G100 represents CFOs in Australia with the mission of leading the national debate on critical financial and business issues which impact on business performance, regulatory oversight and the nation’s competitiveness. The External Reporting Working Group (ERWG) supports this mission by providing thought leadership on external reporting matters of importance to G100 members.
The ERWG has continued to meet every month this year. As expected, the major topic of discussion has been the response from members’ organisations to the COVID-19 crisis. The discussion has included both the practical aspects of running the finance function remotely as well as the financial reporting implications.
At the most recent meeting on May 26, members discussed several considerations for year-end reporting. Common themes were:
- impairment testing (including the need to consider multiple scenarios);
- the impacts of volatility in commodity prices (in particular fuel);
- the recoverability of receivables/measure of expected credit loss provisions;
- volatility in discount rates (particularly negative yields);
- the need for enhanced disclosures in financial statements; and
- fair value measurement.
The following pronouncements/publications were also discussed:
- The joint guidance issued by the AASB & AUASB on Going Concern.
- Leasing and the IASB approval of the IFRS 16 amendments in May. The adoption of the amendments, treating certain reductions in lease payments not as lease modifications is voluntary, and the applicable date for amendments has been extended to June 30 2021.
- Alternative profit measures: ASIC has updated their guidance on alternative profit measures in the context of potential ‘extraordinary’ disclosures preparers may be interested in considering the circumstances of COVID-19. The guidance confirms ASIC’s firm stance on specific COVID impact-related disclosures.
- The continuous disclosure amendments to the Corporations Act recently announced are creating a more significant hurdle for potential litigation from reporting. Currently, CA-ANZ is working with the CPA on joint guides for disclosures with an upcoming training session on critical COVID-19 related issues.
Members further discussed ongoing challenges with impairment testing and valuation input difficulties. It was noted that ECLs were a focus for members for the March half year-end. Impairment, fair value measurement and additional disclosures, are other areas of concern.
In general, due to the diversity of the membership base, the G100 will not usually attempt to prepare detailed consensus responses to regulators on their various proposed changes/requests for comment. Answers are to be kept to high-level principles-based remarks in line with the G100’s strategic pillars.
Current membership of ERWG is as follows:
- Simon Cammell – Australia Post
- Katie Berry – Aurizon
- Adam Sofoulis – Wesfarmers
- Anne Battilana – Bendigo Bank
- Amir Ghandar – ANZ
- Kevin Fitzgibbon – Origin
- Andrew Pruys – Australia Post
- Robert Ramsay – Brambles
- Russell Macfarlane – Qantas
- Russell Oborne – Bluescope Steel
- Wayne Armour – Bluescope Steel
- Nicole Leith – NAB
New members are always welcome!