Document ID: chunk:federal_register_of_legislation:F2023C00190:reg:9b:p28
Version: federal_register_of_legislation:F2023C00190
Segment Type: reg
Provision Reference: reg 9B (pt 28/41)
Character Range: 185956–188871

the Board considered entities need to more clearly articulate the reasons why they prepare SPFS.  Reasons why SPFS have been prepared may include users of the financial statements being in a position to command the information they require.

Disclosure of accounting policies

     BC18            The Board noted many entities within the scope of the proposed amendments in ED 302 were not required by AAS to disclose information about the accounting policies applied in their SPFS.  Without this, information about the extent of the entity's compliance or otherwise with the R&M requirements in AAS might be incomplete.  Therefore, the Board decided to include in ED 302 a proposal to require entities to disclose information about the material accounting policies applied, including the measurement basis (or bases) used and information about changes in those accounting policies, such as the nature of the change and the reasons why the change was made.

     BC19            The Board noted that entities required by legislation to prepare financial reports in accordance with AAS or accounting standards are generally required to comply with AASB 101 Presentation of Financial Statements, AASB 107 Statement of Cash Flows, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, AASB 1048 Interpretation of Standards and AASB 1054, even in preparing SPFS.  For example, this is specified in paragraph 7 of AASB 1057 for entities within the scope of Part 2M.3 of the Corporations Act.  Entities registered with the ACNC are also specifically required to comply with those Standards by the Australian Charities and Not-for-profits Commission Act 2012.  However, such requirements do not apply to entities within the scope of this Standard, which simply have a reference to AAS in their constituting or other documents, rather than in legislation.

     BC20            In that regard, the Board considered proposing to expand the scope of AASB 101, AASB 107, AASB 108 and AASB 1048 consistent with the proposed expanded scope of AASB 1054, but decided not to do so.  This was because, while the Board saw merit in this approach, requiring all entities within the scope of the proposed amendments to AASB 1054 to comply with all the requirements contained in those Standards was considered too onerous.

     BC21            The Board also noted that if the approach considered in paragraph BC20 were to be adopted, as the Standards referred to in that paragraph contain certain R&M requirements (such as accrual accounting and applying the going concern basis of preparation), this would then impose a requirement on all entities within the scope of the proposed amendments to adopt minimum R&M requirements.  The Board concluded setting minimum R&M requirements in SPFS was beyond the objective of ED 302 (and beyond the objective of this Standard).

Disclosures regarding compliance with all