Strategy 2

PBS Outcome 1¹

Program 1

Deliverables 3

Define appropriate reporting frameworks for each of the three sectors - for-profit (e.g., listed and large proprietary companies), not-for-profit (e.g. charities) and public sector 

· For-profit private sector financial reporting framework defined and completed by 30/6/2020

Tracking well

· AASB issued in March 2020 AASB 2020-2 Amendments to Australian Accounting Standards – Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities & AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 effective from 1 July 2021 for both Standards.

· At the April 2020 Board meeting, the Board approved to issue an Exposure draft proposing that certain FP entities preparing SPFS will be required to make disclosures in their FS about their compliance with the R&M requirements in AAS.

Appropriate framework for not-for-profit private and public sector defined and other regulator (e.g. ACNC) sponsorship obtained by 30/6/2021 

Delayed and/ or Major issues

Not for profit private sector (e.g. charities and other NFPs)

· NFP Framework project delayed due to resourcing issues.

· Board approved project plan for financial reporting framework for NFP private sector entities in November 2019.

· Targeted consultations currently planned for June/Jul 2020 (6 months delay to original project plan)

· Project plan for NFP Conceptual Framework provided to Board at June 2020 Board meeting.

Tracking well

Public sector framework

· Board approved project plans for public sector at November meeting 2019.

· Template and updated project plan endorsed by FRC at its March meeting.

Disclosure in SPFS on compliance with R&M for NFP

· Standard 2019-4Disclosure in Special Purpose Financial Statement of Compliance with Recognition and Measurement Requirements issued in November 2019 requiring disclosure on compliance with recognition and measurement requirements in SPFS of certain NFP entities.

NFP Definition:

· The Board decided to proceed with ED 291 Not-for-Profit Entity Definition and Guidance and replace the current definition of NFP entity. The Board will consider revised implementation guidance and illustrative examples at future Board meetings.

Strategy 1,5,6,8

PBS Outcome 1

Program 1

Deliverables

1,2,4,7,8

KPIs 1,2

· Agree on 3-year program of work and deliver

· Maintain IFRS and New Zealand compliance for for-profit Private sector “publicly accountable” entities

· Tailor IFRS appropriately for other sectors, including developing Australian specific guidance

· Develop guidance on external reporting integral to financial reporting

· Develop guidance on emerging issues related to financial reporting

· Annual program of standards issued, delivered to plan agreed with the Board

· IASB equivalent Standards issued within two months of the release of the IFRS for for-profit entities

· IFRS and NZ compliance maintained for the for-profit private sector “publicly accountable” entities

· Feedback from NFP sector positive regarding the appropriateness of the IFRS tailoring

Tracking slowly but no major issues

Tracking well

Tracking well

Tracking well

Annual program of standards

· NFP Framework, management commentary and remuneration reporting projects planned hours for Q1 2020 not met and off track due to prioritising emerging issues.

· IPSASB Benchmarking and Insurance in public sector also off track due to prioritising emerging issues.

· All other projects/standards either tracking well or slowly but no major issues.

· AASB 2019-6 Amendments to Australian Accounting Standards Research Grants and Not-For-Profit Entities issued in December 2019 for NFP entities with December year-end reporting period provides option to defer for 6 months AASB 1058 for research grants received by an NFP entity.

· AASB 2019-7 issued in December 2019, amending AASB 1049 Whole of Government and General Government Sector Financial Reporting to enable optional rather than mandatory quantitative reconciliation of GAAP and GFS -responding to public sector issues with reconciling AASB 16 and GFS treatments of leases

· AASB 2019-8Amendments to Australian Accounting Standards – Class of Right-of-Use Assets arising under Concessionary Leases issued in December 2019 extending relief from concessionary lease recognition to public sector.

