CONTENTS
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
.3 CHANGES IN
ACCOUNTING POLICIES
3.1 Impact of Adopting Australian
Equivalents to International Financial Reporting Standards
Australia will be adopting Australian
equivalents to International Financial Reporting Standards
(IFRS) for reporting periods commencing on or after 1 January
2005. SAFC will adopt these standards for the first time in the
published financial report for the year ended 30 June 2006.
Managing the process
In accordance with Treasurer’s
Instruction 19 Financial Reporting, the Chief Executive of SAFC
is responsible for ensuring that the annual financial
statements comply with Generally Accepted Accounting Principles
(GAAP). SAFC has commenced analysing the exposure drafts issued
by the AASB and has identified potential issues that may need
to be addressed. SAFC will develop an implementation and
adoption plan that will be reported to the Board Audit
Subcommittee to manage the transition to the new standards. The
plan requires the identification of:
• Major areas of accounting and
reporting differences resulting from adoption of the new
standards.
• Potential changes required to
financial systems
• Key dates for monitoring and
reviewing progress
SAFC will use the Model Financial Report
for SA Government entities developed by the Department of
Treasury and Finance (DTF) and keeping abreast of changes in
Accounting Standards, Treasurer’s Instructions and
Accounting Policy Statements (APS) by attending exposure draft
reference group meetings (facilitated by DTF) and information
forums organised by the DTF and professional accounting bodies.
Changes in Accounting Policy
A major change is the treatment of
accounting policy changes under the IFRS. These will now apply
retrospectively except for specific exemptions in accordance
with AASB 1 First-Time Adoption of Australian Equivalents to
IFRS.
Standing Timber Valuation
Both the Australian Equivalent and IAS 41
Agriculture require standing timber to be valued at Net Market
Value. SAFC is not anticipating a change will be required from
it’s Current Market Valuation method applied to its
estimated standing timber volumes.
Non-Current Asset Acquisition and
Recognition
The Australian equivalent to IAS 16
Property, Plant and Equipment is proposing that non-current
assets be revalued on an individual basis (as opposed to
current class basis). It is anticipated an APS will continue to
require revaluation on a class basis and current thresholds
(greater than $1m and estimated life is greater than 3 years)
will continue to apply.
Employee benefits
Employee benefits payable later than 12
months from year-end will be measured at present value rather
than at nominal amounts.
Income Tax
The Australian equivalent to IAS 12
Taxation is proposing a comprehensive method/balance sheet
approach to account for income tax. It is anticipated that a
Treasurer’s Instruction or APS will continue to mandate
the profit and loss approach currently adopted. Therefore it is
not anticipated that there will be a change in income tax
accounting policy for SAFC.
CORPORATE PROFILE
SOCIAL
ENVIRONMENTAL
ECONOMIC
FINANCIAL STATEMENT