Part A Accounting Standard Setting, Regulation and Disclosure ACCOUNTING STANDARD SETTING (i) Do your own research and critically explain how the Australian Accounting Standards Board take part in the...

ACCOUTING STANDARD SETTING
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BUSINESS COMBINATION / ACQUISITION ANALYSIS
1. EXECUTIVE SUMMARY
This report will provide an insight to the basics of accounting standards and its requirement in the preparation of financial reports. It will also provide an understanding of the duties of Australian Accounting Standards Board and also their role in drafting the international financial reporting standards. It will also help in creating knowledge on the working principles of International Accounting Standard Board. Furthermore, this report will provide a brief idea regarding different types of entities and their reporting obligations. An in-depth analysis is also conducted on disclosure of business combinations using AASB 3. The report concludes by citing examples of disclosure and how the disclosure standards have been adopted by ASX companies in their annual report.
TABLE OF CONTENTS
· EXECUTIVE SUMMARY
· INTRODUCTION TO ACCOUNTING STANDARDS
· ROLE OF AASB IN SETTING IFRS
· RELAXATION OF IFRS AVAILABLE TO AASB MEMBER COUNTRIES
· EXAMINATION OF DIFFERENT FORMS OF ENTITY
· IMPLICATION OF THIS CLASSIFICATION - COMPLIANCE & REPORTING REQUIREMENT
· INTRODUCTION TO AASB 3 AND ASX COMPANIES
· EXAMINATION OF THE DISCLOURE
· COMPARITATIVE ANALYSIS OF COMPANIES
· CONCLUSION
· REFERENCE
· INTRODUCTION TO ACCOUNTING STANDARDS
Accounting is the language used by business organization to communicate their financial information to their interested parties. Organizations will differ depending on the size, nature, industry and their legal form. For the smooth running of these organizations, there are so many pre determined rules and regulations. However, these rules are drafted exclusively for the preparation of accounts of a single type of organization. It is a major issue among the stakeholders of the business and also to the entrepreneurs as it will not allow them to compare and consolidate different financial information of two or more different types of organizations.
The accounting standards are rules, principles and guidelines introduced to standardize accounting practices. It provides proper framework to make sure that the financial statements are uniform and meaningful to ease the interpretation and understanding. Adoption and usage of accounting standards are important for an organization as it will help in the prevention of fraud and improves the comparability of the financial information. An organization, while preparing their financial statements can follow either the accounting standards prescribed by their country or the international standards developed by IFRS.
    
· ROLE OF AASB IN SETTING IFRS
Before analyzing the role of AASB in setting the in developing the International Financial Reporting Standards, we must understand about AASB and its operations. AASB or the Australian Accounting Standards Board is an Australian government agency responsible for developing and maintaining financial reporting standards for the country as a whole. It is formed during 1991 under the Department of the Treasury (Australia). The AASB is responsible for formulating accounting standards for both the private and public sector entities in Australia.
IASB on the other hand is a part of the International Accounting Standards Committee Foundation (IASF), which is an independent London based private sector organization. AASB is a member of IASB and as a part of participation of the Australian community in the global economy; the AASB has contributed considerably to the development of global financial reporting standards and also to the financial requirement of this organization.
The IPSASB is a division under IASB focusing on drafting standards for the financial reporting requirements of national and local governments and all the public sector agencies. Since it is a member country, the AASB is using this information for the development and issuance of standards for the public sector of Australia.
· RELAXATION OF IFRS AVAILABLE TO IASB MEMBER COUNTRIES
As mentioned earlier, IASB is an independent agency focusing on the formulation of international standards for reporting financial information of both private and public sector entities around the world. To formulate effective standards, it is necessary for IASB to gather information regarding different circumstances and the working of world economy. To ease these procedures, IASB has included almost all the accounting standard setting agencies of different countries as their members. Presently, there are more than 120 members In IASB but only 90 countries among them have adopted the international standards for their financial reporting. It is not mandatory for the member countries of IASB to follow the IFRS because of two reasons.
Firstly, the standards developed by the IASB are in general nature because the state of economy of each country is different. So, the adoption of IFRS may not help the organizations to report their financial information as desired by their stakeholders. Secondly, the laws and regulations regarding the taxation and other responsibility are different in different countries. Therefore, if the IASB is making IFRS mandatory for its member countries, they will have to initially make the taxation and other laws uniform.
In addition to that, the main aim of IASB is to make a general guideline and standard rules for the reporting of financial information to make it more understandable and comparable. All the member countries are considering...