The Australian Securities and Investments Commission (ASIC) has issued an amendment to the International Financial Reporting Standards (IFRS) to ensure companies disclose the impact of the new standards on their businesses.

It has also released a guide to give companies tips on how to prepare the disclosure documents required under the legislation.  

But ASIC Chief Accountant Greg Pound says companies choosing not to use the material won’t be breaking the law. “ASIC’s guide helps preparers of disclosure documents and their advisers by setting out our view of good disclosure,” he said.

Mr Pound says documents issued before a company’s first annual financial report prepared under IFRS should include information about the impact of adopting the new standards.

Nick Terry, a Deloitte client manager and IFRS expert, says it’s essential for companies to disclose the effects of adopting the standards.

“This is particularly important to any information on forecasts, because both the profit and net asset position have the potential to change dramatically under the new standards,” he said.

“So if your forecasts are based on current standards and go as far into the future as 2005… then these forecasts could be determined as meaningless as there will be no comparable data when that period arises as the actual numbers will be stated under the new standards.”

Mr Terry says the new addition to the standards – AASB 1047 – was fast-tracked, highlighting the importance of the new standards.