Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p35
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 35/47)
Character Range: 120831–124090

do so;

          (b)                   allowed all other entities to continue preparing SPFS in the short term while the Board undertook consultation and outreach activities and determined the appropriate Tier 2 GPFS framework to replace SPFS;

          (c)                    maintained IFRS Standards as a base for all entities in the medium term;

          (d)                   solved the reporting entity problem in the medium term;

          (e)                    solved the SPFS problem in the medium term;

          (f)                    allowed time for the Board to consult and determine any NFP modifications that may be necessary to the RCF in accordance with The AASB's Not-for-Profit Entity Standard-Setting Framework; and

          (g)                   facilitated comparability and ensured there were appropriate accounting standards for each type of entity required to prepare financial statements that comply with AAS.

     BC54            Phase 1 implemented the RCF for publicly accountable for-profit private sector entities and other entities voluntarily reporting compliance with IFRS Standards so that they continue to maintain IFRS compliance when the RCF took effect internationally on 1 January 2020. Entities in Australia with public accountability must apply the full IFRS Standards as AAS incorporate IFRS Standards and therefore, the Board reconfirmed its view that for-profit private sector entities in Australia with public accountability should be required to prepare Tier 1 GPFS. The Board completed Phase 1 in May 2019 (see AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework).

     BC55            ITC 39 proposed that Phase 2 would then implement the RCF for all other entities. However after considering initial feedback on ITC 39, the results of discussions with ACNC and other State and Territory regulators regarding the recommendations in the ACNC's Legislative Review 2018: Strengthening for Purpose: Australian Charities And Not-for-profits Commission (ACNC legislative review), research initiated by the Board and The AASB's Not-for-Profit Entity Standard-Setting Framework, the Board decided that the proposals in ITC 39 should only apply to for-profit private sector entities, and that it would be more appropriate to progress reform of the NFP public and private sector financial reporting framework via separate targeted consultations undertaken as part of the broader financial reporting framework project (refer to paragraphs BC73-BC75 for further discussion). The Board also decided to consider the public sector financial reporting framework separately (refer to paragraph BC80).

     BC56            Option 1 in ITC 39 contemplated that during Phase 2, the Tier 2 GPFS framework in AASB 1053 would be revised to be one of the following alternatives:

          (a)                    RDR – The existing Tier 2 GPFS framework as currently exists in AASB 1053, consisting of full R&M, including consolidation and equity accounting (where applicable) with reduced disclosures from each applicable AAS; or

          (b)                   Specified Disclosure Requirements (SDR) – A new Tier 2 GPFS framework that would consist of full R&M including