The Australian Accounting Standards Board (AASB) will no longer require the reporting of individual KMP remuneration as currently prescribed in the accounting standards.
On 8 July 2011 the AASB issued AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements. AASB 2011-4 amends AASB 124 Related Party Disclosures with effect for annual reporting periods beginning on or after 1 July 2013. Early adoption is not permitted.
When the AASB first adopted International Financial Reporting Standards (IFRSs), it retained some pre-existing Australian disclosure requirements, including requirements for disclosures about the compensation, equity holdings and loans relating to individual key management personnel (KMP). After considerable due process and considering the views of Australian constituents, the AASB has decided to remove the individual KMP disclosure requirements for a number of reasons, including the following.
- Since adopting IFRSs, further requirements about individual KMP have been included in the Corporations Act.
- Disclosures about individual KMP are increasingly viewed as governance matters, and the aggregate disclosures about KMP in AASB 124 (IAS 24 Related Party Disclosures) are considered sufficient in the context of the role of accounting standards in meeting the objective of general purpose financial reporting.
- Removing the individual disclosure requirements will mean that Australian Accounting Standards are better aligned with IFRSs and with New Zealand accounting standards, which is consistent with the policies of the Australian and New Zealand governments on trans-Tasman convergence.
- Having individual KMP disclosure requirements in standards as well as the Corporations Act was confusing to many constituents.
In the period up to 2013 when AASB 2011-4 takes effect, the AASB says “the Australian government may consider amending the Corporations Act requirements on individual KMP disclosures”.
In effect, what they are saying is that, at a minimum, the Corporations Act references to the accounting standards in relation to KMP remuneration need to be amended. But the expectation is that the government will act on the CAMAC recommendations for further changes to the Act in relation to remuneration reporting (see HERE)
The implication is that government regulation on remuneration reporting will not be in effect before 1 July 2013. Otherwise there will be two types of remuneration reports to be provided. So, relax. You should not have to steel yourself for further remuneration regulation changes for at least a year.
The amendment to the standards can be found HERE© Guerdon Associates 2024 Back to all articles