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Monthly roundup - February 2012

Staying on top of developments

Author: Deepesh Malik and Debbie Hankey, Accounting Technical Group

February 2012 edition
Issued 05 March 2012

In this edition:

Monthly highlights

AASB discussion on MRRT and Carbon pricing issue

Mineral Resource Rent Tax (MRRT) reporting issues

At the recent Australian Accounting Standard Board (AASB) meeting held on 15-16 February 2012, the Board considered the following financial reporting issues in relation to the MRRT:

Issue 1: Scope of AASB 112 Income Taxes - The Board indicated that the proposed Australian MRRT is within the scope of AASB 112. The existing guidance in AASB 112 and in AASB Interpretation 1003 Australian Petroleum Resource Rent Tax (PRRT) is sufficient to ensure that no significantly divergent interpretations would arise in practice, and hence this issue was not added to its work program.

Issue 2: Substantive Enactment of Resource Rent Tax Bills - The AASB considered the issue of substantive enactment of the proposed Minerals Resource Rent Tax Bill 2011 and Petroleum Resource Rent Tax Assessment Amendment Bill 2011 (the ‘resource rent tax Bills’), particularly as the resource rent tax bills had passed the House of Representatives on 23 November 2011, but not the Senate at the date of the AASB meeting.

The Board noted that AASB Interpretation 1039 Substantive Enactment of Major Tax Bills in Australia is sufficient to address this issue, and the Board does not expect any significantly divergent interpretations to arise in practice. Consequently, the AASB decided not to add this issue to its work program.

Issue 3: Accounting for the starting base allowance market value uplift in the proposed resource rent tax Bills - The AASB reached a tentative agenda decision, which relates to recognising deferred tax assets arising from adjustments to the tax base of an asset as a result of the MRRT.

The decision has not been finalised, as the AASB noted that this issue may also be considered by the IFRS Interpretations Committee (IFRIC). The IFRIC has received two agenda item requests relating to the same issue, and the AASB decided to monitor the IFRIC’s deliberations to assess whether the IFRIC is likely to arrive at a timely resolution of the issue.

Financial Reporting Implications of a Carbon Tax

In the October 2011 meeting, the AASB had discussed its approach to issuing guidance on accounting for the carbon pricing scheme which will be effective in Australia from 1 July 2012. The AASB had noted the merit of publishing a staff paper that would draw out the relevant accounting issues during the fixed price phase. It will not issue an Interpretation in the hope that the International Accounting Standards Board (IASB) will develop guidance on accounting for emissions trading schemes before the flexible period comes into effect from 1 July 2015.

In the recent February 2012 meeting, the AASB staff presented a paper analysing the accounting issues for emitter entities in the fixed price phase of a Carbon Price Mechanism. The Board noted that possible financial reporting implications for the Government would be discussed at a future meeting, after the result of external research commissioned on the subject becomes available.

The Board requested that the staff incorporate further discussion of the nature of purchased and free permits which may need to be accounted for differently due to the differences in underlying rights attaching to the permits.

Deloitte's Guide to IFRS Reporting

The latest edition of Deloitte's 'iGAAP 2012 — A Guide to IFRS reporting' is released. It provides guidance on a range of issues with analysis of key considerations for reporting entities coupled with clear and unambiguous explanation of IFRS requirements. The guide provides insight into how complex practical issues should be resolved and illustrative examples to demonstrate how the standards work in practice (IAS plus article)

Orders for this guide may be placed via

New pronouncements

(A listing of new accounting standards, interpretations, exposure drafts, discussion papers and similar documents issued during the month by the AASB and IASB/IFRIC, along with other IFRS-related documents by other bodies that may be of interest and related links to Deloitte publications and alerts. See also our What’s new in the December 2011 financial reporting cycle summary.)

International Accounting Standards Board (IASB)
Pronouncement Key dates More information

New editorial corrections to IFRSs*

The IASB posted to its website on 23 February a new batch of Editorial Corrections to IFRSs.

As minor editorial corrections, these changes are effectively immediately applicable Editorial Corrections to IFRSs (PDF 377kb)

* Equivalent pronouncement not yet issued by the AASB

Australian Accounting Standards Board (AASB)
Pronouncement Key dates More information
No new significant pronouncements were issued by the AASB in February 2012.    

Standard setter meetings

(A listing of meetings of various standard setters during the month or where documents were issued during the month in respect of the previous month’s meetings, with links to our analysis, agenda papers and so on)

Meeting Highlights More information
AASB regular meeting
15-16 February 2012

Key issues discussed include:

  • Financial Reporting Implications of a Carbon Tax
  • Tentative Agenda Decisions on the Proposed Resource Rent Tax Bills
  • Review of AASB 1031 Materiality
  • Control in the NFP Public and Private Sector
  • Service Performance Reporting Project
AASB alert (PDF 50kb)
IASB regular meeting
27 February-02 March 2012

Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic):

