Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p43
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 43/47)
Character Range: 143962–146995

required, and if the for-profit financial reporting framework was determined not to be suitable for NFP entities, the for-profit proposals would be modified as needed. This assessment would be required, even if the for-profit and NFP reforms were undertaken concurrently.

Legislative references to AAS and the meaning of True and Fair

     BC76            The Board also conducted research (AASB Research Report No. 10 Legislative and Regulatory Financial Reporting Requirements (September 2019)) to identify those entities with financial reporting obligations under Federal and State/Territory legislation. The research grouped the identified financial reporting obligations into different categories, based on the nature of the financial reporting requirement (for example a requirement to prepare financial statements according to AASB accounting standards was categorised separately from a requirement to prepare financial information in accordance with AASB accounting standards, which would not require preparation of a complete set of financial statements as defined in paragraph 10 of AASB 101. This research was then used to determine which categories of for-profit private sector entities should be within the scope of this Standard.

     BC77            In particular, the Board considered whether entities that are required by legislation to prepare financial statements that give a true and fair view without reference to compliance with AAS at the same time (for example small co-operatives and entities reporting under state and territory gaming legislation) should be affected by this Standard. The Board noted the Corporations Act 2001 envisages compliance with the accounting standards might not necessarily result in financial statements that provide a true and fair view. In addition, the UK Financial Reporting Council paper True and Fair from June 2014 confirmed the primacy of the true and fair requirement above compliance with accounting standards. Following consultation with other regulators responsible for the legislation referring to true and fair, the Board considered that, at this time, it should be a matter for each regulator to decide as to how to interpret the relevant legislation in relation to 'true and fair view' and noted that to require compliance with AAS whenever legislation required entities to give a true and fair view could possibly have significant unforeseen consequences. Accordingly, the Board decided the application paragraphs of AAS in this Standard should not explicitly refer to true and fair at this time (see category 5) in the Summary of scope table in paragraph BC93 below).

     BC78            The Board also decided that for-profit private sector entities that are required under legislation to prepare financial information in accordance with AASB accounting standards (ie of which a complete set of financial statements under paragraph 10 of AASB 101 is not required) would not be within the scope of this Standard (see category 5 in the Summary of scope table