Document ID: chunk:federal_register_of_legislation:F2019N00027:body:0:p43
Version: federal_register_of_legislation:F2019N00027
Segment Type: other
Provision Reference: 
Character Range: 107526–110453

Regulation – Conclusions', Reserve Bank of Australia, Sydney, May 2016.
[2]  Under the Payment Systems (Regulation) Act 1998, in determining the public interest, the Bank is to have regard to the desirability of payment systems being safe, efficient, competitive, and not materially causing or contributing to increased financial system risk. The Bank may have regard to other matters it considers relevant.
[3]  Section 2.5 sets out the Bank's proposed transitional arrangements.
[4]  In broad terms, cash accounting recognises benefits when they are paid or received, whereas accrual accounting recognises benefits when they are earned or accrued, regardless of whether they have actually been paid or received.
[5]  There are additional provisions that (i) prevent a benefit from being allocated to reporting periods the whole of which occurs before or after the term of the contract or arrangement, and (ii) prevent allocation among more than 10 consecutive reporting periods.
[6]  This notwithstanding, the Bank notes that under such an approach entities may not be able to source all information required to determine net compensation from their financial accounts. For example, some relatively small incentives that are captured in net compensation may be deemed by an issuer to be too small or insignificant for inclusion in the issuer's financial accounts based on materiality considerations.
[7]  The shift to an accruals approach should not have a material effect on the cumulative net compensation received over the life of a scheme-issuer contract, as the shift affects the timing of recognition within the contract period, rather than whether a benefit is recognised or not.
[8]  AASB Accounting Standards (Tier 1) adopts the International Financial Reporting Standards.
[9]  This observation reflects the fact that the purpose and intent of accounting standards may differ from the purpose and intent of Standards No.1 and No.2.
[10]  Consequently, in this circumstance entities will not be able to draw directly, and without adjustment, on their financial accounts to determine net compensation.
[11]  For example, scheme and issuers would not be permitted to switch from one basis for allocating amounts to reporting periods to a different basis for doing so, without permission from the Bank.
[12]  For proposals 1–7 set out in this paper, the alternative option under consideration is the status quo, i.e. no change to the standards. Proposal 8 relates to transitional arrangements between the current and modified standards, as such there is no status quo option for proposal 8.
[13]  In the proposed changes to the standards, the terms Issuer Receipts and Issuer Payments are replaced by terms 'Direct Issuer Participant Payment' and 'Direct Issuer Participant Receipt'. For ease of reference, this consultation paper retains usage of the terms 'Issuer Payments' and 'Issuer Receipts'.
[14]  Note that that