Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p12
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 12/47)
Character Range: 51596–58682

financial statements for such entities as part of Phase 1.

     BC33            Consequently, Phase 1 is intended to allow entities to maintain compliance with IFRS Standards, not to extend requirements for entities to prepare general purpose financial statements if they are not currently required by legislation to prepare financial statements.  To ensure that Phase 1 did not unintentionally require such entities to prepare general purpose financial statements, the Board decided to limit Phase 1 to for-profit private sector entities that have public accountability and are required by legislation to comply with Australian Accounting Standards.  This ensures the reporting requirements of entities with public accountability that do not have a legislative requirement to prepare financial statements will not be affected by Phase 1.  The appropriateness of this limitation will however be reconsidered as part of Phase 2 after further research and outreach.  The Board also confirmed that those for-profit entities wanting to voluntarily comply with Tier 1 and IFRS Standards should be permitted to do so, including for-profit entities in the public sector.

Maintaining two conceptual frameworks

     BC34            When deciding how to implement Option 1 for Phase 1, the Board considered the following alternatives:

                                                     Option 1                                                                                                                                                                                                                                                          Option 2                                                                                                                                                                                                                                                       Option 3                                                                                                                                              Option 4
                                                     Two conceptual frameworks:                                                                                                                                                                                                                                        One conceptual framework:                                                                                                                                                                                                                                      Two conceptual frameworks:                                                                                                                            One conceptual framework:
Entities applying the revised Conceptual Framework:    1         Revised Conceptual Framework.                                                                                                                                                                                                                           1(a)  Revised Conceptual Framework.                                                                                                                                                                                                                            1         Revised Conceptual Framework.                                                                                                               1(a)  Revised Conceptual Framework.
Other entities:                                        2         Existing Conceptual Framework and SAC 1[1].                                                                                                                                                                                                             1(b) Revised Conceptual Framework minus Chapter 3[2], which is replaced by SAC 1.                                                                                                                                                                              2         Existing Conceptual Framework and SAC 1.                                                                                                    1(b) Revised Conceptual Framework minus Chapter 3, which is replaced by SAC 1.
Consequential amendments:                            One set of Australian Accounting Standards that continue to be updated for both for-profit and not-for-profit changes.                                                                                                                                            One set of Australian Accounting Standards that continue to be updated for both for-profit and not-for-profit changes.                                                                                                                                         Two sets of Australian Accounting Standards.                                                                                                          Up to two sets of Australian Accounting Standards.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        -          One set that continues to be updated for for-profit changes.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        -          One set reflecting the requirements in effect immediately prior to the revised Conceptual Framework being issued which are not updated.
The reporting entity clash                           Addressed in Phase 1, by inserting paragraph AusCF1 into each Australian Accounting Standard that contains the term reporting entity.  Paragraph AusCF1 would direct other entities to AASB 1057[3] (and SAC 1) for the definition of the term reporting entity.  Addressed in Phase 1, by inserting paragraph AusCF1 into each Australian Accounting Standard that contains the term reporting entity.  Paragraph AusCF1 would direct other entities to AASB 1057 (and SAC 1) for the definition of the term reporting entity.  Tolerated in Phase 1.  That is, unlike in Option 1,