Earlier this month, ASIC expressed concern about the preparedness of entities for the new accounting standards, as it outlined its focus areas for its 31 December 2018 financial reporting surveillance program.
“We are concerned that some companies may not have adequately prepared for the impact of new accounting standards that can significantly affect results reported to the market by companies, require changes to systems and processes, and affect businesses. We will monitor these areas closely and will take action where required,” said ASIC commissioner John Price at the time.
Speaking to Accountants Daily, BDO partner Aletta Boshoff said ASIC’s focus has seen a sharp increase in client activity as compared to a year ago.
“What we’re seeing in our client base is at the moment we are very busy assessing clients with impact assessments, implementations, and transition disclosures,” said Ms Boshoff.
“Everybody knows about this and a lot of clients have started to think about it but maybe the depth of the analysis of the potential impact is not what we would have expected and that’s where we are now getting involved.
“They have done some kind of an assessment and we’re starting to look at it and say hang on we have to look at it in more detail and depth and we may be putting their assessments to the test.”
According to Ms Boshoff, a particular pain point has come from AASB 15 Revenue from Contracts with Customer, with clients underestimating its impact.
“People underestimate the impact of AASB 15 at this stage and I think the reason is the devil is genuinely in the details,” said Ms Boshoff.
“Although they have done an impact assessment, there’s so much detail in IFRS 15 that when that impact statement is really put to the test, there’s often a number of areas where we have to do a bit more work.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.