Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:8:p1
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 8 (pt 1/28)
Character Range: 162552–165701

8                           Entities that elect (ie voluntarily) to prepare GPFS (eg for-profit public sector entities or other for-profit private sector entities)                                                                                                                             In scope

     BC94            Having determined the entities to be caught within the scope of this Standard, the Board considered how best to revise the Tier 2 GPFS framework to appropriately balance the costs and benefits of this Standard. The following section summarises the Board's deliberations on revising the Tier 2 GPFS disclosure framework (that is detailed in the separate, but related Standard, AASB 1060).

Tier 2 GPFS Framework

     BC95            As noted in paragraph BC6, the Board acknowledges that it would be inappropriate to remove the ability of certain for-profit private sector entities to prepare SPFS where they are required to prepare financial statements that comply with AAS, and replace them with GPFS, without reconsidering the Tier 2 GPFS framework, because the current Tier 2 GPFS framework is considered too onerous. The Phase 2 approach in ITC 39 contemplated revising the Tier 2 GPFS framework in AASB 1053 to include one of two alternatives as noted in paragraph BC56:

          (a)                    RDR – The existing Tier 2 GPFS framework as currently exists in AASB 1053, consisting of full R&M, including consolidation and equity accounting (where applicable) with reduced disclosures from each applicable AAS; and

          (b)                   SDR – A new Tier 2 GPFS framework that would consist of full R&M including consolidation and equity accounting (where applicable), however with specified disclosures from some AAS. Those standards are those that are currently mandatory for entities required to prepare financial statements in accordance with Chapter 2M of the Corporations Act 2001, being AASB 101, AASB 107, AASB 108, AASB 1048 and AASB 1054, plus the disclosures required by AASB 124 Related Party Disclosures, AASB 136 Impairment of Assets, AASB 15 Revenue from Contracts with Customers and AASB 112 Income Taxes.

     BC96            As noted in paragraph BC58, the feedback from the roundtables, user and preparer surveys and submissions on Phase 2 of ITC 39 indicated that:

          (a)                    RDR has too many disclosure requirements; and

          (b)                   SDR was too much in some ways but fell short in many other ways. For example, the feedback received from roundtables, user and preparer surveys and submissions on Phase 2 of ITC 39 was that whilst the disclosures in SDR are important, requiring all disclosures from those nine Standards was too much. Most participants further suggested that SDR might not be appropriate for all industry sectors and is missing some critical disclosures to help predict the viability of an entity such as liquidity, contingent liabilities, subsequent events and commitments.

     BC97            As a consequence, the Board decided to propose a third alternative to replace the current disclosure aspects of Tier 2 GPFS