existing accounting regime's inadequacy, inconsistency and failure to fully explain the impact of derivatives. The ED requires all derivatives to be characterized as assets or liabilities in financial statements. These financial instruments should also be measured at fair value. Derivatives can be characterized as a fair value hedge, a cash flow hedge or a hedge of the foreign currency exposure of a net investment in a foreign operation. The proposed standard would take effect for all entities, derivatives and other similar financial instruments.

Accounting and auditing, Derivatives (Financial instruments), Financial Accounting Standards Board

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