Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:8:p9
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 8 (pt 9/28)
Character Range: 184662–187758

activities related to Phase 2 of ITC 39 and specifically on transitional matters was mixed. Whilst some constituents agreed that AASB 1 would be sufficient to facilitate transition, others were either unclear on whether AASB 1 would be sufficient, or argued that more transitional relief was necessary. The Board noted two common areas of suggestion for transitional relief:

          (a)                    relief from consolidation and equity accounting, particularly in relation to the retrospective application of AASB 3 Business Combinations; and

          (b)                   relief from the requirement to restate the comparative period on transition from SPFS to Tier 2 GPFS.

     However, despite requesting more information, stakeholders did not articulate the specific aspects of the above-mentioned transitional issues that would be particularly costly or onerous.

Options considered

     BC124        In deliberating the options for transitional relief, the Board noted AASB 1053 requires an entity to either apply all the relevant requirements in AASB 1 or the requirements in AASB 108 to transition from SPFS to Tier 2 GPFS, if that entity had not applied or had only selectively applied the R&M requirements in AAS.

     BC125        In light of constituent feedback that consolidation and equity accounting would be the most challenging aspects of transition, the Board considered the relief provided by AASB 1 from the need to retrospectively account for past business combinations (a specific challenge noted for consolidation and equity accounting). The Board concluded that the application of AASB 1 provides significant and sufficient relief to address the stakeholder concerns noted in paragraph BC123(a).

     BC126        The Board also noted:

          (a)                    Doubling of thresholds for large proprietary companies: As noted in paragraph BC35, Treasury doubled the thresholds used for determining what constitutes a large proprietary company. Based on the data available from a data aggregator for the latest lodgements by all filing entities as at 30 June 2018 (being before the doubling of the thresholds), as noted in paragraph BC72, there were a total of 6,763 large proprietary companies that had lodged financial statements with ASIC, out of which 5,500 entities filed SPFS. The doubling of the thresholds reduced the total population of large proprietary companies by approximately one third. Based on the revised thresholds, the same data from a data aggregator indicates that a maximum of approximately 3,666 large proprietary companies would be required by this Standard to transition from SPFS to Tier 2 GPFS.

          In addition, the Board noted the Explanatory Statement accompanying the revision of the thresholds that had outlined the expectation that larger entities are more likely to have users that are dependent on the entity's GPFS. Further, the Explanatory Statement also noted that the average access rates for financial reports through ASIC for the remaining population of large proprietary companies is significantly