Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p72
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 72/73)
Character Range: 363296–366142

being that the general level of disclosure under Tier 2 was still viewed as burdensome. A research paper (Potter, B., Tanewski, G., and Wright, S., 2016, Financial Reporting by Private Companies in Australia: Current Practice and Opportunities for Research, paper presented at the AASB Research Forum, November 24 2016, Sydney) on the financial reporting practices by a sample of large proprietary companies in Australia lodging annual financial statements with ASIC identified that:
    (i)  less than 10 percent of the total sample use Tier 2 disclosures; and
    (ii)  of those large proprietary companies sampled that prepare GPFS, around 20 percent use Tier 2 disclosures.
A subsequent analysis of financial reports of for-profit non-disclosing entities lodging financial statements with ASIC in 2018 confirmed that 71 percent of these entities were still lodging SPFS with ASIC, 13 percent lodged Tier 2 GPFS and 16 percent Tier 1.
[50] The IASB was guided by the broad principles set out in paragraph BC41, but also relied on the recommendations of a working group which undertook a comprehensive review of the disclosure proposals in the exposure draft, and the comments on those proposals in response to the exposure draft. In addition, the IASB received feedback from representatives of a number of German banks that lend extensively to small private entities and provided the IASB with a comprehensive report on disclosure needs from a bank lender's perspective. See paragraphs BC44-BC47 and BC156-158 of the IFRS for SMEs Standard – Part B.
[51] In considering the feedback received on ITC 39, the AASB noted in February 2019 that while a minority of respondents had asked the Board to consider the IFRS for SMEs Standard as an option or alternative for Tier 2 GPFS, these respondents did not provide any new arguments as to whether the IFRS for SMEs Standard would be preferable to full R&M. The AASB further noted that the IFRS for SMEs Standard includes requirements for consolidated financial statements, deferred tax accounting, financial instruments accounting and related party disclosures that are not substantively different to full IFRS R&M requirements. For these reasons, the AASB decided not to propose a Tier 2 GPFS framework with differential R&M requirements as an option or alternative for Tier 2 GPFS for the for-profit sector. Further discussion of the Board's consideration on this matter is available in AASB 2020-2 paragraphs BC99−BC107.
[52] As per paragraph BC46 of IFRS for SMEs Standard – Part B.
[53] See paragraph BC157 of IFRS for SMEs Standard – Part B.
[54] See AASB Discussion Paper: Improving Financial Reporting for Australian Charities
[55] See AASB Discussion Paper: Improving Financial Reporting for Australian Public Sector
[56] 2015 Amendments to the IFRS for SMEs, paragraph BC210-BC212
[57] ED