Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p28
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 28/40)
Character Range: 114446–117344

with AASB 108.  Such an entity would apply AASB 1, without recourse to the AASB 108 option in AASB 1, on resuming Tier 1 reporting requirements.
BC13            The Board observed that the effect of the AASB 2012-5 amendments might be regarded as not having been fully reflected in AASB 1053 at the time of making AASB 2012-5.  In particular, some considered that AASB 1053 needed to be amended to make it clear that entities could apply Australian Accounting Standards retrospectively in accordance with AASB 108 in the circumstances described in paragraphs BC11-BC12 above.  Accordingly, the Board concluded it should make the clarification by replacing paragraph 19 of AASB 1053 (June 2010) with paragraphs 19 and 19A.

Reapplication of Tier 2 Reporting Requirements that does not entail Transition from Tier 1
BC14            The Board noted the previous prohibition in paragraph 19(a) of AASB 1053 for entities that had previously applied all applicable recognition and measurement requirements of Australian Accounting Standards from applying AASB 1 on first transition to Tier 2 reporting requirements.  Consistent with this prohibition, the Board decided to clarify in paragraphs 19B and 20[15] of AASB 1053 that an entity that has applied Tier 2 reporting requirements in a previous reporting period, but whose most recent previous annual financial statements did not contain an explicit and unreserved statement of compliance with those requirements, and the entity continued to apply all applicable recognition and measurement requirements, should also be prohibited from applying AASB 1 (and the AASB 108 option in AASB 1), on resuming Tier 2 reporting requirements.  This is consistent with the view that it would not be appropriate to imply, through application of AASB 1, that the basis of accounting has changed.
BC15            The Board also decided to require entities returning to Tier 2 reporting requirements meet the disclosure requirements equivalent to those in paragraph 23A (and, where relevant, paragraph 23B) of AASB 1, which would require an entity to disclose the reason it stopped applying Tier 2 requirements and the reason it is resuming reporting in accordance with those requirements (and the reasons it elected to use the AASB 108 option in AASB 1, where that election is available and adopted).[16]  The Board is of the view that these disclosure requirements provide users with useful information and the disclosures in paragraph 23A would discourage the intentional omission of the statement of compliance with Tier 2 reporting requirements solely to allow an entity to take advantage of the exemptions in AASB 1.
BC16            The Board noted, however, that entities returning to Tier 2 reporting requirements in circumstances noted in paragraph BC14 above are prohibited from applying AASB 1 and, by extension, they would be exempted from the disclosures