Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p65
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 65/73)
Character Range: 342957–346149

taxes arising from the implementation of the Pillar Two model rules;

          2.                    introduce targeted disclosure requirements in periods when Pillar Two legislation is in effect; and

          3.                     clarify that 'other events' in the disclosure objective for income tax include enacted or substantively enacted Pillar Two legislation.

 6.             Therefore, the Board decided to propose amendments to AASB 1060 to require Tier 2 entities applying the temporary exception to include targeted disclosures in their financial statements.

Disclosures

 1.             As noted in paragraph BC6, a Tier 2 entity is required to apply the mandatory temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules in AASB 112.  To make the application of the exception transparent, the Board proposed requiring Tier 2 entities applying the temporary exception to disclose that fact.

 2.             In addition, consistent with the IASB's proposed approach to amending the IFRS for SMEs Standard, the Board decided:

          1.                     in relation to periods before relevant Pillar Two legislation is in effect, not to propose specific disclosure requirements; and

          2.                    in relation to periods when relevant legislation is in effect, to propose requiring an entity to disclose its current tax expense (income) related to Pillar Two income taxes.

 3.             In making these decisions, the Board considered that:

          1.                     it was not necessary to add a new disclosure requirement for periods before relevant Pillar Two legislation is in effect because the existing disclosure requirement in paragraph 176 would be expected to result in Tier 2 entities affected by Pillar Two legislation providing some information about the nature and financial effect of enacted or substantively enacted Pillar Two legislation before it applies.  However, the Board decided to propose clarifying that the reference in paragraph 176 to 'other events' includes enacted or substantively enacted Pillar Two legislation; and

          2.                    requiring a Tier 2 entity to disclose its current tax expense (income) related to Pillar Two income taxes when relevant legislation is in effect would help users of the financial statements understand the magnitude of Pillar Two income taxes relative to the entity's overall tax expense (income).  The Board considered this disclosure would not be costly to prepare because a Tier 2 entity would already be required in these circumstances to recognise current tax related to Pillar Two income taxes.

Finalisation of ED 325 proposals

 1.             Following the consultation period, and after considering the comments received, the Board decided to proceed with issuing this Standard, with minimal changes from the proposals in ED 325.

Feedback from respondents on ED 325

 1.             The Board received two formal comment letters on ED 325.  The feedback received indicated that, in general, both stakeholders were supportive of the proposals.  However, one stakeholder provided additional