On 6 June 2014, the Australian Accounting Standards Board (AASB) announced a replacement accounting standard for superannuation entities. The existing standard was considered out of date because of significant changes in Australia’s superannuation industry over the last two decades and the adoption in Australia of International Financial Reporting Standards. Key changes in the replacement standard were to:
- measure assets using fair value instead of net market value;
- measure defined benefit member liability annually instead of triennially;
- provide guidance on when an insurance exposure might exist; and
- require additional disclosures relating to liabilities, risks, type of members and their benefits.
The proposal has been assessed as likely to have a measurable but limited impact on the economy with minor impacts on competition. A Regulation Impact Statement (RIS) was prepared and certified by the AASB under the March 2014 Australian Government Guide to Regulation, and has been assessed as compliant by the Office of Best Practice Regulation (OBPR). However, the preparation of the RIS was not consistent with best practice because the impacts of the new standard on affected stakeholders’ financial statements were not sufficiently examined. The RIS estimates the regulatory cost is $1.2 million per annum, and identifies offsets. The OBPR has agreed to the regulatory cost and offset estimates.
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