Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p7
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 7/40)
Character Range: 56421–59472

financial statements would help reduce the disclosure burden of NFP entities significantly.

Applicability of the Different Tiers to For-Profit Entities

Public Accountability
BC25            The Board concluded that for-profit entities that are publicly accountable (as defined in International Financial Reporting Standard for Small and Medium-sized Entities [IFRS for SMEs]) should be required to apply full IFRSs as adopted in Australia.  This is on the basis of consistency with international reporting requirements in the for-profit private sector.  The Board noted that, since Australia has adopted full IFRSs, it would be logical to use the public accountability notion used by the IASB in determining which entities in the for-profit sector should apply Australian Accounting Standards in full.
BC26            The Board acknowledged constituents' comments about some aspects of the definition of public accountability that the application of the definition in some cases may involve interpretation or judgement.  Some respondents to ED 192 noted it would be helpful for the Board to clarify certain terms used in the definition.  These include the term 'public market' referred to in the first leg of the definition and the terms 'fiduciary', 'broad', 'outsiders' and 'primary business' referred to in the second leg of the definition.  However, the Board noted it is not a policy of the Board to further interpret the IASB's terms and definitions.  Accordingly, the Board decided that, instead of interpreting the terms in the definition, AASB 1053 should identify entities that the Board deems to be publicly accountable in the Australian context, to supplement the IASB's definition of public accountability (see Appendix B of AASB 1053).
BC27            In relation to identifying entities that should be deemed to be publicly accountable in the Australian context, some respondents to ED 192 questioned whether captive insurers should be classified as publicly accountable since, in their view, there is unlikely to be a broad group of outsiders involved.  The Board noted that the nature of captive insurers varies.  Some only provide insurance to subsidiaries within their group while others also insure joint venture businesses.  Some captive insurers, such as association captive insurers, can insure a wide range of members.  Those that provide insurance to subsidiaries within groups may also deal with outsiders.  For example, they may offer products that have public beneficiaries (such as public or product liability, or professional indemnity).
BC28            The Board concluded that, whilst it expects that most insurance companies will be publicly accountable, there may be certain general insurers, such as some captive insurers, that may not be publicly accountable.  Accordingly, the Board did not deem all regulated insurance entities as publicly accountable.
BC29            Some respondents to ED 192 also questioned whether Small Australian Prudential Regulation Authority (APRA) Funds (SAFs) should be deemed to be