was issued for comment on 14 January 2009 and an Illustrative Example on 8

Was issued for comment on 14 january 2009 and an

This preview shows page 319 - 321 out of 354 pages.

was issued for comment on 14 January 2009 and an Illustrative Example on 8 April 2009. The Board received 13 submissions and conducted two Roundtables. The responses to the ED were mixed. General supporters for Phase 2 included HoTs and Departments of Treasuries around Australia, Finance and ACAG, who argued that GAAP/GFS harmonisation should be applied to Phase 2 entities to ensure that the data for the WoG and GGS was flowing through from the same basis at the entity level and that this was necessary to satisfy the FRC strategic direction. Opposition came from representatives of local governments, for-profit entities within the GGS, and academics. A main concern was the proposed presentation that would split the statement of comprehensive income into transactions and other economic flows, rather than retaining a net cost approach. Another common concern questioned the appropriateness of GAAP/GFS harmonisation at an entity level, as GFS was only applied at an aggregate WoG level. The submission can be accessed on the AASB website (AASB 2013). In July 2009, the AASB decided to pass the issue back to the FRC to reconsider Phase 2 of the project. In September 2009, the AASB discussed with the FRC a letter from PE A in Defence, outlining the benefits of GAAP/GFS harmonisation at the entity level “for the purpose of information” (AASB 2009). In October 2009, the AASB tentatively decided to issue mandatory guidance for entities within the GGS. The FRC, however, decided that this would not satisfy the strategic direction. As a result, the AASB decided to develop ED 212 Not-for-Profit Entities within the General Government Sector , which was issued on 5 July 2011. It received 29
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306 submissions and two Roundtables were conducted. The comments raised, again, concerns about the appropriateness of GAAP/GFS harmonisation and the AASB “decided there was an insufficient basis for proceeding with Phase 2 of the project. In December 2012 the Board issued a report to the FRC Public Sector Task Force outlining the history of the project, the due process followed by the Board and the basis for the Board’s decisions in relation to the FRC direction. The Task Force reviewed the report and at the March 2013 FRC meeting recommended that the FRC withdraw the GAAP/GFS Harmonisation project. The FRC has subsequently withdrawn the phase 2 directive re GAAP/GFS harmonisation.” (AASB 2013) One change was made in response to Phase 2, i.e., in May 2013, the budgetary reporting requirements were reallocated to a separate Standard AASB 1055 Budgetary Reporting . In essence, it requires budgets of controlled and administered that are presented to parliaments by Whole of Governments, General Government Sectors and entities within the GGS, the original budgeted financial statements should be disclosed and an explanation of the major variances should be disclosed (AASB 1055, pp. 5-6). In early 2013, the FRC and the AASB concluded the GAAP/GFS harmonisation project without requiring an application for GAAP/GFS harmonisation to any other entities than Whole of Governments and General Government Sectors.
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