Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p43
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 43/73)
Character Range: 281338–284417

below.

     In addition to applying these principles, the Board also considers whether to add disclosures to address matters of public policy or to reflect Australian-specific issues.

     BC5 Based on these principles, the Board agreed to use the following approach when considering whether to add to or amend disclosure requirements in AASB 1060 in relation to amendments made by the IASB to full IFRS Standards:

          (a) if the amendments introduce significant R&M differences between full IFRS Standards and the IFRS for SMEs Standard, apply the principles applied by the IASB in developing the IFRS for SMEs Standard, as summarised in paragraph BC8;

          (b) if the amendments do not introduce significant R&M differences, no further action is required unless the disclosures address a matter of public policy or are of particular relevance in the Australian environment.

     BC6 In relation to the COVID-19-related rent concessions, the Board noted that the IFRS for SMEs Standard does not discuss how to account for lease modifications. Paragraph 10.4 of the IFRS for SMEs Standard explains that management shall use its judgement in developing and applying accounting policies that result in relevant and reliable information. Paragraph 10.6 further states that in making the judgement, management may also consider the requirements and guidance in full IFRS Standards dealing with similar and related issues. It is therefore possible that the expedient provided under full IFRS Standards may not result in significant differences in the R&M requirements. On that basis, it would arguably not be necessary to consider whether to add any disclosures to AASB 1060.

     BC7 However, as the practical expedient introduces a significant exemption from the accounting principles in AASB 16 that is only available to entities in the limited circumstances set out in AASB 16 paragraph 46B, the Board was of the view that this would be a situation where additional disclosures may be warranted.

     BC8 The Board therefore referred to the principles applied by the IASB in developing the disclosures in the IFRS for SMEs Standard. These principles consider that users of the financial statements of for-profit entities that are not publicly accountable are particularly interested in information about:

          (a) short-term cash flows and obligations, commitments or contingencies, whether or not recognised as liabilities;

          (b) liquidity and solvency;

          (c) measurement uncertainties;

          (d) accounting policy choices; and

          (e) disaggregations of amounts presented in the financial statements.

     The principles further note that some disclosures in full IFRS Standards are more relevant to investment decisions in public capital markets than to transactions and other events and conditions encountered by entities without public accountability.

     BC9 Applying the practical expedient in AASB 16 paragraph 46A is an accounting policy choice. Entities would therefore already be required to explain if they have