Reasons Not Added (AD_AASB1049_GAAP-GFS_Harmonisation_GGS_Entities_5-13)

On balance, considering the mixed responses to the proposals in both Exposure Drafts, and the current ability for entities to adopt the proposals on a voluntary basis, the Board concluded, on cost/benefit grounds, that a Standard on GAAP/GFS harmonisation for entities within the GGS mandating the proposals could not be justified.  Further, the Board concluded that potential benefits relating to presentation and disclosure from pursuing the issue would most likely be overtaken by planned International Accounting Standards Board (IASB) work on a disclosure framework.

Furthermore, the AASB considered that even if the initial and ongoing costs of implementing the proposals were to be relatively insubstantial, the imposition of GAAP/GFS harmonisation on entities within the GGS through a Standard would not result in a substantive improvement in the quality of financial reporting by such entities.

The Board noted that the GAAP/GFS harmonisation project has been a priority of the AASB for a significant period of time and was of the view that its resources should now be focused on higher priority not-for-profit/public sector projects.

The Report of the AASB on Phase 2 of the GAAP/GFS Harmonisation Project (dated December 2012), which expanded on the above reasons, was considered by the FRC at its March 2013 meeting together with a recommendation from the FRC’s Public Sector Task Force (PSTF).  At that meeting the FRC accepted the AASB’s proposal not to proceed^[2].