Document ID: chunk:federal_register_of_legislation:F2021C01247:reg:10:p5
Version: federal_register_of_legislation:F2021C01247
Segment Type: reg
Provision Reference: reg 10 (pt 5/21)
Character Range: 18415–21544

the applicable financial reporting framework in the special purpose financial report to imply full compliance with the financial reporting framework established by the authorised or recognised standards setting organisation or by law or regulation.  In the above example of the contract, the description of the applicable financial reporting framework may refer to the financial reporting provisions of the contract, rather than make any reference to the Financial Reporting Standards of Jurisdiction X.

A3.             In the circumstances described in paragraph A2, the special purpose framework may not be a fair presentation framework even if the financial reporting framework on which it is based is a fair presentation framework.  This is because the special purpose framework may not comply with all the requirements of the financial reporting framework established by the authorised or recognised standards setting organisation or by law or regulation that are necessary to achieve fair presentation of the financial report.

A4.             A financial report prepared in accordance with a special purpose framework may be the only financial report an entity prepares.  In such circumstances, that financial report may be used by users other than those for whom the financial reporting framework is designed.  Despite the broad distribution of the financial report in those circumstances, the financial report is still considered to be a special purpose financial report for purposes of the Australian Auditing Standards.  The requirements in paragraphs 13–14 are designed to avoid misunderstandings about the purpose for which the financial report is prepared.  Disclosures comprise explanatory or descriptive information, set out as required, expressly permitted or otherwise allowed by the applicable financial reporting framework, on the face of a financial report, or in the notes, or incorporated therein by cross‑reference.[9]

Considerations When Accepting the Engagement

Acceptability of the Financial Reporting Framework (Ref: Para. 8)

A5.             In the case of a special purpose financial report, the financial information needs of the intended users are a key factor in determining the acceptability of the financial reporting framework applied in the preparation of the financial report.

A6.             The applicable financial reporting framework may encompass the financial reporting standards established by an organisation that is authorised or recognised to promulgate standards for a special purpose financial report.  In that case, those standards will be presumed acceptable for that purpose if the organisation follows an established and transparent process involving deliberation and consideration of the views of relevant stakeholders.  In some jurisdictions, law or regulation may prescribe the financial reporting framework to be used by management in the preparation of a special purpose financial report for a certain type of entity.  For example, a regulator may establish financial reporting provisions to meet the requirements of that regulator.  In the absence of indications to