AUSTRALIAN ACCOUNTING STANDARDS BOARD …

1 AUSTRALIAN ACCOUNTING STANDARDS BOARD 19 June 2003 AUSTRALIAN ACCOUNTING STANDARDS BOARD Level 3, 530 Collins Street, Melbourne Victoria 3000 Postal address: PO Box 204, Collins St West, Victoria 8007 Telephone: (03) 9617 7600 Facsimile: (03) 9617 7608 Website: DX 30897 Document Exchange E-mail: AASB Welcomes Issue of IASB Standard Ruth Picker, AASB Acting Chairman welcomed the issue of ifrs 1 First-time Adoption of international financial reporting STANDARDS by the IASB and announced that the AASB cannot, for the time being, issue an AUSTRALIAN equivalent to ifrs 1 as part of the Year 2005 strategy for the adoption of IASB STANDARDS .

2 Ruth Picker said that: Before the AASB can issue an AUSTRALIAN equivalent to ifrs 1 issues relating to the status of the copyright in IASB STANDARDS and impediments to making legislation that includes cross references to legislation that will be made in the future must be resolved. In respect of copyright Ruth Picker explained that ACCOUNTING STANDARDS made under the Corporations Act by the AASB are delegated legislation and under Government policy legislation should be made freely available. The IASB has copyright in its STANDARDS and where the AASB issues an AUSTRALIAN equivalent to an IASB Standard the AASB needs to observe that copyright.

3 Ruth Picker said that the AASB is presently negotiating arrangements with the IASB and anticipates that issues relating to copyright will soon be resolved. The Acting Chairman also explained that in making STANDARDS , which are disallowable instruments, the AASB must comply with the Acts Interpretation Act 1901. The BOARD has been advised that under this Act a disallowable instrument can only make cross references to other instruments that are in existence when it is made. Making an AUSTRALIAN equivalent to ifrs 1 brings this issue into sharp focus because ifrs 1 refers to a number of IASB STANDARDS that the AASB expects to issue as AASB STANDARDS in implementing the Year 2005 strategy.

4 The existence of this impediment means that the BOARD cannot formally make ACCOUNTING STANDARDS that contain cross references to ACCOUNTING STANDARDS that have not yet been made. Accordingly, the BOARD cannot make an AUSTRALIAN equivalent to ifrs 1 until each of the ACCOUNTING STANDARDS to which it refers has been made. In order to make information available to constituents as soon as possible, the BOARD is exploring ways of making available the substance of the STANDARDS subject to the impediment before they are formally made. The Chairman said that: The IASB has announced that all STANDARDS operative for 2005 will be issued by 31 March 2004.

5 The BOARD plans to make and issue AUSTRALIAN equivalents to IASB STANDARDS operative for 2005 as soon as practicable after the IASB has issued STANDARDS . The timing of issuing AUSTRALIAN equivalents to IASB STANDARDS , in large part, depends on the timetable of the IASB. _____ For further information: Ruth Picker, AASB Acting Chairman (03) 9288 8620 Angus Thomson, AASB Technical Director (03) 9617 7618 international ACCOUNTING STANDARDS BOARD Press Release 30 Cannon Street, London EC4M 6XH, United Kingdom Telephone: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: Web.

6 FOR IMMEDIATE RELEASE 19 June 2003 IASB ISSUES A STANDARD ON TRANSITION TO international financial reporting STANDARDS Following recent decisions by various jurisdictions to adopt international financial reporting STANDARDS (IFRSs), more than 90 countries will either require or permit the use of IFRSs during the next five years. Thousands of companies throughout the world will be making a transition in financial reporting by breaking away from national practices and changing to ACCOUNTING STANDARDS set by the international ACCOUNTING STANDARDS BOARD (IASB).

7 To help companies making this change, and to enable users of company reports to understand the effect of applying a new (in some cases, completely new) set of ACCOUNTING STANDARDS , the IASB today issued ifrs 1 First-time Adoption of international financial reporting STANDARDS , which explains how an entity should make the transition to IFRSs from another basis of ACCOUNTING . The IASB through ifrs 1 has sought to address the demand of investors to have transparent information that is comparable over all periods presented, while giving reporting entities a suitable starting point for their ACCOUNTING under IFRSs.

8 In developing the standard, the IASB consulted interested parties throughout the world and paid particular attention to the need to ensure that the cost of compliance with the new requirements does not exceed the benefits to users of the financial information. The standard is based on the proposals published as an exposure draft ED 1 in July last year, and contains changes that the IASB has made in the light of the 83 comment letters it received. ifrs 1 requires an entity to comply with every IASB standard in force in the first year when the entity first adopts IFRSs, with some targeted and specific exceptions after consideration of the cost of full compliance.

9 Under ifrs 1, entities must explain how the transition to IASB STANDARDS affects their reported financial position, financial performance and cash flows. Introducing the standard, Sir David Tweedie, IASB Chairman, said: ifrs 1 is very timely, because demand is growing for high quality international STANDARDS set by the IASB. Thousands of companies throughout the world will be required to adopt IFRSs in the coming years, and the requirements in ifrs 1 are designed to ease the transition for all concerned and to ensure that users of accounts are given high quality information.

10 This is the IASB s first completely new standard several more will follow in the next year. We re on our way! Sir David also emphasised the role that national bodies play in the IASB s deliberations: The French Conseil National de la Comptabilit (CNC) has participated actively and has made a significant contribution in the development of ifrs 1. The IASB has benefited greatly from its input. Copies of ifrs 1 First-time Adoption of international financial reporting STANDARDS (ISBN 1-904230-19-9 (three-part set) are available, at 15 each ( 24/US$23) including postage, from: IASCF Publications Department, 1st Floor, 30 Cannon Street, London EC4M 6XH, United Kingdom.)