Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:8:p20
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 8 (pt 20/28)
Character Range: 227763–230848

the table in paragraph BC127, the Board also concluded that providing relief from restating comparative information in the year of transition would be particularly beneficial as it could allow for an earlier effective date. As such, with regard to the above considerations, the Board decided to propose an effective date of annual periods beginning on or after 1 July 2020 in ED 297. The Board noted this would effectively align with the effective date of the RCF, given most Australian for-profit private sector entities would have reporting dates of 30 June.

     BC148        Further, the Board noted the timeliness of completing this project, in order to provide an option for large proprietary companies to early adopt the RCF, applicable transitional relief and Tier 2 GPFS framework for periods beginning on or after 1 July 2019 (ie aligned with the doubling of the thresholds used for determining what constitutes a large proprietary company).

     BC149        Respondents to ED 297 expressed mixed views on the proposed effective date, with many recommending the Board defer the effective date by 1-2 years. Reasons for deferral suggested by respondents include:

          (a)                    to provide time for education, software and process changes;

          (b)                   challenges caused by first-time consolidation, for example gathering AAS-compliant information from subsidiaries;

          (c)                    deferring the effective date would dismiss the need for transitional relief;

          (d)                   the AASB Due Process Framework for Setting Standards (September 2019) (Due Process Framework) suggests an implementation period of 2 years in typical cases; and

          (e)                    whilst the effective date appeared appropriate for entities that should have been complying with RG 85 (ie entities required to prepare financial statements in accordance with the Corporations Act 2001), it may be too soon for other for-profit entities within the scope that had not previously had RG 85 to guide their financial reporting framework.

     BC150        In addition, because ED 297 and ED 295 are complementary – that is, the revised Tier 2 framework is an integral piece of the removal of SPFS – the Board also considered the comments to ED 295 addressing the effective date, which included in addition to the responses noted above:

          (a)                    that the revised Tier 2 framework should be delayed until the direction of the IASB's Subsidiaries that are SMEs project is finalised, due to the multiple framework changes that could occur if the AASB were to adopt the IASB's solution shortly after implementing its own simplified disclosure standard; and

          (b)                   to give time for the NZASB to decide the direction for its own Tier 2 framework in an attempt to retain trans-Tasman convergence for for-profit entities.

     BC151        The Board considered a range of options to determine the most appropriate solution to balance the urgency of solving the SPFS problem