  • Insurance contracts (27 Feb; 28 Feb)
  • Financial instruments — Classification and measurement (28 Feb)
  • Financial Instruments - Impairment (28 Feb)
  • Leases (29 Feb)
  • Financial instruments — Macro hedge accounting (01 March)
  • IAS 27/IAS 32 — Put options over non-controlling interests (01 March)
  • IFRIC 15 — Meaning of continuous transfer (01 March)
  • IFRIC issues (01 March)
  • IFRIC agenda rejection notices (01 March)
  • Annual improvements — 2009-2011 cycle (02 March)
  • Annual improvements — 2010-2013 cycle (02 March)
Detailed Deloitte Observer notes


New Deloitte publications

(Key IFRS-related and other publications issued by Deloitte during the month, not covered elsewhere. You can find full details and back issues of our various publications by following these links: Accounting alerts, IAS Plus publications, IFRS in Focus Newsletters, Webcasts, and Podcasts)

IFRS publications
Other publications of interest
  • The Bruce Column 'Independence, Eligibility, and the IASB ' discusses the report on the review of the IFRS Foundation’s governance by its Monitoring Board (the securities markets authorities responsible for monitoring the activities of the IFRS Foundation).
Deloitte Webcasts and Podcasts

Other developments

(A brief listing of other financial reporting developments during the month. A full summary of all IFRS-related developments can be found in our February historical summary on IAS Plus. You can also subscribe to our Deloitte IAS Plus RSS feed to be kept informed of developments as they happen)

Australian-specific topics
  • The Treasury has announced its intention to wind up the Financial Reporting Panel (FRP) and that legislation amending the Corporations Act 2001 to effect this decision will soon be introduced into Federal Parliament (Media release)
  • The Treasury has indicated further reforms to the Corporations Act 2001 to strengthen Australia's executive remuneration framework. The proposals are based on the recent consultation on the 'clawback' of the bonuses and the recommendations made by the Corporations and Markets Advisory Committee (CAMAC) to improve disclosure in remuneration reports (Media release)
  • The Australian Securities & Investment Commission (ASIC) has released the review findings of the remuneration reports for the year ended 30 June 2011. It has identified certain areas where disclosure about remuneration arrangements could be more effective, and have included some of the better examples of disclosures to assist preparers.
International Accounting Standards Board
  • The IASB has released an updated work plan, dated 1 February 2012, incorporating the impacts of recently issued pronouncements and outlining revised 'current best estimates' for its various projects (IAS plus article).
External webcasts and Podcasts
  • Joint IASB-FASB webcast (29 February 2012, link to IASB website) discusses the main issues from the outreach on the revised exposure draft Revenue from Contracts with Customers (November 2011)
  • Webcast on the proposed IFRS Taxonomy 2012 (02 February 2012, link to IASB website) - The IFRS Taxonomy prepared by the IFRS Foundation represents IFRSs as issued by the IASB (and common practice elements). The application of the Taxonomy depends on the regulators
  • January 2012 IASB meeting podcast (mp3) – summary of the IASB regular meeting held on 25-27th January 2012. The topics covered include IFRS 9 classification and measurement, macro hedge accounting, impairment, insurance contracts, agenda consultation and effective dates.
Other global news
  • The European Financial Reporting Advisory Group (EFRAG) has issued a feedback report regarding field-tests on implementing IFRS 10, IFRS 11 and related disclosures in IFRS 12 (IAS Plus article)
  • The NZ External Reporting Board (XRB) has released the final proposals for implementing a multi-standards accounting framework for financial reporting purposes in New Zealand (XRB communiqué)
  • The International Valuation Standards Council (IVSC) has launched a project on the valuation of financial derivatives, which aims to examine the factors that influence the value of these instruments and how these are reflected in the models most commonly used for valuing them (IAS Plus article).

Related links

Related links

  • Monthly roundup - October 2012
    Financial reporting developments during October 2012. Monthly highlights discuss the recently issued investment entity consolidation amendments by the IASB; and the developments in the IASB lease project
  • Monthly roundup - July 2012
    Financial reporting developments during July 2012. Monthly highlights discuss the financial reporting implications of tax ruling on frankable dividends, IASB revised work plan and Transitional relief and guidance on IFRS 10, IFRS 11, and IFRS 12
  • Monthly roundup - November 2011
    Financial reporting developments during November 2011. Monthly highlight is the discussion on the revised exposure draft on revenue
  • Monthly roundup - July 2013
    Financial reporting developments during July 2013. Monthly highlights discuss the ASIC areas of focus for July 2013 reporting period.
  • Monthly roundup - June 2013
    Financial reporting developments during June 2013. Monthly highlights discuss the ASIC areas of focus for June 2013 reporting period.
  • Monthly roundup - March 2011
    Financial reporting developments during March 2011. Monthly highlight discusses the updated IASB work plan, ASIC's proposed guidance on additional financial information and a joint UK/NZ project to reduce disclosures under IFRS.
  • Monthly roundup - March 2009
  • Monthly roundup - November 2010
    Financial reporting developments during November 2010. Monthly highlight discusses resources available for the December reporting season and the IASB's updated work plan issued late in the month.
  • Monthly roundup - August 2010
    Summary of developments in financial reporting during August 2010. Monthly highlight discusses the possible impact of changes in the IASB and FASB chairs on global standard setting.
  • Monthly roundup - June 2010
    Summary of developments in financial reporting during June 2010. Monthly highlight discusses recent financial reporting reform.


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