Financial Sector (Collection of Data) (reporting standard) determination No. 16 of 2007 - MRS 310.2 - Claims Expense and Reinsurance Recoveries

Administered by Department of the Treasury

Legislation au F2007L02107 Not in force Legislative Instrument

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Financial Sector (Collection of Data) (reporting standard) determinations Nos. 1- 17 of 2007

 

 

EXPLANATORY STATEMENT

 

Prepared by the Australian Prudential Regulation Authority (APRA)

Issued by the authority of APRA

 

Financial Sector (Collection of Data) Act 2001 (the Act), paragraph 13(1)(a)

 

Acts Interpretation Act 1901, subsection 33(3)

 

 

Under paragraph 13(1)(a) of the Act, APRA may, by writing, determine reporting standards with which financial sector entities must comply.  Such standards relate to reporting financial or accounting data and other information regarding the business or activities of the entities.  Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to issue an instrument the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to amend or vary any such instrument.

 

Financial Sector (Collection of Data) (reporting standard) determinations Nos. 1 - 17 of 2007 (the instruments) respectively revoke and replace the reporting standards (which were originally determined on 29 June 2004 to have effect from 30 June 2004) outlined below in respect of corporations to which section 5A of the Act applies (MDOs):

 

MRS 120.0: Capital Base

MRS 130.0: Off Balance Sheet Business – Direct Credit Substitutes Provided

MRS 130.1: Off Balance Sheet Business – Liquidity Support Facilities Obtained

MRS 130.2: Off Balance Sheet Business – Charges Granted

MRS 130.3: Off Balance Sheet Business – Credit Support Received

MRS 140.0: Investments – Direct Interest Rate Holdings

MRS 140.1: Investments – Direct Equity Holdings

MRS 140.2: Investments – Direct Property Holdings

MRS 140.3: Investments – Loans and Advances

MRS 140.4: Investments – Assets Indirectly Held

MRS 150.0: Asset Exposures

MRS 160.0: Derivative Activity

MRS 210.0: Outstanding Claims Liabilities

MRS 300.0: Statement of Financial Position

MRS 310.0: Statement of Financial Performance

MRS 310.2: Claims Expense and Reinsurance Recoveries

MRS 310.3: Investment and Operating Income and Expenses

 

Under subsection 15(2) of the Act, APRA has declared that the reporting standards shall begin to apply to all MDOs on the later of 30 June 2007 and the date of registration of the instruments on the Federal Register of Legislative Instruments.

 

  1.    Background

 

This Explanatory Statement explains the changes being made by APRA to the reporting framework for MDOs in response to Australian equivalents to international financial reporting standards (AIFRS).

 

Each reporting standard comprises: (1) the body of the reporting standard itself (which contains details about inter alia when returns under the standards must be lodged with APRA); (2) one or more reporting forms which must be completed by MDOs covered by the reporting standard; and (3) a set of detailed technical instructions regarding completion of the form.

 

The changes to Australian accounting standards that flow from the adoption of AIFRS, if left unadjusted, would automatically flow through to APRA’s reporting framework. APRA’s objective in its approach to AIFRS is to align its reporting  standards with Australian accounting standards and principles to the extent practicable, as the latter provide a widely accepted basis for the recognition and measurement of assets, liabilities, equity, revenue and expenses

 

 

2.      Purpose of the instrument

The purpose of each instrument is to revoke those reporting standards applying to MDOs and to replace them with corresponding standards which incorporate appropriate adjustments (new standards).  APRA considered that it would be clearer and more effective to consolidate the necessary changes within new standards.  For that reason, APRA decided to revoke and replace reporting standards rather than to amend them. APRA has also taken this opportunity to update the formatting of instructions attaching to all MDO reporting standards. Therefore APRA has revoked all MDO reporting standards and redetermined them.

 

3.      Operation of the instruments

 

The instruments determine the new standards.

 

The forms and instructions have been revised taking account of the impact of AIFRS. The core changes are as follows and most are due to AIFRS:

 

  • Terminology changes – Use of AIFRS and prudential terminology (e.g. Market value replaced with Fair value, Provision for deferred tax replaced with Deferred tax liability, Unrealised gain on derivatives replaced with Derivative financial instruments);
  • Addition - eg Paid up ordinary shares and Other liabilities; and
  • Deleted – eg Goodwill amortisation.

