Document ID: chunk:federal_register_of_legislation:F2023C00190:reg:9b:p22
Version: federal_register_of_legislation:F2023C00190
Segment Type: reg
Provision Reference: reg 9B (pt 22/41)
Character Range: 169379–172486

but is not part of, AASB 1054.  The Basis for Conclusions was originally published with AASB 2022-4 Amendments to Australian Accounting Standards – Disclosures in Special Purpose Financial Statements of Certain For-Profit Private Sector Entities.

Introduction

     BC1               This Basis for Conclusions summarises the Australian Accounting Standards Board's considerations in reaching the conclusions in this Standard.  It sets out the reasons why the Board developed the Standard, the approach taken to developing the Standard and the bases for the key decisions made.  In making decisions, individual Board members gave greater weight to some factors than to others.

     BC2               In setting out the Board's reasons for issuing this Standard, the following section includes the historical context and the relationship of the project that gave rise to this Standard to similar Board projects pertaining to different types of entities.  Later sections then:
          (a)                   summarise the rationale for the pertinent proposals that were exposed for public comment in Exposure Draft ED 302 Amendments to Australian Accounting Standards – Disclosures in Special Purpose Financial Statements of Certain For-Profit Private Sector Entities, which led to the development of this Standard; and
          (b)                   explain why some ED 302 proposals and some views expressed by respondents to ED 302 (particularly those not adequately addressed in the Basis for Conclusions on ED 302) were not adopted in the Standard.

Reasons for issuing this Standard

     BC3               In 2018 the Board initiated a broad project to address the issues associated with special purpose financial statements (SPFS) reporting in the for-profit private sector.[23] As part of that project, the Board proposed, through Exposure Draft ED 297 Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities (August 2019), to remove the option for some types of for-profit private sector entities to prepare SPFS when they are required to comply with Australian Accounting Standards (AAS).  ED 297 proposed an operative date of annual reporting periods beginning on or after 1 July 2020 and led to the issue of AASB 2020‑2 Amendments to Australian Accounting Standards – Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities (March 2020).  AASB 2020‑2, operative instead for reporting periods beginning on or after 1 July 2021, made amendments to AAS to disallow the preparation of SPFS by the following entities (and, consistent with that, to also remove the 'reporting entity' concept for them):
         (a) entities required by legislation to prepare financial statements that comply with either AAS or accounting standards;  and
         (b) entities required by their constituting document or another document to prepare financial statements that comply with AAS, provided the relevant document was created or amended on or after 1 July 2021 (to coincide with AASB 2020-2's operative date).
     The Basis for