Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p86
Version: federal_register_of_legislation:F2025C00172
Segment Type: other
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Character Range: 225685–228797

Draft addressed relief in relation to both not-for-profit entities and entities applying reduced disclosure requirements under AASB 1053 Application of Tiers of Australian Accounting Standards, the table added to the AASB 127 guidance by AASB 2011-5 addresses not-for-profit entities but not reduced disclosure requirements.

Reduced disclosure requirements
BC20 Exposure Draft ED 205, in addition to addressing relief for not-for-profit entities, also proposed the extension of relief to entities applying Australian Accounting Standards – Reduced Disclosure Requirements under AASB 1053.  The AASB decided that relief should be extended to Tier 2 entities, either on the same basis as for not-for-profit entities or as addressed in paragraphs BC14 and BC15.  Accounting Standard AASB 2011-6 provides this relief.  That Standard also expands the table in the Australian application guidance accompanying AASB 127 to address entities applying reduced disclosure requirements.
BC21 Whereas AASB 2011-5 applies to annual reporting periods beginning on or after 1 July 2011, AASB 2011‑6 applies to annual reporting periods beginning on or after 1 July 2013, being the application date of the reduced disclosure requirements under AASB 1053.  Accordingly, two amending Standards were prepared to reflect the different application dates.  Early application of each Standard is permitted.  Early application of AASB 2011-6 requires early application of AASB 1053.

Basis for Conclusions on AASB 2013-5 and dissenting views
This Basis for Conclusions accompanies, but is not part of, AASB 10. The Basis for Conclusions was originally published with AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities.

BC1 This Basis for Conclusions summarises the Australian Accounting Standards Board's (AASB) considerations in issuing AASB 2013-5 Amendments to Australian Accounting Standard – Investment Entities.  Individual Board members gave greater weight to some factors than to others.

Background
BC2 AASB 2013-5 is the result of the AASB's due process, which began when the AASB issued Exposure Draft ED 220 Investment Entities (AASB ED 220) in September 2011 (incorporating International Accounting Standards Board [IASB] ED/2011/4 Investment Entities). That Exposure Draft proposed that an investment entity be required to account for investees that it controls at fair value through profit or loss, rather than consolidate them.
BC3 In the material accompanying ED 220, AASB members expressed concerns with the ED/2011/4 proposals, including:
(a) the exception to consolidation goes against the application of the well-established accounting concept of control, which is designed to result in the presentation of all the assets, liabilities, income and expenses of the group, and the amendments would result in a loss of relevant information for users of financial statements;
(b) the basis of the exception to consolidation is the type of entity, rather than the underlying relationship between investors and investees; and
(c) there are no clear principles underpinning the classification