Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:21:p34
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 21 (pt 34/101)
Character Range: 124320–127413

practical ability to fully price for risks or benefits.

Disclosure and long-run pricing (modification to paragraph 34)

     BC89            The Boards considered that, given the impact on public sector entities of medium- to long-term pricing and benefits approaches on the application of the requirements of AASB 17/PBE IFRS 17.34, where those approaches exist, they should be the subject of disclosure. This is because the disclosure could provide useful context for users of the financial statements.

     BC90            The Boards observed that the pricing and benefit approaches of public sector entities might be the subject of transparent public processes and, therefore, adequate disclosures might already be made outside the financial statements.

Disclosure and long-run pricing – proposal for AASB ED 319/NZASB ED 2022-3

     BC91            For the reasons noted immediately above, the Boards decided to propose that, when a public sector entity takes into account risks that relate to periods after the reassessment date based on having a policy of determining prices and benefits over a period longer than a single coverage period, it should be required to disclose information about the manner in which pricing/benefits are determined and the timeframes for which they are typically determined. The Boards decided to propose that the disclosure could be made either directly in the notes to the financial statements or by reference to an authoritative source, provided that source is available to users of the financial statements on the same terms as the financial statements and at the same time.

Disclosure and long-run pricing – AASB ED 319/NZASB ED 2022-3 feedback and Board conclusions

     BC92            Those respondents to AASB ED 319/NZASB ED 2022-3 who commented on the proposed disclosure requirement expressed concerns about:

          (a)                    the potential need to disclose commercially sensitive information;

          (b)                   the information being of little value to users; and

          (c)                    audit and other related cost ramifications of cross-referencing to information in external materials, which may also need to be reviewed.

     BC93            The Boards consider that information about the manner in which a public sector entity sets its prices and benefits is important because it can be driven by a range of regulations and laws. Accordingly, the Board concluded that a form of disclosure should be required.

     BC94            To address the concerns in the feedback received, the Boards concluded that they should simplify the disclosure to require information on the timeframes for which prices are typically determined and identification of the relevant government regulations or laws under which prices and benefits are set, without the need for any further explanation. The Boards noted the simplified disclosure would be required of all public sector entities applying AASB 17/PBE IFRS 17, not only those taking into account risks that relate to periods after the reassessment date