Document ID: chunk:federal_register_of_legislation:F2023L00951:body:0:p5
Version: federal_register_of_legislation:F2023L00951
Segment Type: other
Provision Reference: 
Character Range: 11872–14888

by AASB 2020-1 and AASB 2022-6 to AASB 101:
          (a)                    where AASB 1060 contains a corresponding paragraph, AASB 1060 should be updated in a similar manner. If the corresponding paragraph in AASB 1060 (paragraph 40) is not updated, entities may interpret and apply the requirements of AASB 1060 differently from the corresponding requirements in AASB 101;
          (b)                   AASB 1060 should be updated in relation to the new disclosure requirements added to AASB 101 if the disclosure is of particular relevance in the Australian environment or addresses a matter of public policy since the amendments to AASB 101 do not introduce significant recognition and measurement differences. The rationale for proposing to add paragraph 47A to AASB 1060 is further detailed in paragraph BC8; and
          (c)                    where guidance paragraphs were added to AASB 101, these paragraphs should not be added to AASB 1060. When developing AASB 1060, the Board was aware that replacing certain Standards with sections in AASB 1060 also removed some of the guidance included in those Standards, where such guidance was also not included in the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs Standard). However, to maintain the simplicity of the disclosure requirements in AASB 1060, the Board considered this preferable to considering on a case-by-case basis which guidance should be included and which could be omitted.[2] Although the Board was unable to follow that approach in this case as the IFRS for SMEs Standard was last updated by the IASB in 2015, prior to the 2020 and 2022 amendments, on balance the Board considered that including the additional guidance paragraphs in AASB 1060 was not necessary. The Board noted that AASB 1060 paragraph 2 permits an entity applying AASB 1060 to refer to the guidance in other Australian Accounting Standards (including AASB 101) when helpful.
     BC8               When applying the approach outlined in paragraph BC7(b) to proposed paragraph 47A (corresponding to AASB 101 paragraph 76ZA(a)), the Board considered that the disclosures would provide useful information to the users of Tier 2 financial statements because it would allow them to understand the nature of the entity's covenants and the risk that a liability classified as non-current could nonetheless be repayable within twelve months. The Board considers that users of the financial statements of Tier 2 entities are particularly interested in information about an entity's short-term cash flows and obligations, commitments, or contingencies, whether or not recognised as liabilities, and liquidity and solvency.[3]
     BC9               No changes to AASB 1060 were proposed in relation to the amendments made to AASB Practice Statement 2. This is because AASB Practice Statement 2 provides non-mandatory guidance to all entities on making materiality judgements when preparing general purpose financial statements in