Applying Conceptual Framework Principles to Superannuation Fund Accounting

15 Pages Posted: 5 Apr 2004

See all articles by Gerry Gallery

Gerry Gallery

Queensland University of Technology

Natalie Gallery

Queensland University of Technology

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.

JEL Classification: M41, M44, H24

Suggested Citation

Gallery, Gerry Thomas and Gallery, Natalie, Applying Conceptual Framework Principles to Superannuation Fund Accounting. Available at SSRN: https://ssrn.com/abstract=513253

Gerry Thomas Gallery (Contact Author)

Queensland University of Technology ( email )

School of Accountancy GPO 2434
Brisbane QLD 4001
Australia
61738648347 (Phone)

Natalie Gallery

Queensland University of Technology ( email )

School of Accountancy
GPO Box 2434
Brisbane, Queensland 4001
Australia

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