ASIC has outlined its expectations about the nature and extent of disclosure required under Australian Accounting Standard AASB 1047 Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting Standards for 30 June 2005 annual financial reports.

The objective of AASB 1047 is to inform financial report users about the impact of changes in accounting policies arising from the implementation of International Financial Reporting Standards (IFRS) in the financial reporting period leading up to the first financial report prepared in accordance with IFRS.

AASB 1047 requires disclosure of:

• any known or reliably estimable information about the quantified impacts on the financial report had it been prepared using IFRSs; or
• if such impacts are not known or reliably estimable, a statement to that effect. In this case AASB 1047, suggests that entities should also update their disclosures made in 2004 about the management of the transition to IFRSs and the explanation of the key differences in accounting policies expected to arise.

ASIC will be reviewing compliance with AASB 1047 as part of its ongoing review of financial reports of listed entities.

Entities with 30 June year ends will publish their first IFRS financial reports for the half-year ended 31 December 2005 and for the year ended 30 June 2006.

The key new standards for financial instruments are AASB 132 and 139.