The Australian Prudential Regulation Authority (APRA) has released the first of two discussion papers on its response to the implementation of the new International Financial Reporting Standards (IFRS).

Proposals in the paper relate to prudential implications of changes to the existing accounting standards including fair value measurement, financial assets for sale, excess of market value over net assets and employer-sponsored defined benefit super plans.

APRA Chairman John Laker says the regulator wants to align its prudential and reporting standards with IFRS “to the extent practicable”.

“In certain circumstances however, APRA’s prudential framework will depart from accounting standards where that is judged to be in the best interests of depositors and policyholders,” he said. “In shaping its approach, APRA will be taking into account the financial and prudential implications of IFRS for its regulated institutions, as well as international developments in this area.”

APRA anticipates the proposals in the discussion paper will take effect from January 1, 2006.