Document ID: chunk:federal_register_of_legislation:F2023C00394:body:0:p28
Version: federal_register_of_legislation:F2023C00394
Segment Type: other
Provision Reference: 
Character Range: 72958–76084

of companies and other for-profit entities.  The December 2005 and subsequent versions of AASB 124 specifically exempt not-for-profit public sector entities from applying AASB 124.  This exemption was provided on the grounds of practicability, including the number of intra-government transactions.
BC3 The Board received representations from constituents that the disclosure of relevant related party information is a critical element of accountability in the public sector.  A key example is information relating to key management personnel of public sector entities, the disclosure of which is not required under current Australian Accounting Standards.
BC4 Following requests from its constituents to review IAS 24 Related Party Disclosures, the International Accounting Standards Board (IASB) made amendments to simplify the definition of 'related party' and, to ease concerns about practicability, provide a partial exemption from the disclosure requirements for entities that are related by virtue of being controlled, jointly controlled or significantly influenced by the same government.  The Board incorporated the revised IAS 24 into AASB 124 (December 2009).  The Board noted that this version of AASB 124 provides a more appropriate basis for application by not for profit public sector entities than the previous versions, as transactions between government-related entities of the same jurisdiction are exempted partially from disclosure.
BC5 Therefore, in furtherance of its policy of promulgating transaction-neutral Standards to the extent feasible, the Board initiated a project to consider issues relating to extending the scope of AASB 124 (December 2009) to not-for-profit public sector entities.  The Board issued Exposure Draft ED 214 Extending Related Party Disclosures to the Not-for-Profit Public Sector in July 2011.  ED 214 exposed for public comment the Board's proposal to extend the scope of AASB 124 to include not-for-profit public sector entities.  The ED explained the Board's reasons for its proposals, including its considerations as to the applicability of AASB 124 to a not-for-profit public sector context.  In addition, public roundtables were conducted with public sector constituents to identify concerns and implementation issues arising from the Board's proposals.
BC6 In finalising its proposals that not-for-profit public sector entities be required to apply AASB 124 unamended, the Board addressed a range of issues, including consideration of:
(a) amending the definition of 'key management personnel' for such entities;
(b) amending the requirements to provide such entities with some relief from disclosure of ministerial compensation;
(c) exempting such entities from disclosing certain related party transactions with Ministers;
(d) not requiring general government sector (GGS) financial statements to comply with AASB 124;
(e) adding a public sector perspective to AASB 124, for example by inserting an alternative definition for the term 'business' in paragraph 5 of AASB 124; and
(f) extending the disclosure requirements in AASB 124 for key management personnel.
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