 

In addition, there have also been changes to update the formatting and references of the instruction guides together with improvement of wording. These changes do not affect the content of the reporting standards or instruction guides.

 

4.      Consultation

 

Consultation with all 7 MDOs has been held over a 2 week period.

 

5.      Regulation Impact Statement

 

A RIS or BCC report is not mandatory as the proposal has a low impact on business and individuals (including compliance costs).

Overview

The Financial Sector (Collection of Data) (reporting standard) determinations Nos. 1-17 of 2007 were enacted to address the need for updating the reporting framework for Major Deposit-taking Institutions (MDOs) in line with Australian equivalents to international financial reporting standards (AIFRS). The Australian Prudential Regulation Authority (APRA), which is the enacting body, aimed to align its reporting standards with Australian accounting standards and principles to the extent practicable. This alignment ensures a widely accepted basis for the recognition and measurement of assets, liabilities, equity, revenue, and expenses. The determinations revoke and replace existing reporting standards to incorporate necessary adjustments, resulting in clearer and more effective reporting requirements for MDOs. The new standards include terminology changes, additions, and deletions, along with updates to the formatting and references of instruction guides to enhance clarity and usability. These changes are intended to ensure that the reporting framework remains robust and relevant, facilitating accurate and consistent financial reporting.

Scope and Application

The Financial Sector (Collection of Data) (reporting standard) determinations Nos. 1-17 of 2007, issued by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, apply to Major Deposit-taking Institutions (MDOs) as defined under section 5A of the Act. These determinations aim to align APRA's reporting standards with Australian equivalents to International Financial Reporting Standards (AIFRS) and Australian accounting principles. The new standards, which replace the previous ones, include detailed reporting forms and technical instructions tailored to the specific requirements of MDOs, encompassing changes in terminology, additions, and deletions to reflect the adoption of AIFRS. The revised standards are designed to ensure consistency in the reporting of financial and accounting data and other relevant information. APRA has opted to revoke and replace the existing standards to enhance clarity and effectiveness, while also updating the formatting and references of the accompanying instructions without altering the core content. These instruments, which apply from the later of 30 June 2007 or the date of their registration on the Federal Register of Legislative Instruments, reflect APRA's commitment to maintaining a robust and adaptable regulatory framework that aligns with evolving international and national standards.

Key Provisions

The Financial Sector (Collection of Data) (reporting standard) determinations Nos. 1-17 of 2007 primarily concern the establishment of new reporting standards for Major Deposit-taking Institutions (MDOs) as outlined under section 5A of the Financial Sector (Collection of Data) Act 2001 (the Act) (subsection 15(2)). These standards replace the previously existing reporting standards that had been in effect since 30 June 2004. Each determination revokes the old standards and introduces new ones that incorporate adjustments to align with Australian equivalents to international financial reporting standards (AIFRS). The revised standards cover various aspects of financial reporting, including capital base (MRS 120.0), off-balance sheet business (MRS 130.0 to MRS 130.3), investments (MRS 140.0 to MRS 140.4), asset exposures (MRS 150.0), derivative activity (MRS 160.0), outstanding claims liabilities (MRS 210.0), and statements of financial position and performance (MRS 300.0 to MRS 310.3). Under the Act, APRA has the authority to determine these reporting standards, and the determinations require MDOs to comply with the new standards when lodging their financial and accounting data with APRA. The new standards mandate the use of AIFRS terminology and include updates such as the addition of new items like 'Paid up ordinary shares' and 'Other liabilities,' while removing outdated items like 'Goodwill amortisation.' MDOs must adhere to the revised reporting forms and detailed technical instructions provided with each determination. These instructions have also been updated to improve clarity and formatting. Failure to comply with the new reporting standards may result in civil or administrative penalties. While the determinations do not explicitly state penalties, breaches of the Act or non-compliance with APRA's reporting requirements can lead to enforcement actions by APRA, which may include fines or other corrective measures. The precise penalties would be determined based on the severity and nature of the non-compliance, in accordance with the provisions of the Act and APRA's regulatory framework.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.