New Accounting Standards That Australian Businesses Should Prepare For
2018 is due to be one of the most expansive for the accountancy field, with no fewer than 37 new accounting standards due to begin from January. In order to prepare for the year ahead and what the new policies may hold, Accountant Ringwood are advising their clients to stay on top of the latest information as and when it comes in.
For those of you that already hire our services we’ll likely already be preparing to adhere to the new policies, but for those of you that are interested, here’s a closer look at some of the most prominent standards.
First-Time Adoption of Australian Accounting Standards
This standard is being introduced as of January the 1st 2018, and will apply to any new business that is hoping to establish itself within Australia. It details the need to adhere to AAS, or Australian Accounting Standards.
Share-Based Payment
Another policy due to be released in January of next year, share-based payment relates to any additional charges that may be accrued if a company shareholder receives a payment for their shares, as well as any extra fees that may need to be accounted for.
Business Combinations
This new policy is to help companies that are being charged within more than a single tax-bracket, or when dual-tax is required (even when one individual manages more than one company). The business tax will remain the same, but the new standard will define any expenses or personal allowances.
Insurance Contracts
This policy was issued in August of 2015 but will only come into action in early 2018. It defines the way in which insurance policies will work alongside accounting services, as well as compensation and other similar activities and processes.
Consolidated Financial Statements
For those that have previously consolidated their financial statements, they may have found additional charges being accrued as a result of mix ups within the system, or late repayments. This new standard can help an accountant to reorganise and correct a businesses’ statement structure.
Regarding the above, it is important to note that any new standards are typically issued several years before they come to fruition. This is to allow the relevant agencies to contemplate the effect and impact that new legislations may have on businesses. According to a recent survey conducted by the Australian Bureau of Statistics – it’s estimated that one in four businesses operating within the country may be affected by the new changes.
This is one of the reasons why 2017 is the ideal year to consider hiring an accounting firm, simply to help to ensure that all legislations and policies are being adhered to. Although lenience is often given to businesses within the first 12 months of the release of new standards, this won’t always be the case – and to ensure that new policies are being followed as expected, a quick consultancy session is advisable.
As things stand, only a handful of new standards are being considered for 2019 and 2020 and according to research, these policies may have little to no impact on businesses. Instead, they may affect the way in which accounting agencies provide their services from the perspective of tax alleviation. To find out more, be sure to return to our blog as we’ll be covering the most prominent details as and when they emerge.