1. International Financial Reporting Standards A Survey of Asia Pacific Countries and Their Progress in adopting IFRS

2. Australia has adopted IFRS for Reporting Entities: Listed companies & Trusts, Public Borrowing & Security issuing Entities, unlisted Public Companies, Large Private Companies and Registered Schemes Non-reporting entities financial report must meet IAS 1 Presentation of Financial Statements and state the Accounting Policies adopted for their presentation Small Private Companies that meet two of three tests: Consolidated Turnover <$25m, Gross Assets <$12.5M, less than 50 employees are generally not required to prepare financial reports The Small Private Company exemption does not apply to companies under foreign control. They must lodged audit accounts with the Regulator I will deal with Hall Chadwick Experience & Comment Generally on Australia's experience later in this paper

3. China has adopted IFRS for Enterprise Accounting It has adapting the Standards to deal with issues of: State Owned Enterprise - Business Combinations & Related Part Disclosure Impairment of Assets - Confirmed Loss of Value not transferred back because of perceived use to manipulate profits and losses Employee Benefits - Does not reflect the current state of employee benefits in China Hyper-inflationary economies - Not considered applicable to a socialist Market Economy

4. Hong Kong has adopted IFRS but provided relief for SME's It has also provided transitional relief in implementing some standards, but the commitment is to full adoption except for SME's Hong Kong’s own SME Financial Reporting Framework and SME Financial Reporting Standards were made effective from the date IFRS was adopted

5. Indonesia's Financial Accounting Standards Board (DSAK) has a four step plan towards IFRS convergence in 2010 Adopt certain IAS that are interrelated with property, plant & equipment and financial instruments. Obtain the Indonesian government perspective concerning regulations. Involve business practitioners to pave the way for fair value accounting alternatives. Develop accounting standards for SMEs. Of Special Interest is that the DSAK plans To issue Syariah Accounting Standards in three languages, Indonesian, English and Arabic, to support the syariah based financial industry which is developing in Indonesia.

6. Japan plans to Compulsorily adopt IFRS from April 2015, early adoption may be chosen by listed companies in the Global Market from March 2010 There is debate on whether IFRS should be limited to: Listed companies playing in the global market. All the listed companies irrespective of global or local. Or, apply both for consolidated and non-consolidated Financial Statements. In any event, compulsory adoption of IFRS to non-listed companies is not scheduled, although IFRS can be chosen. In this context, it is quite likely that Japan may run with two standards, local and IFRS Japan will be influenced by the decision that the USA makes on convergence, if at all, and the timing.

7. Korea has adopted IFRS (K-IFRS) from the end of 2007 The benefits Korea sees are: Greater transparency The opportunity for Korean Accountants to expand world-wide, partly by delivering services to other countries adopting IFRS The Korea Accounting Institute will provide standards for non-listed companies less complex than K-IFRS

8. Malaysia has adopted IFRS with some differences as the Malaysian FRS The key differences are categorized into the following groups: IFRS with differences from FRS - adapting IFRS to Malaysian business circumstances; IFRS with no corresponding FRS, e.g., no Financial Instruments: Disclosures ; Amendments/revisions to IFRS with no corresponding amendments/revisions to FRS; and FRS with no corresponding IFRS - FRS has its own standards on General & Life Insurance, Aquaculture and Preliminary & pre-operating expenditure.

9. New Zealand has adopted IFRS New Zealand & Australia have an agreement to adopt IFRS The only point of contention maybe that New Zealand may be the first county to adopt IFRS- Lite (IFRS for SMEs), Australia is divided on the subject.

10. Singapore has adopted IFRS with some non-alignment Non-Alignment includes: Property, Plant & Equipment & Leases Consolidations, Investment in Associates, Interests in Joint Ventures & Business Combinations Impairment of Assets Intangible Assets Financial Instruments: Recognition & Measurement + Disclosure Share based payments

11. Vietnam has substantially adopted IFRS Areas where Vietnam Accounting Standards vary from IFRS Employee Benefits & Retirement Accounting for Government Grants & Assistance Financial Instruments – Presentation, recognition & measurement + Disclosure Impairment of Assets Hyperinflation Economies Agriculture Non-Current Assets held for sale and discontinued operations Mineral Resources – Exploration & Evaluations Share based payments

12. The Australian Experience Key dates March 2004 IFRS standards adopted applied from 2005 onwards. 1 January 2005 Australian companies were required to apply accounting standards that were issued by the IASB to reporting periods that commence on or after 1 January 2005. However, one-year comparative requirements brought forward the application of IFRS to 1 January 2004. 1 July 2005 For reporting entities with had a June balance date, the first accounts prepared in accordance with IFRS were for the financial year commencing 1 July 2005. However, one-year comparative requirements brought forward the application of IFRS to 1 July 2004.

13. WHY WE ADOPTED IFRS The Australian accounting approach was inherited from the UK As a consequence we were Principle based not Prescriptive It is also instructive that our industry leaders were concerned that if we followed US GAAP that there would be no-one from Australia sitting at the decision making table. “Cultural Cringe” is how that is best described. An interesting aside is that our Financial Analysts were slow in the take up of education programs for IFRS

14. The Australian Experience Remaining differences between AIFRS and IFRS: The AASB has retained a difference in the definition of a reporting entity. Under AIFRS a reporting entity is an entity in respect of which it is reasonable to expect the existence of users. The IFRS 3 definition refers to an entity “for which there are users…” Australia has revised or made mandatory standards were options are available in the mining, financial services and insurance areas. The capitalisation of exploration costs has been adapted to Australian circumstances.

15. The Hall Chadwick Australian Experience Costs incurred as a consequence of AASB adopting IFRS: Staff training – External Courses Staff training – Internally generated by Senior audit personnel Staff training – External consultant (A new consulting area arising from IFRS, Client Seminars – Directors and Financial Services staff of clients

16. Australia & IFRS for SME’s Mixed opinions being provided to AASB: Big 4, want to modify IFRS, not adopt IFRS for SME’s. IFRS Lite to many difference, more training costs and Private firms that want to List will need to use “big” IFRS. Regulators appear to agree with the “big” 4. Some of the mid-tier firms see IFRS Lite as an opportunity. The smaller firms are ignoring the debate.

17. India Not within the remit of the Asia Pacific, BUT, my limited research shows: Convergence of Indian Accounting Standards with IFRS by 1 April 2011. A Study Group has been appointed to look at IFRS for SME’s. Phase 1, Large listed companies, Insurance, Mutual Funds, Banking, Overseas Borrowers of >$50m or with >$50m in overseas capital raised and Indian Subsidiaries of foreign companies that have adopted IFRS.

18. The Asia Pacific IFRS appears to be preferred to US GAAP Why? The influence of the UK on Accounting Institutions arising from the colonial past GAAP is prescriptive & probably considered less flexible and able to be adapted to local experience.