Document ID: chunk:federal_register_of_legislation:F2022L00704:body:0:p10
Version: federal_register_of_legislation:F2022L00704
Segment Type: other
Provision Reference: 
Character Range: 26401–29574

Board acknowledged that compliance with IFRSs might not result in compliance with Australian Accounting Standards as they apply to NFP entities, where NFP-specific recognition and measurement requirements in Australian Accounting Standards are relevant to an entity. The Board noted that a NFP entity would be unable to apply the optional exemption when transitioning to Australian Accounting Standards in relation to amounts included in a parent's IFRS-compliant consolidated financial statements that do not comply with Australian Accounting Standards as they apply to NFP entities. NFP entities are required to comply with the applicable NFP requirements in Australian Accounting Standards when transitioning to those Standards, subject to any specific exceptions and exemptions in AASB 1.
     BC31            The Board noted that this outcome is consistent with how the optional exemption is currently being applied in some circumstances. For example, a NFP entity is unable to apply the optional exemption to assets and liabilities where the amounts included in the parent's consolidated financial statements do not comply with Australian Accounting Standards as they apply to NFP entities. This could occur where a NFP entity has a for-profit parent that prepares consolidated financial statements for the mixed group (ie a group that includes both for-profit and NFP entities) using accounting policies appropriate to for-profit entities.

Compliance with IFRSs
     BC32            One stakeholder provided feedback that, in their view, the proposed amendment to AASB 1 paragraph D16(a) was too narrow because the optional exemption could only be applied where a parent entity prepares financial statements that comply with IFRSs, and not where a parent entity prepares financial statements that comply with IFRS-equivalent Standards but do not include a statement of compliance with IFRSs.
     BC33            Although the Board considered there could be merit in permitting the proposed amendment to be applied in circumstances where a parent's financial statements comply with IFRS-equivalent Standards rather than IFRSs, the Board decided not to make such a change. The Board noted that referring only to IFRSs as proposed in ED 315 is consistent with the approach to first-time adoption in AASB 1. The Board was also concerned about potential unintended consequences if the proposed amendment could be applied where a parent entity prepared financial statements that complied with IFRS-equivalent Standards, including possible difficulties in determining which standards are considered IFRS-equivalent Standards.

Other amendments
     BC34            Following feedback from stakeholders, the Board also decided to amend:
          (a)                    AASB 1 paragraph D13A, for consistency with the amended paragraph D16(a); and
          (b)                   AASB 1 paragraph D17, to allow an entity that becomes a first-time adopter of Australian Accounting Standards in its consolidated financial statements later than its subsidiary (or associate or joint venture) to use the amounts included in the subsidiary's (or associate's or joint venture's)