Document ID: chunk:federal_register_of_legislation:F2022L01041:reg:4:p9
Version: federal_register_of_legislation:F2022L01041
Segment Type: reg
Provision Reference: reg 4 (pt 9/18)
Character Range: 69659–72866

requirements in AAS
     BC22            Both The AASB's For-Profit Entity Standard-Setting Framework (May 2018) and The AASB's Not-for-Profit Entity Standard-Setting Framework (May 2018) are predicated on transaction neutrality, that is, like transactions and events should be accounted for in a like manner by all types of entities, unless there is a justifiable reason not to do so.
     BC23            The Board considered whether it was appropriate to propose for-profit private sector entities within the scope of ED 302 should make the same disclosures regarding their material accounting policies as those required by not-for-profit private sector entities through AASB 2019‑4, or whether for-profit private sector entities should be required to make different disclosures. Most significantly, the Board noted AASB 2019-4 contains options for a not-for-profit private sector entity to disclose in its SPFS that it has not assessed certain aspects that would otherwise be required to be assessed and disclosed. Those aspects are:
          (a)                    whether or not the entity's interests in other entities give rise to interests in subsidiaries, associates or joint ventures for financial reporting purposes; and
          (b)                   whether or not the entity's material accounting policies comply with the R&M requirements in AAS.
     BC24            These options were included in AASB 2019-4 because:
          (a)                    for entities in the not-for-profit private sector, disclosure of compliance might be unduly burdensome, such as where entities are not required to determine whether they have subsidiaries in accordance with AASB 10 Consolidated Financial Statements to assess their financial reporting requirements (paragraph BC32 of the Basis for Conclusions on AASB 2019-4); and
          (b)                   allowing an entity to make a no-assessment disclosure would require minimal additional effort, but would highlight potential instances of non-compliance with the R&M requirements in AAS to users of the SPFS, as well as potential governance issues, and would also allow users of the SPFS to seek additional information if required (paragraph BC51 of the Basis for Conclusions on AASB 2019‑4).
     BC25            The Board acknowledged those for-profit private sector entities with a non-legislative requirement to prepare financial statements that comply with AAS might benefit from being able to disclose they have not assessed compliance with certain AAS requirements, for reasons consistent with those noted in paragraph BC24. However, the Board took the view for-profit private sector entities typically would be expected to have access to the resources necessary to make the required assessments and should therefore have an understanding of the R&M requirements in AAS under a good-governance approach to financial reporting. The Board also considered that while many of these entities might be small in size, they typically would not have overly complex accounting requirements or transactions in this case, and this assessment would therefore be relatively straightforward.
     BC26            The Board considered that the reasons