Change your mindset [International accounting standards and franking.]

Many companies and advisers have been busily working to prepare themselves for the implementation of the new international accounting regime (AIFRS). It's only now that many of the non-accounting consequences of the transition are being identified and considered. Accountants may find that AIFRS...

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Bibliographic Details
Published in:Intheblack 2005-06, Vol.75 (5), p.66-67
Main Authors: Mason, Stef, Andrew van Dinter
Format: Magazinearticle
Language:English
Subjects:
AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards
Accounting
Accounting standards
Australia. Income Tax Assessment Act 1936
Case studies
Companies
Corporate profits
Defined benefit plans
Dividends
Financial reporting
Financial statements
Foreign exchange
Income tax law
International accounting standards
International Financial Reporting Standards
Profits
Retained earnings
Shares
Superannuation
Tax assessments
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Summary:Many companies and advisers have been busily working to prepare themselves for the implementation of the new international accounting regime (AIFRS). It's only now that many of the non-accounting consequences of the transition are being identified and considered. Accountants may find that AIFRS-based accounting policies used to prepare open balance sheets may differ from those previously used. AASB1 - First Time Adoption of Australian Equivalents to IFRS - prescribes that adjustments must be recognised directly to retained earnings, or, where appropriate, another category of equity. Whenever an accounting standard prescribes a treatment that impacts retained earnings, it's essential to consider the wider implications that it may have for the organisation and shareholders. As a result of transition to AIFRS and the requirement to recognise certain adjustments to retained earnings a company may be unable to frank the whole or part of distributions made out of retained earnings if it contains profits relating to the revaluation of assets that have not yet been disposed of by the company.
ISSN:1832-0899