Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p37
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 37/76)
Character Range: 136667–139932

levied on concessional contributions should be presented separately in the statement of changes in member benefits because:
(a)                   information about tax on contributions is important for decision making by users;
(b)                   tax on concessional contributions is effectively paid by a superannuation entity on behalf of members and should be associated with member benefits; and
(c)                   recognising tax on contributions as a part of income tax expense attributable to earnings would understate the entity's operating and investment performance.
BC97            The AASB also noted that, under Interpretation 1019 The Superannuation Contributions Surcharge, an obligation for the surcharge gives rise to a liability and an expense of a superannuation entity.  The AASB also noted that, while the surcharge specifically dealt with in Interpretation 1019 no longer applies to deductible contributions, it will continue to be paid by defined benefit members who have made surchargeable contributions or who had surchargeable contributions made on their behalf between 1996 and 2005 and the surcharge has not yet been paid.  Accordingly, under Interpretation 1019, accrued interest on a surcharge amount payable is treated as an expense by the entity.  In addition, a new surcharge on superannuation contributions for high income earners has recently been implemented.
BC98            The AASB considered the nature of the surcharge dealt with under Interpretation 1019 and concluded the superannuation entity is essentially acting as an agent for its members because the surcharge was determined on the basis of members' personal taxable income.  The AASB also considered contribution surcharge amounts are unlikely to be material in the context of member liabilities.
BC99            The AASB concluded it will reconsider the status of Interpretation 1019 and whether it might need to address the surcharge on superannuation contributions for high income earners introduced in 2013, once the impact of the implementation of that surcharge is clear.[8]

Member liabilities

Recognition
BC100        Under AAS 25, a defined contribution superannuation plan must recognise its members' accrued benefits as a liability whereas a defined benefit superannuation plan can choose to either disclose its members' accrued benefits in a note or recognise them as a liability.
BC101        During its deliberations on ED 179 and ED 223, the AASB considered the merits of retaining these reporting requirements, particularly the requirements for defined benefit superannuation plans, and noted:
(a)                   the disclosure of liabilities that would otherwise be recognised in the statement of financial position is inconsistent with other Australian Accounting Standards; and
(b)                   liabilities could be legal (including contractual) obligations or be constructive in nature.
BC102        The AASB considered the respective legal/contractual and constructive obligations of superannuation entities and employer-sponsors and concluded that member liabilities should be recognised as liabilities of superannuation entities because:
(a)                   the obligation to fund a member's defined contribution entitlements