IFRS compliance maintained:

· AASB 2019-5Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia issued in November 2019 to ensure compliance with IFRS

Australia-equivalent IASB Standards issued within 2 months

The AASB issued the Australian-equivalent:

· Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform in October 2019 (AASB 2019-3); and

· Classification of Liabilities as Current or Non-current (Amendments to IAS 1) in March 2020 (AASB 2020-1).

Maintain NZ compliance

· ED291 Not-for-Profit Entity Definition and Guidance proposing to replace the current definition of an NFP entity is based on the NZ definition and guidance for Public Benefit Entity (PBE).

· New simplified disclosures standard AASB 1060 issued in March 2020 results in a divergence from the New Zealand RDR Framework (Tier 2). However, the R&M requirements for entities applying the Tier 2 reporting frameworks remains consistent and with the many Australian entities not complying with full R&M requirements, the overall outcome is likely to be more consistent with NZ requirements than currently is. This does not affect publicly accountable entities.

· The AASB agreed to work with the NZ XRB on a joint project addressing issues regarding audit fee disclosures.

Feedback from NFP Sector – IFRS Tailoring

· ACNC provided feedback on ED 293 indicating that they are supportive of increased transparency of financial reporting in the NFP sector (2019-4).

Strategy 3 

PBS Outcome 1 

Program 1 

Deliverables 5,6 

KPIs

Enhance profile domestically and internationally

Tracking well

· FRC approved the AASB International strategy in November 2019

· AASB & AUASB Climate change bulletin published in December 2018 has been replicated and issued by IASB

· Positive feedback received from domestic stakeholders onAASB-AUASB joint publication on Coronavirus (see below).

Maintain and enhance key international relationships with IASB, IPSASB, NZASB, AOSSG, International Financial Reporting for NPOs

· Be seen as experts as measured by stakeholder feedback, IASB and IPSASB feedback

Tracking well

Demonstrated by:

· IASB climate-related disclosures “inspired” by AASB and AUASB bulletin mentioned above.

· AASB Technical Principal is the Technical advisor for IPSASB, AASB Deputy Chair Mike Blake currently Deputy Chair of the IPSASB.

· AASB Technical Director part of panel discussion on Extractive Activities in October 2019 at International Forum of Accounting Standard Setters in London.

· AASB Technical Director is a member of the Technical Advisory Group for developing international financial reporting standards for not-for-profit organizations (IFRS4NPO).

· AASB-AUASB joint publication on Coronavirus (see below) mentioned by IAASB and Europe, inspiring them to prepare own version.

· AASB Acting Technical Director invited on panel discussion on Coronavirus impact on reporting by CAANZ

· AASB Acting Technical Director provided feedback on IBOR Phase 2 proposals on behalf of AOSSG to ASAF at its April meeting.

Two thought leadership pieces completed per annum and presented internationally 

Tracking well

IASB

· The AASB Chair and Staff presented to the IASB directly in a rarely offered opportunity on proposed ED 295 Simplified Disclosure Standard (now AASB 1060) at the December 2019 IASB Meeting in London which is related to IASB project Subsidiaries that are SMEs.

· The IASB Discussions Paper Business Combinations – Disclosures, Goodwill and

Impairmentdiscusses AASB Research Report 9 Perspectives on IAS 36, with the IASB holdingsimilar views to the recommendations of the report.

AOSSG

· The AASB Presented on financial instruments at 2019 AOSSG annual meeting as the financial instruments working group leader.

· Developed and presented proposed updated AOSSG strategy/vision statement, reflecting the AOSSG has an established international position and focusing on improving the standard-setting and financial reporting capacity of the region, as well as influencing the IASB and other stakeholders.

Strategy 4,8 

PBS Outcome 1 

Program 1 

Deliverables 1,2 

KPIs 5,6,7,13,14 

· Due process followed to ensure the quality of standard-setting:

· Evidence-informed approach to standard setting activities supports need for regulation and proposed solution

· appropriate consultation in accordance with the due process framework

· preparation of regulatory impact statement assessing costs and benefits

· Due process followed for all significant projects

Tracking well

Due Process Framework

· The AASB’s Due Process Frameworkfor Setting Standards approved by FRC at the November 2019 meeting.

