Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p90
Version: federal_register_of_legislation:F2025C00172
Segment Type: other
Provision Reference: 
Character Range: 236857–239807

do not have public accountability as defined in Appendix A of AASB 1053 Application of Tiers of Australian Accounting Standards and are therefore eligible to present Tier 2 general purpose financial statements.
BC20 In addition, the AASB considered the entities listed in Appendix B of AASB 1053 that are deemed to have public accountability.  Whilst many investment entities would fall within the list of deemed entities, there could be a number of investment entities that would not be captured – for example, managed investment schemes that are investment entities but are not registered and therefore, again potentially eligible to present Tier 2 general purpose financial statements.
BC21 The AASB conducted due process on whether Tier 2 investment entities should be provided with any relief from the disclosures required by the IASB amendments through ED 220.
BC22 After considering constituent feedback, the AASB decided the disclosures in the IASB amendments for investment entities should be applied to both Tier 1 and Tier 2 investment entities as it considers those disclosures to be fundamental to the needs of users in decision-making. Accordingly, the AASB decided that it would not be appropriate to exempt those investment entities from any of the disclosures in the IASB amendments.

Dissenting views

Dissent of Peter Gibson, Jayne Godfrey, John O'Grady and Kevin M. Stevenson

DO1 In our opinion the exception to consolidation for investment entities that requires controlled investees to be measured at fair value through profit or loss rather than being consolidated is a violation of the basic principle that an entity should account for all of its assets, liabilities, income and expenses.
DO2 At the most fundamental level we do not see the provision of fair value information for investments as a substitute for, or an alternative to, consolidated information.  Without the detailed consideration of that part of the financial position and financial performance of an entity represented by its controlled entities, fair value movements would not be sufficient for decision-making and offset too much information into a single line item.
DO3 We regard the exception as fundamentally based on a view that an entity's business model should determine accounting treatments. However, we do not believe that an entity's business model should drive how it accounts for its controlled investees. In our opinion, the business model approach and the IASB's criteria for determining investment entities, which we believe lack rigour, will lead to uncertainty in application and inconsistency of reporting between similar entities.  This approach also has the potential to promote structuring opportunities to avoid consolidation. In turn, this would be to the detriment of providing useful, comparable information to users of financial statements.
DO4 We believe that providing exceptions to principles further complicates accounting,