Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p13
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 13/40)
Character Range: 73119–76185

concern that size thresholds would give a misleading perception of an increase in public interest proportional to an increase in an entity's size.
BC51            Consistent with the Board's conclusions in relation to size thresholds for for-profit entities, the Board concluded that size thresholds do not provide a robust basis for differential reporting purposes in a NFP context because of the complexities involved and that the disadvantages of using size thresholds would exceed any advantages that may arise from their use.  The Board also noted that keeping size thresholds up-to-date would entail additional maintenance and monitoring costs.

Governments
BC52            The Board concluded that the Australian Government and State, Territory and Local Governments should be subject to Tier 1 requirements.  This is on the basis that these entities clearly satisfy the criteria cited in paragraph BC63 as a whole, including in particular their coercive power to tax, rate or levy.  Consistent with this conclusion, the Board also decided that General Government Sectors of the Australian Government and State and Territory Governments should continue to apply AASB 1049 Whole of Government and General Government Sector Financial Reporting, without the reduction in disclosures provided by Tier 2.

Public Sector NFP Universities
BC53            ED 192 proposed that universities in the public sector should be subject to Tier 1 requirements.  Some respondents concurred with the proposal on the grounds that universities in the public sector are government funded.  However, others had reservations, which included the following:
(a)                    since universities are statutory bodies (in some jurisdictions), then they should be subject to the same reporting requirements that apply to other statutory bodies in the relevant jurisdiction – that is, the decision as to whether universities should be subject to Tier 1 or Tier 2 requirements should be left to the local regulator;
(b)                   while it is acknowledged they are large entities, there would appear to be no conceptual reason mandating the classification of universities under Tier 1 – for example, they have no coercive power to tax, rate or levy;
(c)                    funding by government or receipt of voluntary donations, by itself, does not suffice to classify universities as Tier 1 entities since many other public sector entities fall in the same category; and
(d)                   the proposal would not be consistent with transaction-neutrality principles, because it would result in public sector NFP universities being treated differently from private sector universities.
BC54            The Board noted that because universities differ from jurisdiction to jurisdiction, it may not enable regulators in those jurisdictions to apply criteria that they regard as appropriate in their circumstances, if the Board were to make a universal decision on the reporting Tier under which they fall.  Accordingly the Board decided that universities should be allowed to