· AASB approved standards in accordance with its due process:

o AASB 2019-4

o AASB 2019-5

o AASB 2019-6

o AASB 2019-7

o AASB 2019-8

o AASB 2020-1

o AASB 2020-2

o AASB 1060

Positive feedback from the FRC and the stakeholders 

Tracking well

Financial Reporting Council

· FRC approved Due process, Corporate Plan 2019-2020, Education Strategy, Evidence-informed strategy and International Strategy in November 2019.

· No negative feedback in response to due process from FRC.

Feedback from stakeholders

· Feedback indicated that the proposed effective date for AASB 2020-2 and AASB 1060 would not provide adequate time to prepare for implementation. The AASB therefore extended the effective date by 1 year.

Australian Taxation Office

· The AASB received positive feedback from ATO and some users regarding the due process followed for replacing Tier 2 supporting the proposals.

Evidence-Informed Standard Setting Framework

· At the September 2019 AASB Board meeting, the board approved the AASB’s Evidence-Informed Standard-Setting Framework and is available on AASB’s website.

· Ensures the AASB takes an evidence-informed approach, as seen by using the below Research Reports to help inform the Board on decisions.

Research Reports providing evidence in the removal of SPFS

The following reports provided evidence for the AASB in determining the issues with SPFS and ultimately leading to the removal of SPFS for certain entities:

· Research Report 12 Financial Reporting Practices of For-Profit Entities Lodging Special Purpose Financial Statements (August 2019)

· Research Report 11 Review of Special Purpose Financial Statements: Large and Medium-Sized Australian Charities (August 2019).

· Research Report 10 Legislative and Regulatory Financial Reporting Requirements (Updated August 2019)

Other Research Reports

Research Report 14Literature Review: Service Performance Reporting for Not-for-Profits (February 2020)

· Reviews both the Australian and international literatures for service performance reporting NFPs to support the AASB’s Management Commentary and Service Performance Reporting project.

Research Report 13 Parent, Subsidiary and Group Financial Reporting (October 2019)

· Concludes current financial reporting requirements applicable to for-profit parent/subsidiary structures do not warrant change at this time, however additional disclosures are required and will be advised to the IASB as part of post implementation review of AASB 12 separately

Remuneration Reporting and Management Commentary

· Benchmarking reports planned to provide evidence in issues and solutions for respective projects, expecting to progress.

Regulatory Impact Statement

· RIS process to analyse the costs and benefits for AASB 2020-2 and AASB 1060 (see above) completed and approved by Treasury in Q1 2020.

Strategy 1,3,4 

PBS Outcome 1 

Program 1 

Deliverables 1,2 

· Post-implementation reviews conducted (PIR) for all significant projects to assess quality of standard-setting

· No significant changes needed

· PIR feedback is acted upon

· No evidence not contributing to the confidence in the economy.

· Feedback from ASIC, APRA, ACNC surveillance reviews does not indicate loss of confidence due to accounting standard issues

· No significant decline in relevance of financial statements in the capital market

Not started

Tracking well

Tracking well

Tracking well

Tracking well

PIR

· None as of yet for this period

Confidence in the economy

· No indication of non-contribution to confidence in the economy

Surveillance reviews

· ASIC’s review of 30 June 2019 reports indicated 4% of material restatements. The report stated focus is needed on impairment of non-financial assets, AASB Research Report 9 discusses IAS 36 Impairment of Assets.

No significant decline in relevance of FS in capital markets

· The research report by Stephen Taylor How informative are Australian firms' earnings indicates that there was no shift in pricing of shares due to standards issued previously

Strategy 7 

PBS Outcome 1 

Program 1 

Deliverables 10,11 

· Improve consistency of implementation:

· Educate stakeholders on the AASB standards, support materials available, including why standards introduced

· Support and encourage high quality teaching of the Australian financial reporting framework and standards at Australian educational institution

· Education initiatives, such as webinars, providing appropriate educational materials to key stakeholders for all significant projects

Tracking well

Education Strategy

· Education Strategyapproved by FRC at the November 2019 meeting.

