Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p57
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 57/76)
Character Range: 194535–197692

of a subsidiary in a manner consistent with the notions of control in AASB 127 and AASB 10 because:
(a)                   members exercise investment choice and might collectively acquire a controlling interest in another entity, and the superannuation entity may not be considered to have the power to govern the investee so as to obtain benefits from its activities because the superannuation entity is subject to the independent investment choice decisions of its members; and
(b)                   the 'sole purpose test' in the Superannuation Industry (Supervision) Act is generally considered to prohibit trustees from being involved in day-to-day operations of the businesses in which their superannuation entities invest.
BC177        The AASB considered the concerns expressed in a superannuation context and noted that most, if not all, the practical difficulties identified are not unique to superannuation entities and are encountered by many other entities, including investment-type entities reporting under Australian Accounting Standards.
BC178        A number of the respondents opposed parent superannuation entities being required to present consolidated financial statements on the grounds that users, particularly members, are unlikely to consider consolidated information useful.  They noted that, unlike shareholders in a company, members of a superannuation entity do not necessarily have a notional interest in all the net assets.  In particular, some members may have no exposure to a subsidiary held by their superannuation entity because that investment is not part of some members' chosen investment options.
BC179        Some respondents to ED 223 noted their support for the proposals in IASB ED/2011/4 to account for most subsidiaries at fair value through profit or loss.

Separate financial statements
BC180        The AASB considered whether there is any information that a user of the GPFSs of a superannuation parent might need that is not available in consolidated financial statements and concluded that consolidated financial statements would normally provide such users with the information they need in a superannuation context.  However, if a parent superannuation entity prepares separate financial statements for general purpose users, the AASB reasoned the entity presumably considers this information necessary for an understanding of the reported results of the group.  Accordingly, for the purposes of both ED 179 and ED 223, the AASB decided to propose that a parent superannuation entity that prepares separate financial statements for general purpose users should present them together with its consolidated financial statements.

Responses to the ED 179 and ED 223 separate financial statement proposals
BC181        Some respondents to ED 179 and ED 223 expressed concerns about the apparent inconsistency between the proposals about separate financial statements and the prudential reporting requirements in respect of separate financial statements that apply to APRA-regulated superannuation entities.  The AASB acknowledged the concerns but concluded its proposals would not prevent an APRA-regulated