Document ID: chunk:federal_register_of_legislation:F2023C00190:reg:9b:p9
Version: federal_register_of_legislation:F2023C00190
Segment Type: reg
Provision Reference: reg 9B (pt 9/41)
Character Range: 132532–135683

process, making any consequential amendments to APES 205 consistent with the amendments to the affected Australian Accounting Standard proposed in ED 293.  Subsequent to the issue of ED 293, the Board noted that the matter was considered by the APESB, and that the APESB were not proposing amendments to APES 205 (of a nature consistent with those proposed in ED 293) at that time, however they did consider it an important issue to seek stakeholder views on.  Accordingly, the Explanatory Memorandum to Exposure Draft 03/19 Proposed revisions to APESB Pronouncements included commentary on this matter and sought specific feedback from their stakeholders.  After considering this feedback, the APESB decided not to amend APES 205.

     BC22            For the reasons outlined in paragraph BC20-BC21 above, the Board decided it was not necessary to broaden the application paragraphs of AASB 101 or AASB 1054, and therefore ED 293 proposed the amendment should apply in the manner described in paragraph BC19(c) above.

     BC23            The Board then considered whether the disclosure requirement should be effected through AASB 101 or AASB 1054.  They were identified as the only two reasonable candidates as vehicles for housing the requirements because they already have related requirements: AASB 101 includes requirements relating to the disclosure of accounting policies and compliance with Standards, and AASB 1054 includes requirements relating to compliance with Australian Accounting Standards and explicitly refers to special purpose financial statements.  The Board's preferred approach was to amend AASB 1054 because the amendment is Australian-specific, specifically relates to special purpose financial statements, and is consistent with the objective of AASB 1054 "… to set out Australian-specific disclosure requirements that are in addition to the disclosure requirements of International Financial Reporting Standards".

Disclosures regarding the basis for the decision to prepare special purpose financial statements

     BC24            Paragraph 9 of AASB 1054 requires an entity to disclose whether the financial statements are general purpose or special purpose.  The Board decided that entities should also be required to disclose the reasons why the preparation of special purpose financial statements was considered appropriate.

     BC25            In making this decision, the Board noted that APES 205 contains a requirement for entities to identify "the purpose for which the Special Purpose Financial Statements have been prepared"[17] and therefore entities within the scope of APES 205 should already be including this information in special purpose financial statements, however mandating it in an Australian Accounting Standard would help ensure users are provided with useful information.

     BC26            The Board also noted the requirements of Australian Auditing Standards and the existing responsibilities of those charged with governance and auditors with respect to the selection and application of an entity's financial reporting framework.  In particular, the Board noted the requirements in