Webinars

All webinars are used as both a means to educate stakeholders, as well as a tool to receive feedback.

· ED 293 Amendments to AASB 1054 – 132 attendees in July 2019

· ED 291 NFP definition and guidance – 158 attendees in August 2019.

· ED 295 Simplified Disclosures for Tier 2 entities – 167 attendees in November 2019.

· ED 297 Removal of SPFS – 147 attendees in November 2019.

· Accounting for Research Grants – 174 attendees in December 2019.

· General Presentation and Disclosures (with IASB) – 133 attendees in March 2020.

Roundtable events

· AASB hosted a series of roundtables across 5 cities for the for-profit and not-for-profit sectors regarding ED 297 and ED 295 in order to educate and receive feedback from stakeholders in October 2019.

· The sessions were also attended by representatives of Treasury, ATO, ASIC and ACNC.

Other educational initiatives

· ‘7-key facts’ was prepared and provided to the public by the AASB, highlighting the key points for ED’s 293, AASB 2020 and AASB 1060 to help stakeholders understand the ED and the standards.

· Education plan consisting of webinar, podcasts and targeted education materials (booklets) for AASB 1060 and AASB 2020-2 in progress.

· The Board decided at the April 2020 Board meeting to issue additional educational material addressing the impact of COVID-19 in certain areas.

· Staff paper updated reflecting the extent and rationale of modifications made to Australian Accounting Standards in the NFP and Public sector.

AASB Updates

AASB Staff presented a general AASB Update at the CPA Congress at multiple locations in November 2019.

· FAQs, illustrative examples, staff publications developed on significant interpretive issues

Tracking well

FAQ

In March 2020 the AASB and AUASB released a joint FAQ on the Impact of Coronavirus on Financial Reporting and the Auditor’s Consideration to provide guidance on some of the issues financial report preparers and auditors should consider

· FAQs on AASB 15 Revenue from Contracts with Customers, AASB 1058 Income of Not-for-Profit Entities and AASB 16 Leases was updated to clarify Chart 3 – Research Findings analysis of how paragraph 35(a) of AASB 15 applies, and by adding new examples to assess whether a transfer of goods or services occurs under research grants.

· FAQs further updated in February 2020, read here.

Illustrative Examples

· AASB 2019-6 issued in December 2019 includes amendments to illustrative examples 4A and 4B accompanying AASB 15 Revenue from Contracts with Customers to clarify the analysis of how paragraph 35(a) of AASB 15 applies.

· Illustrative examples and implementation guidance included in AASB 2019-4

Staff Publications

The AASB and AUASB released a joint publication in May 2020 on the Impact of COVID-19 on Going Concern and Related Assessments which provides and overview of directors’ and management’s duties in respect of assessing the solvency and going concern. The publication also provides an overview of an auditor’s obligations in relation to going concern and directors’ declarations of solvency.

· Feedback from ASIC, APRA, ACNC surveillance reviews indicate no significant interpretive issues impacting the consistency of implementation

Tracking well

· AASB addresses research grant issues through amendment to standard and FAQs

· ASIC Surveillance review mentioned above.

