Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p41
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 41/47)
Character Range: 138310–141417

accounting policies selected by the directors or those charged with governance. For example, the directors or those charged with governance could adopt a basis of preparation based on AAS, the Tier 2 GPFS framework, RG 85, the IFRS for SMEs Standard, the NZ Public Benefit Entity Simple Format Reporting – Accrual (Not-for-profit), the NZ Public Benefit Entity Simple Format Reporting – Cash (Not-for-profit), UK FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other sources. Refer to paragraphs BC78, BC84, BC103 and BC106 for additional discussion.

     BC72            The Board conducted research[34] into the number and types of specified for-profit entities lodging financial statements with ASIC and concluded there were approximately 12,797 specified for-profit entities lodging financial reports. This is based on the latest lodgements by all filing entities as at 30 July 2018, which was before the thresholds for large proprietary companies were doubled. Of these 12,797 entities, 6,763 were large proprietary companies,[35] 3,102 were unlisted public companies and 2,932 were small proprietary companies controlled by a foreign company. Subsequent to the revision of the large proprietary thresholds, the Board expects there are approximately 10,500 specified for-profit entities that would be required to publicly lodge financial statements with ASIC. However, the Board was not able to obtain data on the number of other for-profit private sector entities that would be required to prepare financial statement in accordance with other types of legislation.

Not-for-profit private sector entities

     BC73            As noted in paragraph BC55, the Board decided this Standard should apply only to for-profit private sector entities and that separate later consideration of the NFP private sector was needed for the following reasons:

          (a)                    the removal of SPFS would have a significantly greater impact on the NFP private sector compared with the for-profit private sector. Of those NFP private sector entities that are required to prepare financial statements and lodge them with the ACNC, research estimates that of the 36% of large and medium charities preparing and lodging SPFS with the ACNC, only a small portion (26%)[36] are complying with the R&M requirements in AAS as compared to approximately 76% of specified for-profit private sector entities lodging financial statements with ASIC (see paragraph BC20). The substantially lower level of compliance in the NFP private sector would result in a much larger proportion of the NFP private sector reporting population being impacted by the proposals compared with the for-profit private sector;

          (b)                   specified for-profit private sector entities that are required to prepare financial statements that comply with AAS have greater levels of economic significance, size and resources compared to NFP private sector entities. Proportionately, specified for-profit private sector entities are a significantly smaller number (less than 1.5%