Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p28
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 28/47)
Character Range: 100921–104057

lodge GPFS with the ATO, which would subsequently be provided to ASIC[18] (December 2015);

          (b)                   questions to the Board's Chair and the Financial Reporting Council's (FRC) Chair on the AASB's and FRC's approaches to resolving the shortcomings of SPFS by the Parliamentary Joint Committee on Corporations and Financial Services as part of its inquiry into the oversight of ASIC and the Takeovers Panel (February 2018);

          (c)                    the Senate Economics References Committee report Financial and tax practices of for-profit aged care providers (November 2018), which supported the Board's intent to remove the ability of certain entities to prepare SPFS where they are required to prepare financial statements that comply with AAS; and

          (d)                   further questions to the Board's Chair on the status of the AASB's work to remove SPFS from the Parliamentary Joint Committee on Corporations and Financial Services as part of its inquiry into the regulation of auditing in Australia (November 2019). SPFS were criticised both by members of that committee as well as in several submissions from the public in relation to that inquiry.

     BC33            In light of the regulatory developments and public enquiries noted above, the Board also observed the increasing public interest and media scrutiny of the transparency and accountability of publicly available financial statements, both generally and specifically in relation to the reporting entity concept and its facilitation of publicly lodged SPFS.

     BC34            In proposing to remove the ability of certain for-profit private sector entities to prepare SPFS when they are required to prepare financial statements that comply with AAS, the Board received support from other regulators, particularly ASIC and the ATO, which conveyed the following views to the Board:

          (a)                    ASIC fully supports the consultation to remove SPFS for entities regulated by ASIC and remove the subjective 'reporting entity' test under SAC 1, facilitating a comparable, consistent and transparent framework for the preparation of financial statements in Australia; and

          (b)                   the ATO is supportive of the AASB's proposed approach to consulting on a series of principles or concepts for enhancing the transparency of entities currently preparing SPFS as part of adopting the RCF issued by the IASB and for inclusion in AAS by 2021. The ATO also noted its further support of the AASB's recommendations surrounding the timing and application of the new Tier 2 disclosures requirements during the Board's Exposure Draft process.

     BC35            The Board provided input to Treasury in considering legislative requirements that specify which types of for-profit entities should be required to prepare and, in most cases, publicly lodge financial statements with ASIC. In April 2019, Treasury announced changes to the Corporations Regulations 2001[19] to increase (double) the thresholds used for determining whether an entity is a large proprietary company, with companies