· Positive stakeholder feedback on 7education initiatives

Tracking well

· Positive feedback received from domestic stakeholders onAASB-AUASB joint FAQ on Coronavirus released in March 2020

After the October roundtables on ED 295 and ED 297, surveys were completed by participants:

· How valuable did you find this event?

o FP participants = 4.6/5

o NFP participants = 4.2/5

· How helpful was the presentation?

o FP participants = 4.3/5

o NFP participants = 4.4/5

· How did you find the length of the event?

o FP participants = 100% just right

o NFP participants = 90% just right, 5% too short and 5% too long

3 common questions were asked to participants for 4/5 of the webinars this financial year:

How was the quality?

o Excellent = 37%

o Good = 52%

o Average = 9

o Poor = 2%

How helpful was the content?

o Very helpful = 19

o Helpful = 75%

o Not helpful = 6%

Did the presenters meet your expectations?

o Yes = 93%; No = 7%

Strategy 4 

PBS Outcome 1

Program 1 

Deliverables 12,13 

KPIs 3,5 

Enhance stakeholder engagement 

· Key stakeholders identified by 30 June 2020 and planned program of engagement executed as planned

· Improving Net Promoter Score

· Positive stakeholder feedback on the consultation process

· Increase in engagement results (newsletter, website, LinkedIn, Twitter, webinar, outreach numbers)

Tracking well

Key stakeholder identified

· Consideration of stakeholders and how to engage with them is part of long-term project plans for significant projects

Stakeholder Survey

· Stakeholder Survey results received in October 2019 enabling AASB to benchmark stakeholder engagement going forward.

Stakeholder Engagement Improvement

· Number of AASB newsletter subscribers increased by 113.48% over the twelve months to April 2020.

· Number of LinkedIn main page followers increased by 151.18% over the twelve months to April 2020.

· Number of twitter followers increased by 11.31% over the twelve month to April 2020.

Strategy 4 

PBS Outcome 1

Program 1

Deliverables 15

KPIs 5

Conduct Agenda consultations to determine projects and priorities

· Agenda consultation conducted every 3-5 years

Not started

· Not yet started due to awaiting IASB agenda consultation that has been delayed as a result of COVID-19.

· IASB expecting to release request for information in H1 2021 for IASB agenda consultation

Strategy 8, supporting Strategies 1-7

PBS Outcome 1

Program 1

Develop and implement People and Culture (P&C) strategy to develop high performing team

· Employee survey - improving Net Promoter Score, “the place to be”, employee engagement

· High performance team as measured by Board and stakeholder feedback on delivery of program and all other measures of success

Tracking well

· Ongoing process

· Have recognised and celebrated employees who have successfully completed probationary period

· Team Building event undertaken on 7 March 2020, excellent event and participation by majority of AASB staff

· Decision to instigate working from home taken on 16th March 2020, with all AASB Staff working from home since 17 March 2020

· High Team morale existing currently whilst Working from Home

New starter processes improved to support flexible subject matter expert involvement

· New team members embedded successfully within six months by 30 June 2020 as measured by internal and external stakeholders’ feedback

Tracking well

· Staff are currently preparing an onboarding manual which aims to improve the new starter process. The onboarding manual is a working document which has insights and information regarding processes that take place at the AASB.

Understand current capability (talent mapping)

· Ability to timely identify when/where to buy or borrow capability by 30 June 2020

Tracking well

· Ongoing process

Resource planning to develop skills and allocate them appropriately

· KPIs for all employees

· Leveraging diversity of skills and people as measured by employee and Board feedback and delivering an agreed program of work

· Retain core group of technical experts and leaders

· Fair allocation of workload measured by employee and Board feedback

Tracking well

· Skills mapping process to be run across AASB

· Utilisation rate of all employees to be examined and time sheeting currently being piloted to determine the suitability for developing utilisation and workload allocation modelling

· Timesheet showing high utilisation of employees

Strategy 8, supporting Strategies 1-7

PBS Outcome 1

Program 1

Develop and implement an IT strategy that enables flexible, seamless working via cloud 

· Independent of Productivity Commission hardware by 30 June 2021

· IT supports flexible work including remote locations measured by employee satisfaction

Tracking well

· July 2019: Office 365 implemented for Email and file share (OneDrive) to enable remote working

· November 2019: Technology and Site inspection of NZ XRB

· December 2019:

-Quote received from CCSSC for Payroll and Finance migration – ongoing cost of ownership significantly greater than current expenditure

