Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p8
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 8/47)
Character Range: 40120–43164

IASB's amendments to the definition of public accountability should be reflected in the definition included in AASB 1053 Application of Tiers of Australian Accounting Standards.

Stakeholder engagement

     BC15            After issuing ITC 39, the Board held targeted outreach with key stakeholders, including State, Territory and national regulators, audit offices, accounting firms, the Australian Securities Exchange (ASX), the Australian Securities and Investments Commission (ASIC), credit rating agencies and professional bodies.  The ITC 39 proposals were also presented at various forums, workshops and discussion groups.

     BC16            The Board received feedback on its proposals through 24 formal comment letters on ITC 39.  The Board also obtained feedback via means such as emails, meetings with constituents and feedback from external presentations.  The responses to ITC 39 indicated that:
(a) on balance, the majority of the respondents were supportive of the proposals in Phase 1 and the need to issue the revised Conceptual Framework in Australia prior to 1 January 2020 so that entities with public accountability could continue to maintain compliance with IFRS Standards;
(b) there are a number of entities that may be affected by Phase 1 and the reporting entity clash of which the Board was unaware when developing ITC 39;
(c) maintaining two conceptual frameworks was not without its complexities; and
(d) mandatory application of the revised Conceptual Framework in Phase 1 should be limited to for-profit private sector entities with public accountability that are required by legislation to prepare financial statements that comply with Australian Accounting Standards.

     BC17            The Board considered these issues as well as a range of other issues identified by constituents in developing this Standard following the ITC 39 exposure process.  The significant issues are addressed in the following section.

Public accountability

     BC18            Respondents to ITC 39 identified a number of types of entities that may be affected by Phase 1 as they may have public accountability but currently are preparing special purpose financial statements.  Respondents also indicated that additional guidance would be useful to assist them in determining whether an entity meets the definition of 'public accountability'.

     BC19            Due to the importance of the definition of publicly accountability in Australia, the Board decided to amend the definition in AASB 1053 to align with the revised definition per the IFRS for SMEs when the revised Conceptual Framework is issued.  The revised definition confirms that an entity has publicly accountability if it has debt or equity instruments that are traded in a public market or it is in the process of issuing such instruments for trading in a public market.  An entity also has public accountability if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses.

     BC20            The Board