Document ID: chunk:federal_register_of_legislation:F2024L00378:body:0:p4
Version: federal_register_of_legislation:F2024L00378
Segment Type: other
Provision Reference: 
Character Range: 9019–12332

Standard. It sets out the reasons why the Board developed the Standard, the approach taken to developing the Standard and the bases for the key decisions made. In making decisions, individual Board members gave greater weight to some factors than to others.

Background

     Tier 1 amendments
     BC2               In June 2023, the AASB issued AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements. The Standard amends AASB 107 Statement of Cash Flows and AASB 7 Financial Instruments: Disclosures to require an entity to provide additional disclosures about its supplier finance arrangements.
     BC3               The additional information will enable users of financial statements to assess how supplier finance arrangements affect an entity's liabilities, cash flows and exposure to liquidity risk. The amendments require an entity to disclose the terms and conditions of the arrangements, the carrying amount of the liabilities that are part of the arrangements, the carrying amounts of those liabilities for which the suppliers have already received payment from the finance providers, the range of payment due dates and the effect of non-cash changes.
     BC4               These amendments arose from the issuance of International Financial Reporting Standard Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures) by the International Accounting Standards Board (IASB) in May 2023.
     BC5               The amendments made by AASB 2023-1 introduced disclosure requirements for entities applying Tier 1 reporting requirements. Therefore, it was appropriate for the Board to consider whether similar amendments to the Tier 2 Standard AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities were required.

Issue of Exposure Draft ED 328
     BC6               The Board's proposals with respect to the amendments finalised in this Standard were exposed for public comment in December 2023 through Exposure Draft ED 328 Supplier Finance Arrangements: Tier 2 Disclosures.
     BC7               The significant issues considered by the Board in developing ED 328 are addressed in the following section.

     Relevance of the amendments to AASB 1060
     BC8               The AASB For-Profit Entity Standard-Setting Framework and the AASB Not-For-Profit Entity Standard-Setting Framework outline the approach adopted by the Board for considering whether to add to or amend disclosure requirements in AASB 1060 when the IASB makes amendments to full IFRS Standards.
     BC9               The standard-setting frameworks first consider whether the amendments introduce a significant recognition and measurement difference between full IFRS Standards and the IFRS for SMEs Accounting Standard. If they do not, the standard-setting frameworks state that no further action is required unless:
          (a)                    the disclosures address a matter of public policy;
          (b)                   the disclosures are of particular relevance in the Australian environment; or
          (c)                    the amendments clarify or reduce existing disclosure requirements in full IFRS Standards.
     BC10            The