External Reporting Working Group – June Meeting

The Group of 100 (G100) External Reporting Working Group (ERWG) has continued to meet every month this year. As expected, the major topic of discussion at the most recent meeting on June 23, was disclosure, investment property valuation and the members’ responses to the COVID-19 crisis.

The impacts arising from amendments to AASB 16 Leases (AASB 16) concerning rent concessions were discussed. While the amendments address accounting considerations for lessees, they do not provide changes or relief for lessors. The working group agreed the recent revision is addressing changes to the lessee and not lessor accounting, reflects a challenge in applying the standard consistently across a diverse group of organisations. 

Disclosure considerations were explored in the form of future cash outflow exposure arising from extension and termination options. An overview of the disclosure landscape was presented concerning the adoption of the requirements of the new lease accounting standard. The variability in the level of detail provided by organisations, including issues around future cash outflows, which lessees are potentially exposed to, was an area of concern.

The investment property valuation uncertainty due to COVID-19 was also explored. The key area of audit focus is the reliance on experts and disclaimers provided by them concerning advice on the value of assets, such as investment property or plant and equipment. This is of particular concern given the emerging market effects of the pandemic with the potential to affect disclosures in the financial statements.

The working group highlighted the ongoing challenges on the approach to discount rate methodology when applying to lease liabilities measured under AASB 16. 

The ERWG will take a break in July and resume the monthly meetings starting in August. To read the minutes of the last ERWG meeting, please click here.

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 
  • Deependra Kumawat – OZ Minerals

New members are always welcome!