Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p23
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 23/73)
Character Range: 226104–229029

meet to report in accordance with the Tier 2 framework. This framework does not change those criteria.

      2.             The Board agreed to develop the new disclosures via a bottom-up approach, starting with the existing disclosures in the IFRS for SMEs Standard. This avoids having to identify specific full AAS disclosures that need to be retained and those that can be excluded. This approach also avoids the tendency to retain disclosures in circumstances where a direct comparison is not possible. To distinguish the new disclosure framework from the previous RDR framework, it will be referred to as the 'Simplified Disclosures' framework.

      3.             While the Board has decided not to adopt the IFRS for SMEs Standard as an alternative for Tier 2 reporting[51], the IASB's assessment of user needs and cost-benefit considerations in relation to the disclosures for this group of entities will be similarly relevant to Australian for-profit private sector entities without public accountability. The Board therefore considers the IFRS for SMEs based disclosures an appropriate starting point for developing a disclosure Standard for this group of entities.

      4.             The Simplified Disclosures framework is based on the premise that the disclosures in the IFRS for SMEs Standard should be retained where the R&M requirements and options are the same or similar in the IFRS for SMEs Standard and full IFRS. Disclosures relating to R&M options or treatments in the IFRS for SMEs Standard that are not available in full IFRS will be removed. Disclosures have only been added in comparison with the IFRS for SMEs Standard base where the R&M principles were significantly different or certain topics are not addressed under the IFRS for SMEs Standard.

      5.             In considering the IFRS for SMEs Standard, the Board noted that the nature and degree of the differences between the disclosures in full IFRS Standards and the disclosures in the IFRS for SMEs Standard is determined on the basis of users' needs and cost-benefit analyses[52]. The Board noted that the overall increase in disclosures for entities transitioning from SPFS (eg related party and financial instrument disclosures) offsets the loss of some disclosures as a result of not having to fully comply with AASB 101, AASB 107, AASB 108, AASB 1048 and AASB 1054. In some instances, based on user feedback, public policy interest (eg audit fees and tax reconciliation – see paragraphs BC75 and BC79–80) or to reflect Australian specific issues (eg imputation credits – see paragraphs BC83-BC84), the Board has retained additional disclosures above IFRS for SMEs.

      6.             The disclosure requirements in the IFRS for SMEs Standard are therefore substantially reduced when compared with the disclosure requirements in full IFRS Standards. The IASB identified the following four principles as being used for the