Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p14
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 14/40)
Character Range: 75930–78929

those jurisdictions to apply criteria that they regard as appropriate in their circumstances, if the Board were to make a universal decision on the reporting Tier under which they fall.  Accordingly the Board decided that universities should be allowed to apply Tier 2 requirements in preparing their general purpose financial statements unless a relevant public sector regulator requires the application of Tier 1 requirements.

Private Sector NFP Entities
BC55            The Board considered the issue of possible subclassifications of different types of NFP entities within the NFP sector for differential reporting purposes.  The Board noted commentators' views on ITC 14 Proposed Definition and Guidance for Not-for-Profit Entities that NFP entities can generally be identified as being in one of three categories based on the nature of their operations and sources of funding:
(a)                    charities;
(b)                   member-based entities; and
(c)                    public sector entities;
and that there may be a need for a fourth 'other' category to cater for entities such as schools and religious organisations.  The Board noted the significant disparities in the size of entities within each of the above categories.
BC56            Some constituents argued that the disclosures required by full IFRSs (or the IFRS for SMEs) would not satisfy the information needs of users of financial statements of, for example, charities.  These Standards, it was noted, have a for-profit focus while the nature of charities' activities is such that not all disclosures in these Standards are pertinent to the needs of users of the financial statements of charities.  Moreover, there are disclosures that relate to the nature of operations of charities and specific issues of public interest that are not required by these Standards and that may be within the scope of financial reporting.  It was argued that the stakeholders of a charity are interested in the accountability of the entity in achieving objectives stated in the entity's mission statement using funds provided by those stakeholders.  They noted that donors, grantors and other contributors who provide resources in the form of money or voluntary services and the public at large (which includes the beneficiaries of charitable activity) are all interested in the accountability of charities.
BC57            The Board noted that a similar view exists in regard to all NFP entities.  This view links accountability to the objective of each NFP entity and advocates disclosure of particular performance-related information to help inform a wide range of stakeholders about the way a NFP entity is utilising its resources in achieving its purpose.
BC58            The Board decided that there should not be subclassifications of different types of entities in the NFP sector other than between private and public sector entities, for differential reporting purposes.  In arriving at this decision, the Board noted that: