Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p4
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 4/40)
Character Range: 48109–51202

issued in May 2007;
(b)                   Consultation Paper Differential Financial Reporting – Reducing Disclosure Requirements (A Proposed Reduced Disclosure Regime for Non-publicly Accountable For-profit Private Sector Entities and Certain Entities in the Not-for-profit Private Sector and Public Sector) – issued in February 2010; and
(c)                    Exposure Draft ED 192 Differential Reporting Framework – also issued in February 2010.
BC13            These consultative documents contained proposals relating to both of the concerns (a) and (b) noted in paragraph BC10 above.  The Board refined its ITC 12 proposals in the light of comments it received on the ITC, and reflected its revised proposals in the Consultation Paper and accompanying ED 192.  After considering constituent comments on ED 192, the Board decided to issue AASB 1053 in response to concern (a), and to undertake further research prior to deciding how it would deal with concern (b).
BC14            In relation to concern (b), many constituents agreed with the manner in which the Board proposed to address the concern, which was to change the focus from reporting entity to general purpose financial statements and clarify the meaning of general purpose financial statements in an Australian context.  This was on the grounds that:
(a)                    the application of reporting entity involves a high degree of subjectivity and the term is open to differing interpretations; and
(b)                   the use of reporting entity for differential reporting is not universally understood.
This group was of the view that the use of the reporting entity concept does not provide the intended result, and the uncertainty surrounding its application reduces its usefulness as a robust criterion for differential reporting purposes.
BC15            In contrast, other constituents expressed the view that the concept of reporting entity works well and should be retained as one aspect of differential reporting.  They commented that they have not seen evidence of major problems with its application.  This group, therefore, considered that those entities that currently claim to be non-reporting entities and prepare special purpose financial statements do not have dependent users and the evidence does not support a view that there is a systemic problem with reporting entities claiming a non-reporting entity status to evade their reporting responsibilities under Australian Accounting Standards.
BC16            The Board concluded that, in the light of these contrasting claims, further research should be carried out on the impact of the ED 192 proposals on those entities currently preparing special purpose financial statements.  This is primarily with a view to ensuring that those entities currently appropriately preparing special purpose financial statements are not disadvantaged by the proposals.  Consistent with this, the Board decided that, under the first stage of revisions to the differential reporting framework, concern (a) should be addressed.  The Board's approach to dealing with