Document ID: chunk:federal_register_of_legislation:F2022L01041:reg:4:p5
Version: federal_register_of_legislation:F2022L01041
Segment Type: reg
Provision Reference: reg 4 (pt 5/18)
Character Range: 58940–61836

Compliance with Recognition and Measurement Requirements (July 2019). ED 293 proposed requiring for-profit and not-for-profit private sector entities lodging SPFS with either the ASIC or the Australian Charities and Not-for-profits Commission (ACNC) to disclose information in their SPFS that would allow users to understand the extent of compliance or otherwise of the entity's accounting policies with the R&M requirements in AAS.[4]
     BC10            The feedback received on ED 293 indicated the majority of respondents agreed the proposals would increase the transparency and comparability of SPFS. However, due to the short time within which the proposed requirements would become mandatory in light of the expected timing of the release of a Standard based on ED 297's proposals, respondents were particularly concerned about the costs of the proposals exceeding any benefits for for-profit private sector entities. This is because the proposal in ED 297 to remove the ability for certain for-profit private sector entities to prepare SPFS when they are required to comply with AAS was expected to be completed and, as noted in paragraph BC3, operative for annual reporting periods beginning on or after 1 July 2020.
     BC11            After considering this feedback, the Board decided at that time the proposals in ED 293 should apply only to not-for-profit private sector entities. The Board decided it would revisit the application of the proposals in ED 293 for for-profit private sector entities if the proposals in ED 297 were not finalised as proposed. Consequently, the Board issued AASB 2019-4 Amendments to Australian Accounting Standards – Disclosure in Special Purpose Financial Statements of Not-for-Profit Private Sector Entities on Compliance with Recognition and Measurement Requirements (November 2019), operative for annual reporting periods ending on or after 30 June 2020.
     BC12            As indicated in paragraph BC3, the Board decided the effective date of AASB 2020-2 should be one year later than what was proposed in ED 297. It arrived at this decision after considering feedback from respondents to ED 297 that entities needed more time to prepare for the implementation of the proposals – see also the reasons noted in paragraph BC149 of the Basis for Conclusions on AASB 2020-2. As a consequence of the deferral of the effective date, the Board decided it was necessary to revisit the proposals in ED 293 in relation to for-profit private sector entities that were not yet required to apply AASB 2020-2, as well as for the types of entities referred to in paragraph BC4(b). Consequently, ED 302 was issued in June 2020, which as noted in paragraph BC2 led to the development of this Standard.

Issue of Exposure Draft ED 302
     BC13            The significant issues considered by the Board in developing ED 302 that are pertinent to this Standard