-Discussion with external specialist on SharePoint implementation

· Since Working from home, new technology platforms trialled, tested and implemented

· AASB hosted two virtual roundtable sessions using Zoom for ED 298. An IASB member and staff participated on the presentation from a separate location than all working from home based AASB Staff

· All AASB staff provided with additional 4G device to ensure working remotely possible even when local broadband is congested

Strategy 4,8 

PBS Outcome 1

Program 1 

Customer relationship management tool selected and implemented 

· Appropriate CRM tool selected and implemented by 30 June 2020

Tracking slowly but no major issues

· Stakeholder Database cleanse complete

· Quotation received for development of database structure that can be implemented within the Office365 application suite. CRM tool to be completed for testing before the June Board meeting.

Strategy 4,8 

PBS Outcome 1

Program 1

Deliverables 12

KPIs 5

Website redesigned to improve stakeholder experience and engagement

· Obtain funding to improve website by 30 June 2020

· Website experience improved as measured by stakeholder feedback

Tracking slowly but no major issues

· Urgent Maintenance project underway to replace CMS, expected to be complete prior to financial year end.

Strategy 8, supporting Strategies 1-7

PBS Outcome 1

Program 1

Develop strategy supporting operational excellence and regulatory compliance

· Strategy created and implemented by 30 June 2020 

· Complied with regulatory obligations

Tracking well

· September 2019: Unconditional Audit Opinion conferred by Auditor (FY 2018/19)

· October 2019: Corporate Plan approved by Board

· November 2019: FRC Approved Corporate Plan

· Continuous Compliance tasks completed by appropriate deadline date

· No breaches regulatory obligations unidentified

Key processes and standards documented

· Processes and standards identified, created and communicated by 30 June 2021

Tracking well

· HR Operational Policies externally validated by HR Professional and implemented

· Technical team internal on-boarding manual documenting key process and continuously updated

· FP and NFP standard setting frameworks, Due process document and corporate plan externally issued and on public website

· All Finance procedures and policies are documented and updated at least annually

· Tasks due dates and responsibility documented in Asana project management software

· FMCS used to manage compliance tasks

Knowledge and information sharing support flexible subject matter expert involvement

· Knowledge sharing forums created by 30 June 2020

· Key knowledge imparted across teams within six months of joining

Tracking well

· Staff participate in monthly lunch and learn sessions to share knowledge from matter expert

Continuous improvement of operational processes to achieve planned outcomes

· Continuous improvement schedule created and embedded to enable acting upon by 30 June 2020

Tracking well

· September 2019: Managing Director engaged

· October 2019: Examination of operational areas including Policy and workflow

· November 2019:

-HR, IT and Technical Work program areas to be focused on first

-Portfolio (Program) team implemented to improve technical project management and resource allocation

· December 2019: Operational (HR) Policies implemented

· March 2020: Remuneration Strategy session including annual performance review process presented to and shared with all staff

· Working from home has focused AASB on ensuring critical operational tasks and processes can be sustained remotely.

· Core operational tasks being monitored and improved to ensure no slippage in internal and external service delivery

Strategy 8, supporting Strategies 1-7

PBS Outcome 1

Program 1

Develop a strategy to improve program and project management

· Create and implement the strategy by 30 June 2020

Tracking well

· Fortnightl Portfolio Team meetings scheduled to examine workflow, resourcing, and prioritisation of projects.

· Continuous review process implemented to access completion of projects (on target, off target) as well as reviewing effort required to complete

· Time sheeting process being used to refine new project plans (work effort required) as well as ensuring work-life balance is maintained

Identify and establish frameworks and processes to allocate resources appropriately, establish and monitor accountabilities

· Project management processes and frameworks identified, created and embedded by 30 June 2021

· Communicated processes and frameworks so team members are clear and deliver on expectations

· Work-life balance in completing projects as measured by employee feedback

Tracking well

Allocate resources efficiently and effectively

· Deliver agreed program of work as planned

Tracking well