Document ID: chunk:federal_register_of_legislation:F2022L00704:body:0:p4
Version: federal_register_of_legislation:F2022L00704
Segment Type: other
Provision Reference: 
Character Range: 8872–12171

in both financial statements, except for consolidation adjustments.

Amendments to AASB 1053
     6                        Paragraph 20A and a related heading are added after paragraph 20.

          Reapplication of Tier 2 Reporting Requirements in Initial Consolidated Financial Statements
          20A A for-profit private sector entity that:
               (a) prepared its most recent previous annual financial statements in compliance with Tier 2 reporting requirements, including an explicit and unreserved statement of compliance with Tier 2 reporting requirements;
               (b) did not present consolidated financial statements, on the basis that neither the parent nor the group was a reporting entity (as defined in AASB 1057); and
               (c) is preparing consolidated financial statements for the first time in compliance with Tier 2 – Simplified Disclosures;
               shall apply either:
               (d) all the relevant requirements of AASB 1; or
               (e) Tier 2 reporting requirements directly using the requirements in AASB 108.

Commencement of the legislative instrument
     7                        For legal purposes, this legislative instrument commences on 29 June 2022.

Basis for Conclusions

This Basis for Conclusions accompanies, but is not part of, AASB 2022-2 Amendments to Australian Accounting Standards – Extending Transition Relief under AASB 1.

Introduction
     BC1               This Basis for Conclusions summarises the Australian Accounting Standards Board's considerations in reaching the conclusions in this Standard. It sets out the reasons why the Board developed the Standard, the approach taken to developing the Standard and the bases for the key decisions made. In making decisions, individual Board members gave greater weight to some factors than to others.

Reasons for issuing this Standard
     BC2               For periods beginning on or after 1 July 2021, certain for-profit-private sector entities can no longer apply the reporting entity concept or prepare special purpose financial statements (SPFS) when the financial statements are required (by legislation or an entity's constituting or other document) to comply with Australian Accounting Standards or when legislation requires the financial statements to comply with accounting standards. This follows the issue of AASB 2020-2 Amendments to Australian Accounting Standards – Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities. Instead, entities within the scope of AASB 2020-2 will be required to prepare general purpose financial statements (GPFS). In addition, some of these entities may also be required to prepare consolidated financial statements for the first time if they historically applied the exemption in AASB 10 Consolidated Financial Statements that did not require the presentation of consolidated financial statements when neither the parent entity nor the group was a reporting entity.

Issue of Exposure Draft ED 315
     BC3               The Board's proposals with respect to the amendments finalised in this Standard were exposed for public comment in November 2021 through Exposure Draft ED 315 Extending Transition Relief under AASB 1.
     BC4               The significant issues