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Applying Conceptual Framework Principles to Superannuation1 Fund Accounting

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  • Gerry Gallery
  • Natalie Gallery

Abstract

The Australian accounting standard AAS 25, Financial Reporting by Superannuation Plans, was the first pension accounting standard internationally to apply established conceptual framework (CF) principles. In Australia those principles have guided standard setting for more than a decade. However, AAS 25 has been criticized for failing to provide useful financial information. The analysis provided in this article addresses this paradox. The findings reveal major anomalies in AAS 25 associated with the treatment of accrued benefits that distort financial position and performance measures. The conceptual flaws in the standard are attributed to the misapplication of CF principles and an absence of adequate guidance in the CF for non‐corporate entities such as superannuation funds. Distorted financial information produced by superannuation plans has potential undesirable taxation and social outcomes. Consequently, there is an urgent need to update the Australian and international conceptual frameworks to provide guidance for revising accounting standards that better reflect current fiduciary and ownership relationships in non‐corporate entities such as superannuation funds.

Suggested Citation

  • Gerry Gallery & Natalie Gallery, 2004. "Applying Conceptual Framework Principles to Superannuation1 Fund Accounting," Abacus, Accounting Foundation, University of Sydney, vol. 40(1), pages 117-131, February.
    • Handle: RePEc:bla:abacus:v:40:y:2004:i:1:p:117-131
    DOI: 10.1111/j.1467-6281.2004.00146.x
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    References listed on IDEAS

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    1. Francesco Capalbo, 2003. "Domestic Practice, Comparative International Analyses and Accounting Discretion—Italian Savings Banks’ Pension Cost Accounting," Abacus, Accounting Foundation, University of Sydney, vol. 39(1), pages 66-81, February.
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    Cited by:

    1. Hanno Merkt, 2014. "Das IFRS Conceptual Framework aus regelungsmethodischer Sicht," Schmalenbach Journal of Business Research, Springer, vol. 66(5), pages 477-504, August.

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