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Developing issuing and maintaining principles-based accounting standards

The AASB, in accordance with the FRC direction in 2002, has adopted IFRS accounting and external reporting standards as part of our strategy to facilitate confidence in the Australian economy.

Maintaining IFRS compliance for publicly accountable for-profit entities and using IFRS as a baseline for other entities, means that overseas investors understand our financial reporting and consistency helps reduce the costs incurred by our companies seeking to raise funds. In addition, using IFRS as a basis for other entities promotes professional mobility across the three sectors and also meets our objectives for improving comparability and user confidence in financial reporting.

The following diagram identifies the high-level interaction undertaken by the AASB in developing, issuing and maintaining Australian Accounting Standards.

The principles that underpin the standard-setting process, those of identifying issues, researching, consulting, and considering feedback, enable us to develop, issue and maintain principle-based accounting standards that meet user’s needs and facilitate confidence in the Australian economy.

AASB Standard-Setting Process flow chart consist of three separate columns, being the IAASB, AASB and the Australian Stakeholders. AASB Process is Step one FRC Strategic directives & oversight. Step two Identify technical issues. Australian Stakeholders provide feedback and agenda consultation. Step three Research and consider issue. Australian Stakeholders respond to targeted outreach and provide feedback to AUASB. AUASB contributes to IAASB research. Step four Develop and issue consultation document (discussion papers, invitation to comment, exposure draft). Australian Stakeholders participate in roundtable, targeted outreach and provide findings to AUASB. AUASB provides feedback to IAASB. Step five Consider feedback and complete submission to IAASB. IAASB considers submission. Step six AUASB Exposure draft issued. AUASB exposes IAASB final standard. Stakeholders respond to draft. Step seven Consider compelling reasons test. Step eight Issue final statement or other pronouncement, complete Office of Best Practice Regulation. Step nine Monitor through post-implementation review. Stakeholders provide feedback on implementation and compliance. AUASB provide feedback to IAASB. Australian Stakeholders Process is Step one identify technical issues. Feedback and agenda consultation with AUASB. Step two Respond to targeted outreach. Provide feedback to AUASB. Step three Review and consider consultation document. Step four Participate in roundtable, targeted outreach, prepare submissions to AUASB. Step five Respond to AUASB exposure draft. Stage six Implementation and compliance. Provide AUASB feedback to inform post implementation review. IAASB Process is Step one Identify technical issue. Step two Research and consultation. Step three Task force deliberation. Step four Transparent debate. AUASB contributes to IAASB research. Step five Exposure for public comment on exposure draft. AUASB provides feedback on IAASB documents. Step six Consideration of comments received on exposure. AUASB submits feedback to IAASB. Step seven Issue final Standard or other pronouncement. AUASB exposes final standard. Step eight Post-implementation review. AUASB contributes to IAASB research.