Welcome to our final edition of Beyond the Numbers for 2023. Nexia Edwards Marshall wishes all our readers a safe and joyful Christmas and a happy New Year. Beyond the Numbers will be back in February 2024.
Click on one of the Newsletter sections below:
The Federal Government announced its intention to merge the Australian Accounting Standards Board (AASB), the Auditing and Assurance Standards Board (AUASB) and the Financial Reporting Council (FRC) into a single body.
Details of the structure and composition of the new body have not been announced, nor has the Government yet released draft legislation to implement the change.
The Government claims that stakeholders will benefit from a single entity, helping to increase regulatory consistency, reduce red tape and unnecessary costs and avoid duplication. The Government intends that the new body will be operational by 1 July 2026, subject to the passage of legislation.
Nexia intends to respond to the draft legislation once it is released.
Nexia has issued its publication on the AASB’s Exposure Draft ED SR1 Australian Sustainability Reporting Standards – Disclosure of Climate-related Financial Information.
The ED SR1 includes three proposed Australian Sustainability Reporting Standards (ASRS):
ED SR1 is open for comment until 1 March 2024.
ED SR1 is available here.
The agenda and papers for the AASB meeting held on 29-30 November 2023 are available.
The board continued its deliberations on the following key matters:
The AASB and the AUASB have published an updated joint Research Report that identifies climate-related disclosures and associated assurance practices in the Annual Reports of ASX-listed entities.
The Report noted that climate-sensitive industries are more likely to disclose climate-related information and most disclosures are outside of the financial statements and are therefore not subject to audit.
Almost 43% of all ASX-listed entities reported climate-related information in their Annual Report or Corporate Governance Statement in 2022.
The Australian Charities and Not-for-profits Commission (ACNC) has published a Decision Impact Statement following an Administrative Appeals Tribunal (AAT) determination on a matter brought by Equality Australia Ltd.
Equality Australia Ltd had applied to the ACNC to be registered with the ‘Public Benevolent Institution’ (PBI) charity subtype. However, the ACNC refused the application because it considered that it had an independent, non-benevolent purpose of engaging in advocacy to agitate for law reform and social change, and this purpose did not amount to benevolent relief to people in need.
The AAT upheld the ACNC’s decision. Equality Australia has appealed to the Full Federal Court.
In November 2023, the Treasury released a Consultation Paper outlining the Government’s proposed sustainable finance strategy to assist this transition to net zero. This strategy is split into 3 pillars:
Feedback on the Consultation Paper will inform ongoing policy development and regulatory engagement.
ASIC has released its findings and insights from the Cyber Pulse Survey for 2023.
The results highlight four key areas for improvement in cyber security:
The survey indicates that organisations tend to be more reactive than proactive in managing their cyber security, emphasising the need for enhanced proactive measures.
As this is the season of giving, the Australian Charities and Not-for-profits Commission (ACNC) reminded charities to be mindful when partnering with third parties to undertake fundraising activities.
Charities are reminded of the risks associated with data protection and privacy of its donors, system hacking, and policies and procedures to deal with these risks. A set of national fundraising principles are going to be implemented across Australia in the coming months. One of these principles requires charities to act in accordance with privacy laws.
The ACNC Cyber Security Governance Toolkit has tips and various resources for every charity to help protect against threats.
In November 2023, the IASB considered various agenda items, including sweep issues related to presentation of profit or loss line items in accordance with draft IFRS 18 Presentation and Disclosure in Financial Statements. In this regard, the IASB tentatively decided to:
The IASB also continued discussion of proposed amendments to IAS 28 Investments in Associates and Joint Ventures including:
Details of other topics and IASB’s work plan updates can be found on the IASB website.
At its November 2023 meeting, the IASB decided to discontinue its Business Combinations under Common Control (BCUCC) project.
The Board noted that many stakeholders had sought clarity regarding the accounting for BCUCC transactions, but that the general practice in many jurisdictions was to adopt a book value (rather than an IFRS 3) approach to BCUCC.
The Board decided that the cost of continuing the project would outweigh the benefits of doing so.
The IFRS Interpretation Committee (IFRIC) has published its finalised agenda decisions on the following matters:
Volume 9 of the Agenda Decisions has been published on the IASB website.
The International Sustainability Standards Board (ISSB) has established a Transition Implementation Group to provide a public forum for any stakeholder to share implementation questions with the ISSB and to follow the discussion of those questions.
The TIG will inform the ISSB to determine what, if any, action will be needed to address those questions.
The Global Reporting Initiative (GRI), in partnership with the IFRS Foundation, has inaugurated the Sustainability Innovation Lab (SIL). Based in Singapore, SIL functions as a comprehensive capacity-building and research platform, catering to the needs of businesses in Asia and beyond. This initiative is designed to support companies in fulfilling their sustainability disclosure obligations by offering training programs, practical solutions, and fostering innovative thinking skills.
The SIL will serve as a collaborative space where GRI representatives, alongside those from the ISSB and other key stakeholders, work together to identify emerging topics in sustainability disclosure. This collaboration will extend to the development of concepts, promotion of best practices, and the creation of data-driven solutions. Additionally, the lab aims to enhance the capabilities of supply chains facing new information demands through targeted capacity-building initiatives.
Further updates on this project will be provided in due course.
Chartered Accountants Australian & New Zealand (CA ANZ) has prepared reporting guidelines aimed at assessing the social contribution or impact of the for-purpose sector, encompassing charities, not-for-profit entities and social enterprises.
Beyond conventional financial reporting, the for-purpose sector may furnish to external stakeholders a measure of its performance based on social impact and outcomes to meet reporting obligations stipulated in funding agreements or to ensure compliance with regulatory mandates.
The guideline outlines several key steps, including: articulating the reporting objectives, understanding stakeholders and their needs, identifying and measuring outcomes, incorporating outcomes into meaningful reporting, and refining and expanding the measurement and reporting of outcomes.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.