Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p68
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 68/76)
Character Range: 226166–229249

superannuation entities because they can affect those entities' financing and operating policies.  ED 179 proposed disclosure about the entity's relationships with its trustee(s) and employer-sponsor(s), any transactions with trustees or employer-sponsors during the reporting period, and any outstanding balances with trustees and employer-sponsors at the end of the reporting period, if the nature of these relationships, transactions or balances were not considered 'normal' in a superannuation context.
BC228        Some ED 179 respondents expressed concerns with the proposed manner in which related party disclosures would be dealt with and suggested that:
(a)                   the proposals do not appear to include the materiality threshold that applies in relation to AASB 124; and
(b)                   the term 'normal' may be difficult to apply in some circumstances to determine whether a transaction and/or balance between a plan, its trustee or an employer-sponsor should be disclosed.
BC229        AASB 124 was reissued in 2009 and related parties of post-employment benefit plans now explicitly include their sponsoring employer(s).
BC230        The AASB decided ED 223 should propose that a superannuation entity apply, when appropriate, the principles and requirements in AASB 124.  The AASB also decided it should propose that a trustee be specifically identified as a related party of its superannuation entity, primarily because trustees have the ability to affect the financing and operating policies.  Based on the responses received on ED 223, the AASB concluded that a trustee of a superannuation entity is a related party of the entity for the purpose of applying AASB 124.
BC231        The AASB also noted that an employer of members of a superannuation entity (that the employer does not sponsor) may, in some cases, be a related party of the entity.  However, the AASB concluded that this would need to be decided on the basis of the facts in each case and that there is no need to specifically identify employers as related parties.

Insurance contracts
BC232        The AASB included proposed disclosure requirements in ED 179 and ED 223 to complement the proposed recognition and measurement requirements relating to insurance arrangements a superannuation entity provides to its members.  Constituents' comments on the ED 179 and ED 223 proposals tended to focus on the recognition and measurement issues, however, the constituents comment on the Draft AASB 1056 for fatal flaw review included feedback on the disclosure issues.
BC233        Based on the feedback received, the AASB concluded that a superannuation entity taking on the role of an insurer in relation to its defined contribution members should separately disclose in their financial statements items such as:
(a)                   insurance contract revenue, incurred claims expense, reinsurance expense and reinsurance recoveries recognised in the income statement;
(b)                   insurance contract liabilities and reinsurance contract assets recognised in the statement of