The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) sought feedback on its position paper which outlines the key preliminary findings of the Supply Chain Financing (SCF) Review. SCF enables a supplier to reduce buyer payment times, at a cost to the supplier. The Paper makes a suite of draft recommendations to be finalised before a full report is handed down at the end of March.
Our joint CA ANZ / CPA Australia submission focuses on question 5 in the Paper related to "appropriate coverage by accounting standards". In our response we clarify the AASB's role and highlight the initiatives that are already underway in this area. We acknowledge the Australian Accounting Standards do not specifically mention SCF, and there is a lack of understanding of SCF, therefore guidance on the accounting treatment of such arrangements would be well received. We also set out the respective responsibilities of management/directors and auditors for financial reporting.