Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p44
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 44/73)
Character Range: 284141–287038

than to transactions and other events and conditions encountered by entities without public accountability.

     BC9 Applying the practical expedient in AASB 16 paragraph 46A is an accounting policy choice. Entities would therefore already be required to explain if they have used the expedient, and to what extent, when describing their accounting policies and the basis of preparation of their financial statements under paragraph 95(b) of AASB 1060. However, the Board noted that adding a specific disclosure requirement to AASB 1060 would ensure all entities applying the expedient state this fact in their basis of preparation, regardless of whether they are reporting under Tier 1 or Tier 2. Providing information about accounting policy choices made by the entity is further supported by the principle in paragraph BC8(d).

     BC10 In relation to the amount recognised in profit or loss for the reporting period, the Board noted that this provides information about the disaggregation of amounts presented in the statement of profit or loss, and is hence supported by paragraph BC8(e). The disclosure may also provide further insights about the entity's liquidity and solvency (paragraph BC8(b)) and would improve the comparability of financial statements of lessees that have applied the practical expedient and those that have not.

     BC11 Furthermore, if the entity had applied AASB 16 in a prior period, adopting the practical expedient would be a change in accounting policy and the entity would have to disclose the impact of this change on the current and prior periods under paragraph 28(f) of AASB 108, but for the disclosure relief added to AASB 16 (paragraph C20B) by AASB 2020-4. Noting that there should be no impact on prior periods as the practical expedient is limited to COVID-19-related rent concessions, disclosing the amount recognised in profit or loss for the reporting period would provide essentially the same information as required under AASB 1060 paragraph 106(b), which is the equivalent paragraph to AASB 108 paragraph 28(f). Requiring disclosure of the amount recognised in profit or loss but providing relief from compliance with paragraph 106(b) would therefore not result in any additional disclosures being required under AASB 1060.

     BC12 Considering that the proposed new requirements are not expected to result in an increase in disclosures, the Board agreed to propose amendments to AASB 1060 that would replicate the disclosure changes made to AASB 16 and AASB 108 by AASB 2020-4. The Board further noted that the additional disclosures would apply only to COVID-19-related rent concessions and were warranted because of the special circumstances leading to the practical expedient in AASB 16. The amendments do not alter the fact that disclosure of variable lease payments is not required under the IFRS for SMEs Standard and therefore also