Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p17
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 17/73)
Character Range: 209614–212842

not required. Further discussion of the Board's consideration on this matter is available in AASB 2020-2 paragraphs BC99−BC107.

      4.                However, separate targeted consultations will be undertaken in relation to the implementation of the IASB's revised Conceptual Framework by not-for-profit (NFP) private and public sector entities which may result in more than two tiers for those sectors, as the characteristics of those sectors are quite different. For these entities, this Standard is therefore an interim measure until more progress is made through further consultation and outreach.

      5.             After having considered the various options outlined below and the feedback received on ED 295 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities, the Board is of the view that this Standard addresses stakeholders' concerns and provides an appropriate balance between user needs and preparer costs.

Options considered: why using the IFRS for SMEs Standard as the basis for the new Tier 2 Standard?

      1.             In developing AASB 1060, the Board considered the following options:

               1.                     retain the current Tier 2 disclosure requirements (RDR framework);

               2.                    adopt the alternative proposed in ITC 39 (SDR framework – see paragraph BC13);

               3.                     revisit the proposals in ED 277 Reduced Disclosures Requirements for Tier 2 Entities; or

               4.                    develop a new disclosure Standard based on the IFRS for SMEs Standard.

RDR and SDR frameworks – feedback from ITC 39

      1.             In ITC 39, the Board proposed to replace the current RDR framework with a revised disclosure framework and proposed two alternatives for Tier 2 (See Specific Matter for Comment 12 of ITC 39). Alternative 1 was the existing Tier 2 RDR under AASB 1053 Application of Tiers of Australian Accounting Standards which requires compliance with the full R&M requirements of AAS (as amended for NFP specific issues) and with minimum disclosures specified in each Standard.

      2.             The second proposed alternative, the Specified Disclosure Requirement (SDR), was a revised disclosure framework. It required full R&M requirements of AAS (as amended for NFP specific issues) and included the disclosure of those Standards that are currently mandatory for entities required to prepare financial statements in accordance with Chapter 2M of the Corporations Act 2001 (Cwth), being AASB 101 Presentation of Financial Statements, AASB 107 Statement of Cash Flows, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, AASB 1048 Interpretation of Standards and AASB 1054 Australian Additional Disclosures, and disclosures required by AASB 15 Revenue from Contracts with Customers, AASB 112 Income Taxes, AASB 124 Related Party Disclosures and AASB 136 Impairment of Assets.

      3.             After issuing ITC 39, the Board held targeted outreach with key stakeholders, including State, Territory and National regulators, audit offices, accounting firms, the Australian Securities Exchange (ASX), the