Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p29
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 29/73)
Character Range: 243011–245892

circumstances which are also relevant to Tier 2 entities and hence needs to be included. Paragraphs 3.4, 3.5 and 3.6 of the IFRS for SMEs Standard have been deleted, as they are not relevant to entities applying this Standard.

      2.             The offsetting prohibition in paragraph BC56(b) is included in Section 2 Concepts and Pervasive Principles of the IFRS for SMEs Standard (paragraph 2.52). As this section has been otherwise excluded from this Standard on the basis that it does not include any disclosures, the prohibition had to be separately added to this Standard.

      3.             Permitting the options in the presentation of the cash flow statement from AASB 107 ensures that there are no differences in presentation to full AAS and avoids any possible issues, for example for the consolidation of subsidiaries that report under Tier 2 by parent entities that report under Tier 1 (full AAS).

      4.             Retaining the exemption from disclosing key management personnel compensation in paragraph BC56(e) for entities that obtain key management personnel services from another entity avoids having potentially more onerous disclosure requirements than for Tier 1 entities. While arguably the exemption in paragraph 17A of AASB 124 (paragraph 195 in this Standard) only provides relief from disclosing the breakdown of key management personnel compensation that is otherwise required to be disclosed by AASB 124 paragraph 17, the Board noted that the fees paid to a management entity that must be disclosed under paragraph 18A of AASB 124 (paragraph 196 in this Standard) may also cover other services, and that the fees many not specifically identify the amount relating to key management personnel services.

      5.             To avoid any potential R&M differences, the Board further decided to replace the definition of materiality in the IFRS for SMEs Standard with the recently updated definition of material from AASB 101 and added paragraph 23 which clarifies the application of materiality (based on paragraph 31 in AASB 101). The Board also replaced the guidance on the presentation of information in the notes (structure of notes, paragraph 93 in this standard and paragraph 8.4 in the IFRS for SMEs Standard) with the revised guidance from paragraphs 114 and 116 of AASB 101 that was introduced via amendments to AASB 101 in 2015 and added additional guidance to paragraph 40 confirming that the terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification (from paragraph 69(d) of AASB 101). This will further ensure that there are no presentation differences to full AAS.

      6.            Consistent with the basic approach of minimising differences to the disclosures in the IFRS for SMEs Standard, the Board decided to retain