Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:8:p12
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 8 (pt 12/28)
Character Range: 193451–205378

in their reporting / consolidation pack (which would have been derived from acquisition date fair values) to be deemed cost in their individual financial statements (subject to requiring them to recognise only those assets and liabilities that qualify for recognition under AAS in the subsidiary's own financial statements).   The Board noted that advantages of this relief would include:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (a)     no need to keep two sets of parallel accounting records (ie one set for group reporting purposes and another set for its own mandatory Tier 2 GPFS); and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (b)     opening balances would still be based on AAS principles, albeit measured at a different point in time.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           However, the Board decided not to provide this relief:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (a)     for the reasons noted in paragraph BC126;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (b)     because this relief would have been inconsistent with The AASB's For-Profit Entity Standard-Setting Framework's presumption that IFRS Standards are an appropriate base;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (c)     because anecdotally, adjusting balances to be consistent with AAS is not the most difficult area of transition, rather it is more difficult to restate prior periods;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (d)     because the relief would only be available for a limited number of entities, which would likely be foreign-controlled and hence subject to public interest. It was not clear to the Board, the number of entities that would be able to utilise this relief in any case; and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (e)     because such relief would reduce comparability with other entities that are transitioning from SPFS to GPFS.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           The Board considered whether AASB 1 effectively provided such relief through other exemptions (such as event driven fair values), but did not form a view on this matter.

Relief from recognising 'deemed goodwill' if applying paragraph C4(j) of AASB 1.                              Provide a parent entity applying the relief in AASB 1 Appendix C in relation to previously unconsolidated subsidiaries with an option to write off 'deemed goodwill' immediately in retained earnings, rather than recognise it and then be required to undertake day 1 and annual impairment testing.                                                                                                                                                                                       The Board noted that advantages of this relief would include:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (a)     the potential to reduce the cost of undertaking an impairment test at the date of transition and ongoing annually; and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (b)     that it would provide relief for entities consolidating for the first time, a key concern of respondents to Phase 2 of ITC 39.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           However, the Board decided not to provide this relief:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (a)     for the reasons noted in paragraph BC126;

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (b)     because this relief would have been inconsistent with The AASB's For-Profit Entity Standard-Setting Framework's presumption that IFRS Standards are an appropriate base. In particular, the Board noted that this amendment would fundamentally change the R&M requirements of AASB 1; and

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (c)     because this relief could lead to significant loss of information about impairment for