Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p36
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 36/40)
Character Range: 136761–139874

this transition relief would allow entities to potentially restate previously recognised amounts in accordance with AASB 1, even though the previous Tier 2 – Reduced Disclosure Requirements GPFS complied with all recognition and measurement requirements without presenting consolidated financial statements. However, the Board noted that this outcome is consistent with the application of the relief available in AASB 1053 paragraph 18A(b) for entities that were preparing SPFS on the same basis (ie their SPFS complied with all the recognition and measurement requirements, without presenting consolidated financial statements, on the basis that neither the parent nor the group was a reporting entity).

Scope
BC25            Although both for-profit and NFP entities are affected by the replacement of Tier 2 – Reduced Disclosure Requirements with Tier 2 – Simplified Disclosures, NFP entities are not affected by the removal of SPFS and the reporting entity definition in Australian Accounting Standards at this stage. Therefore, NFP entities can continue to consider themselves to be non-reporting entities and prepare single-entity Tier 2 – Simplified Disclosures GPFS, applying the exemption in AASB 10 if relevant.

BC26            For this reason, the Board decided the Tier 2 transition relief proposed in ED 315 should be consistent with the scope of AASB 2020-2 and should therefore be limited to certain for-profit private sector entities.

Finalisation of ED 315 proposals
BC27            Following the consultation period, and after considering the comments received, the Board decided to proceed with issuing this Standard, with minimal changes from the proposals in ED 315.

BC28            The Board received seven formal comment letters on ED 315. The feedback received indicated that, in general, most respondents supported the proposals. However, some respondents provided additional feedback, which is considered in the following paragraphs.

Amendments to AASB 1

Application of the optional exemption by NFP entities
BC29            As the optional exemption in AASB 1 paragraph D16(a) can be applied by both for-profit and NFP entities, in the absence of a specific limitation to for-profit entities, one stakeholder questioned how a NFP entity might apply the optional exemption (including the proposed amendment) given the recognition and measurement differences between IFRSs and Australian Accounting Standards as they apply to NFP entities.

BC30            The Board considered this feedback but decided that no changes to the proposed amendment were necessary. The Board acknowledged that compliance with IFRSs might not result in compliance with Australian Accounting Standards as they apply to NFP entities, where NFP-specific recognition and measurement requirements in Australian Accounting Standards are relevant to an entity. The Board noted that a NFP entity would be unable to apply the optional exemption when transitioning to Australian Accounting Standards in relation to amounts included in a parent's IFRS-compliant consolidated financial statements that do not comply