Communiqué – November 2018
The Asian-Oceanian Standard-Setters Group (AOSSG) held its tenth annual meeting on the 21stand 22nd of November 2018 in Singapore. The meeting was jointly hosted by the China
Accounting Standards Committee (CASC), Singapore Accounting Standards Council (ASC), andInstitute of Singapore Chartered Accountants (ISCA) and attended by 20 member standard-setters
as well as representatives of the International Accounting Standards Board (IASB) and the IFRSFoundation.
The participating jurisdictions were Australia, Cambodia, China, Dubai, Hong Kong, India,Indonesia, Japan, Korea, Macao, Malaysia, Nepal, New Zealand, Pakistan, Saudi Arabia,Singapore, Sri Lanka, Syria, Thailand and Vietnam.
At the opening ceremony, Mr. Yibin Gao, Chair of AOSSG, the Director-General of the CASC
and the Accounting Regulatory Department of Ministry of Finance, China, and Mr. Kevin Kwok,
Chairman of ASC welcomed participants. Madam Indranee Rajah, Minister in the Prime
Minister’s Office, Second Minister for Finance and Second Minister for Education provided thekeynote address. She noted that global adoption of IFRS is a journey, not a destination, and thosejurisdictions moving toward adopting the International Financial Reporting Standards (IFRS)
were facing different challenges in this journey. She also emphasized that the AOSSG played an
important role in standard setting, and the shift in economic weight the Asian-Oceanian region
would provide AOSSG with more opportunities to influence international standard setting.
The IASB was represented at the meeting by the Chair, Mr. Hans Hoogervorst, Vice-Chair, Ms.
Sue Lloyd, and Board members, Dr. Jianqiao Lu and Mr. Takatsugu Ochi. Also, Associate
Director of the IFRS Foundation, Ms. Michelle Sansom, and the Director of the IFRS Foundation
Asia-Oceania Regional Office in Tokyo, Mr. Makoto Takahashi, attended the meeting.

AOSSG-specific affairs (Members-only session)
The Secretariat updated members on the following:
AOSSG representation at Accounting Standards Advisory Forum (ASAF)
The Secretariat informed members that the AOSSG was re-appointed as a member of the IASB
Accounting Standards Advisory Forum for a term of 3 years from December 2018 to 2021. Mr.
Shiwaji Bhikaji Zaware, Vice-Chair of AOSSG, Chairman of Accounting Standards Board of theInstitute of Chartered Accountants of India will be the individual representative. The AOSSGrepresentative will attend the ASAF meeting together with working group leaders.

1Meeting with the Trustees of IFRS Foundation
The IFRS Foundation invited the CAC to the Trustees’ Kuala Lumpur Meeting which will be heldon 29th-31st January 2019. Members provided feedback on their jurisdiction's challenges inadopting and implementing IFRS for input to the Trustees.
Mentoring Programme
The Secretariat updated the Mentoring Programme and encouraged all AOSSG members toparticipate in the programme as a mentor or a mentee.
Cambodia, Pakistan, and Sri Lanka expressed their willingness of participating in the IFRS
workshop. The members' feedback on the mentoring programme will be considered for futureplanning.
AOSSG Membership
In November, the Financial Reporting Council (FRC) of Bangladesh applied for AOSSG
membership. According to the AOSSG Membership Due Process, the FRC of Bangladesh waseligible to become an AOSSG member.
At the annual meeting, all members unanimously voted and accepted the FRC of Bangladesh tobecome member of AOSSG. The Secretariat officially announced the FRC of Bangladesh as the
newly joined AOSSG member.

Update and discussion on IASB projects
Mr. Hoogervorst, Ms. Lloyd, Mr. Ochi, Dr. Lu and Ms. Sansom provided a summary of the 2017–2018 activities and achievements, including better communication, active projects (e.g. primaryfinancial statements, management commentary), supporting implementation, the IFRS for SMEs
standard, and the technology initiative.

Presentation and Disclosure
AOSSG members discussed the IASB’s project on Primary Financial Statements. AOSSG
members recognised that presentation practices of items and performance measures in thestatement of financial performance are diverse, even within the same airline industry. AOSSG
members noted that disaggregation of information in the statement of financial performance andin the notes is very important. AOSSG members agreed that management would need to apply
judgement in distinguishing the share of profit or loss from integral associates and joint ventures2

from non-integral associates and joint ventures and guidance for the distinction will be needed.
AOSSG members were generally supportive of the IASB’s project on Primary Financial
Statements in order to improve comparability and transparency regarding presentation of thestatements of financial performance. KASB presented research results for the usefulness ofdisclosure in the notes and AOSSG members discussed and provided constructive feedback.

Financial Instruments with Characteristics of Equity
The Financial Instruments and Liabilities Working Group (WG) leader, AASB, shared feedback
received from the WG members on the proposals set out in the IASB DP/2018/1 Financial
Instruments with Characteristics of Equity (DP) with the IASB representatives and wider AOSSG
members. AOSSG members had mixed views on the DP proposals. Some AOSSG memberssuggested that IASB should proceed with the project but only after they have addressed the key
areas of concern and provided better rationale for why certain outcomes that are currently wellunderstood need to be changed and others suggested that the IASB should not proceed with theproject until they consider how the principles in the DP align with those in the Conceptual
Framework for Financial Reporting. A comment letter will be submitted to the IASB in December
2018 including the feedback received from AOSSG members.

