Document ID: chunk:federal_register_of_legislation:F2023C00190:reg:9b:p31
Version: federal_register_of_legislation:F2023C00190
Segment Type: reg
Provision Reference: reg 9B (pt 31/41)
Character Range: 194203–197111

Following the consultation period, and after considering stakeholder comments, the Board decided to proceed with the proposals in ED 302, but with some significant changes.  The Board's bases for the proposals it decided to retain are articulated in the Basis for Conclusions accompanying ED 302, and are summarised here in paragraphs BC3-BC27.  Accordingly, as noted in paragraph BC2(b), after providing an overview of the feedback received on ED 302, the remainder of this Basis for Conclusions focuses primarily on the significant proposals in ED 302 that the Board decided to change, and the rationale for doing so.  It also addresses some issues raised by respondents to ED 302 that, although they did not give rise to changes to the proposals, warrant further explanation.

Feedback from respondents on ED 302

     BC31            The Board received 13 formal comment letters on ED 302, with a mix of views from respondents.

     BC32            A number of respondents expressed concern that the cost of implementing the ED 302 proposals would exceed any benefits.  This was particularly the case for those for-profit private sector entities with a legislative requirement to comply with AAS, given the proposals for these entities were proposed to be effective from 1 July 2020 and therefore would apply for only one year.  This was because, as noted above, the amendments in AASB 2020-2 removed the ability of these entities to prepare SPFS for annual reporting periods beginning on or after 1 July 2021.

     BC33            A number of respondents also expressed concern that the proposed effective date of 1 July 2020 would provide insufficient time for entities to prepare for the new requirements.  Furthermore, some respondents suggested delaying the proposed effective date to align with the operative date of AASB 2020-2.  This would effectively exclude entities with a legislative requirement to comply with AAS from the scope of the proposals as well.

     BC34            The Board considered this feedback and decided, for the reasons noted in paragraphs BC38 and BC39, it was appropriate to delay the effective date of the final amendments and in doing so exclude those entities with a legislative requirement to comply with AAS or accounting standards from the scope of the Standard.

     BC35            Other significant matters considered by the Board in making this and other decisions are addressed below.

Scope

     BC36            The Board decided this Standard should apply only to those for-profit private sector entities required only by their constituting document or another document to prepare financial statements that comply with AAS, provided the relevant document was created before 1 July 2021 and not amended on or after that date.  In paragraph BC85 of the Basis for Conclusions on AASB 2020-2, the Board explained that these entities were excluded from the