Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p25
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 25/47)
Character Range: 92610–95559

BC23            In response, in July 2019, the Board issued ED 293 Amendments to Australian Accounting Standards – Disclosure in Special Purpose Financial Statements of Compliance with Recognition and Measurement Requirements which proposed, as an interim measure, amendments to AAS to require entities preparing SPFS to make an explicit statement as to whether or not the accounting policies applied in the SPFS comply with all the R&M requirements in AAS. The Board acknowledged that disclosure of this information was not sufficient to address the problems with publicly lodged SPFS, however the interim measure was aimed at providing some measure of transparency to users until the resolution of the SPFS problem, in the short to medium term for for-profit private sector entities and in the longer term for not-for-profit entities. After considering feedback from respondents on ED 293, the Board decided to limit the scope of the proposals to only not-for-profit (NFP) entities as respondents "were particularly concerned about the costs of the ED 293 proposals exceeding any benefits for for-profit private sector entities given the ED 293 proposals were intended to be only a short-term measure for these entities. This is because the broader project proposing to remove the ability for certain for-profit private sector entities to prepare special purpose financial statements when they are required to comply with Australian Accounting Standards is expected to be completed by 30 June 2020."[12]

     BC24            In light of the effective date of this Standard being one year later than that proposed in ED 297, and also noting that there is likely to be a number of entities that will continue to be able to prepare SPFS (e.g. due to the exemption provided to entities with a non-legislative requirement to prepare financial statements that comply with AAS (refer paragraphs BC90-BC92)), the Board reconsidered this decision. The Board was concerned about the lack of transparency in the SPFS that continues to refer to AAS and therefore decided that these entities should also be required to disclose a statement of the entity's compliance, or otherwise, with the R&M requirements in AAS (including requirements set out in AASB 10 Consolidated Financial Statements or AASB 128 Investments in Associates and Joint Ventures). The Board thought this was particularly important for securitisation trusts given they are listed on the ASX and other securities exchanges.  The Board intends to communicate with the ASX and industry bodies to ensure they understand the implications of having SPFS on their public registers.

     BC25            In addition to the research described above, the Board also conducted significant targeted outreach prior  to issuing the standard, where over 250 formal meetings were held with key stakeholders, including State, Territory and Commonwealth regulators, audit offices, large and small accounting