Business Combinations under Common Control (BCUCC)
Accounting based on Current Values vs Predecessor Values
The BCUCC Sub-WG leader, HKICPA, presented and led a discussion on possible factors to beconsidered in determining the measurement basis for BCUCC for the receiving entity. The factors
presented were identified based on the Conceptual Framework for Financial Reporting 2018, andthe feedback received from the HKICPA's outreach activities and research on local
requirements/guidance on the accounting for BCUCC in different jurisdictions.
Most AOSSG members supported the following comments:● The information needs and cost-benefit incentives between non-controlling interests (NCI)
and the controlling party are generally different—it would be challenging to determine themeasurement basis for BCUCC that are focused on a particular user group of financial reports
without compromising the needs or incentives of another user group. Accordingly, in
determining the measurement basis, they did not support factors like the nature andpercentage of NCI in the receiving entity nor whether the receiving entity is listed.
● Following a principle-based approach, the determination of measurement basis for BCUCC
should be based on a set of relevant factors instead of a single limited scope (listed entity vsprivate entity). The economic substance of BCUCC could be a reasonable factor indetermining the measurement basis because this aligns with the principle-based requirements
in IFRS and could reduce structuring opportunities. If the BCUCC has the same substance as3

a business combination not under common control (BC), then a current value approach canfaithfully reflect the value of the transaction. Applying an alternative accounting method(other than a current value approach) might be justifiable if the substance of a BCUCC isdifferent from a BC.
Some AOSSG members did not consider measurement uncertainty arising from valuation should
be a factor in determining the measurement basis for BCUCC as this also exists in businesscombinations not under common control.
HKICPA will share the insights gained by the project and the AOSSG discussion with the IASB.

Insurance contract
The KASB presented the implementation issues addressed in the IFRS 17 workshop held in Seoul
on 31 October 2018 and shared its outcomes with AOSSG members. Other AOSSG members
including Hong Kong, China, Australia shared their implementation issues. All the issues are
currently being considered by the IASB.

Islamic Finance
The Islamic Finance WG presented a survey on the Application of IFRS 16 Leases to Ijarah (theSurvey). The objective of the Survey was to understand implementation challenges of IFRS 16 toIjarah, particularly from the perspective of an Islamic financial institution (IFI) as a lessor.
The Survey found that ijarah with an ownership transfer or ijarah muntahia bittamleek wascommon among WG member-jurisdictions. However, there were differences in the conduct of theijarah whereby risks and rewards could either be with the lessee or the lessor. Therefore,accounting for such ijarah under IFRS may result in it being classified either as an operating or
finance lease. This was however not applicable to WG member-jurisdictions that apply locallydeveloped Islamic accounting standards.
The Survey concluded that no major issues were noted on the application of IFRS 16 to ijarah.
Additionally, the Survey also suggests that further works need to be done to eliminate the gap
between IFRS and the Islamic accounting standards.

IFRS for SMEs
The IFRS for SMEs WG reported that the AOSSG Survey on IFRS for SMEs Standard has been
published on the AOSSG website on 22 February 2018. The WG is expected to commence its
work in early 2019 which coincides with the IASB’s Comprehensive Review on IFRS for SMEs
Standard with the issue of a Request for Information (RFI).

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Accounting issues involved in Bullion (Gold) Lending and Borrowing
The ICAI led discussion on ‘Accounting Issues involved in Bullion (Gold) Lending andBorrowing’ to understand the views/issues of other jurisdictions It was noted that this issue isprevalent in various jurisdictions, namely, Australia, China, India and Sri Lanka. Members notedthat the IFRS Interpretations Committee (IFRIC) has closed the matter on commodity Lending
and Borrowing for the time being. Given the diversity in accounting practice, members supported
the IASB addressing this issue. The IASB representatives advised that the IASB will be
addressing a broader project, i.e., ‘Commodity Lending’.

Virtual Currencies
The leader of the Business Groups and Assets WG, the ASBJ and Ms. Sue Lloyd, vice chair of theIASB and chair of the IFRIC provided the an update on their standard-setting activities regarding
virtual currencies. The ASBJ shared the challenges in developing its standard, in particular theissues on subsequent measurement of virtual currencies.

Update on plans/issues relating to IFRS application/implementation
AOSSG members from Saudi Arabia, Sri Lanka, Singapore and Thailand provided updates on theprogress of IFRS application and implementation issues in their respective jurisdictions.

Closing remarks
Mr. Hans Hoogervorst noted that it was again a pleasure to attend the Annual AOSSG Meeting.
He also emphasized the meeting was excellent and provided technical input to the IASB.
Mr. Shiwaji Bhikaji Zaware, expressed gratitude for being nominated to host the 2019 AnnualAOSSG Meeting in India.
Mr. Yibin Gao expressed gratitude to all of the attendees for their participation. He noted that thetopics and discussions were extensive and productive. He said the Annual AOSSG Meeting is anextension of regular communication among AOSSG members, as well as the cooperation between
the AOSSG and the IASB. He reaffirmed that the AOSSG Chair and Secretariat will continuously
support the AOSSG to deepen cooperation and communication among members.

5About Us
The Asian-Oceanian Standard-Setters Group (AOSSG) is a grouping of the accounting standardsetters in the Asian-Oceanian region. The group has been formed to discuss issues and shareexperiences on the adoption of International Financial Reporting Standards (IFRS) and tocontribute to the development of a high-quality set of global accounting standards.
The AOSSG plays an important role in encouraging the adoption of IFRS in the region.
The objectives of the AOSSG are to:(a) Promote the adoption of, and convergence with, IFRS by jurisdictions in the region;(b) Promote consistent application of IFRS by jurisdictions in the region;(c) Coordinate input from the region to the technical activities of the International
Accounting Standards Board (IASB); and(d) Cooperate with governments and regulators and other regional and internationalorganisations to improve the quality of financial reporting in the region.
More information about the AOSSG is provided at http://www.aossg.com/.

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