Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:21:p72
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 21 (pt 72/101)
Character Range: 229952–232916

in applying AASB 17/PBE IFRS 17 (that is, their presence means AASB 17/PBE IFRS 17 would apply); or

          (b) otherwise ranked in some manner based on their significance in determining arrangements that should be accounted for by applying AASB 17/PBE IFRS 17.

     BC235        The field testing conducted in 2021-22 on the proposed indicators revealed a range of views. Some stakeholders noted a preference for ranking the indicators in some manner, although there was no consensus among those stakeholders for a particular ranking of the indicators. However, many of those seeking some form of ranking typically identified the most significant indicators as being:

          (a) an identifiable coverage period – on the basis that it contrasts with an open-ended compensation scheme that provides benefits based on meeting eligibility criteria; and

          (b) the enforceable nature of the arrangement – on the basis that it means there is a binding arrangement between the public sector entity and a participant similar to that found in an insurance contract issued by a private sector insurer.

     BC236        In contrast, the field testing also revealed that many of those seeking some form of ranking typically identified the least significant indicators as being:

          (a) management practices and assessing financial performance – on the basis that there are many sound management and reporting practices that are routinely practiced both by insurers and by those responsible for compensation schemes; and

          (b) the existence of a separate fund or earmarked assets held to meet benefits – on the basis that funds are often set aside within compensation schemes.

Boards' proposal on not assigning a relative significance to the indicators in AASB ED 319/NZASB ED 2022-3

     BC237        The Boards decided that they would not propose assigning a relative significance to each of the indicators on the basis that this is generally inconsistent with principle-based standard setting and with the notion of making a collective assessment and applying judgement based on the relevant circumstances. Instead, the Boards responded to the field test feedback by trying to better explain the relevant aspects of the indicators considered by some to be the least significant.

     BC238        The Boards also decided to include a specific question in AASB ED 319/NZASB ED 2022-3 on whether the indicators should be ranked in some manner and, if so, how they should be ranked and the reasons for that ranking.

Identifying public sector arrangements scoped into AASB 17/PBE IFRS 17 – AASB ED 319/NZASB ED 2022-3 feedback

     BC239        Most respondents to AASB ED 319/NZASB ED 2022-3 supported using indicators to determine whether public sector arrangements fall within the scope of AASB 17/PBE IFRS 17.

     BC240        While many respondents considered some indicators to be more relevant than others, most were in favour of