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Recent Additions

In our Economic & Market Outlook dated 5 July 2010, we noted that leading indicators had begun to deteriorate sharply in the United States, the implication being that the US economy may well be heading back into recession. As the US is still the world’s largest economy, it remains of global importance. Economic data released since the end of June has only added to our concerns and we would have to say, failing any further stimulus, that the odds of a US recession have increased significantly.
AASB 108: ‘Accounting Policies, Changes in Accounting Estimates and errors applies to financial statements required to be prepared in accordance with the Corporations Act as well as financial statements prepared as general purpose financial reports.
Paragraph 30 of the standard requires disclosure of Australian accounting standards that have been issued but which are not yet effective as well as  known, or reasonably estimable information, relevant to assessing the possible impact that application of the new standard will have on the entity’s financial report in the period of initial application. Some suggested disclosures are available for consideration at paragraph 31 of AASB 108 which may assist with an entity’s compliance.
The New South Wales Associations Incorporation Act 2009 (the Act) and Associations Incorporation Regulation 2010 commenced from 1 July 2010, and the associated reforms are expected to assist more than 35,000 associations incorporated in New South Wales to operate more effectively and to make it easier for them to manage their affairs. It is not expected that the day–to–day procedures and operations of associations will be directly impacted. The key financial reporting changes introduce a tiered financial reporting framework.
As a result of the recent Corporations Act reforms, small public companies limited by guarantee are generally no longer required by the Corporations Act to have an annual audit since they have been exempted from financial reporting obligations.
A small public company limited by guarantee is one which has annual revenue (consolidated where applicable) of less than $250,000 and which does not have deductible gift recipient status.
Before taking advantage of this financial reporting relief, these entities should check to see whether a financial report and/or audit continue to be applicable pursuant to the entity’s constitution or other contractual provisions with third parties that maybe in place, such as borrowing provisions.

ASIC Class Order 10/654

On 29 July 2010 the Australian Securities and Investments Commission (“ASIC”) issued Class Order CO 10/654 “Inclusion of parent entity financial statements in financial reports”.
With the recent amendments made to Chapter 2M of the Corporations Act, the revised legislation prevented entities presenting consolidated financial statements from including parent entity financial statements in their financial report.
The class order overcomes this unintended consequence allowing entities to include parent and consolidated entity financial statements in their financial report.
Some entities may therefore elect not to take advantage of the financial reporting reform that allows entities to omit parent entity financial statements.
The Government today announced sweeping changes to Australian shipping policy designed to stimulate Australian shipping

GlaxoSmithKline Inc v The Queen



On 26 July 2010, the Canadian Court of Appeal (the “Appeals Court”) handed down its decision in the case of GlaxoSmithKline Inc v The Queen.  The Appeals Court reversed the decision handed down by the Tax Court of Canada (the “Tax Court”) in 2008.
The Fringe Benefits Tax (FBT) and Goods and Services Tax (GST) legislation outline specific rules for tax-exempt bodies that provide entertainment to employees.  To ensure any FBT or GST liabilities reported to the Australian Taxation Office have not been understated, it is important tax-exempt bodies comply with these rules.
SYDNEY, NSW — 2 AUGUST, 2010 Moore Stephens Technology Australia (MSTA), a leading provider of software and professional services, has been named to the 2010 President’s Club for Microsoft Dynamics. This achievement is a direct result of MSTA’s outstanding dedication to customer satisfaction through the delivery of innovative business solutions.

Politics and Investments

As most people anticipated Prime Minister Julia Gillard called an election for August 21 with the weeks leading up to it being a battle between the major parties, both of whom will yell from the rooftops their perceived economic credentials. Labor will boast of the good management throughout the Global Financial Crisis, while the Liberals’ will assert that in their last term they paid off Government debt and fostered lower interest rates. Irrespective of which party you may follow during the course of this election campaign, investment markets have in most circumstances taken a neutral approach.
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