Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p31
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 31/47)
Character Range: 109524–112610

unlisted public companies noted in paragraph BC40(a), the Board noted its expectation that users of those financial statements would also benefit from having access to GPFS rather than SPFS given that:

          (a)                    small foreign-controlled companies have been specifically required to lodge financial statements with ASIC[22], and are already provided with significant relief from financial reporting obligations if the company is included in the consolidated financial statements of a registered foreign company that is lodged with ASIC. Additionally, ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204 provides further relief to small foreign-controlled entities – even if they are not consolidated by a registered foreign company lodging financial statements with ASIC – by requiring them to lodge financial statements with ASIC only if directed to do so by shareholders or ASIC, or if they are part of a large group in Australia. The requirement for small foreign-controlled companies to lodge financial statements where they are part of a large group is designed to prevent foreign-controlled companies disaggregating their Australian activities into smaller companies to avoid financial reporting obligations.[23] In light of this Australian public interest context, demonstrated also through the requirements for SGEs to lodge GPFS with the ATO and the strong public interest in seeing no avoidance of tax, there appears to be no justification for small foreign-controlled companies to be relieved from the requirement to prepare GPFS; and

          (b)                   unlisted public companies by definition would have at least 50 non-employee shareholders (ie external users) and have the ability to offer shares to the public. As such, the Board noted it would be difficult to justify there being no external users of such entities' financial statements – and therefore GPFS are warranted. In addition, it is possible that some of the 3,102 unlisted public companies[24] currently lodging financial statements with ASIC may be not-for-profit entities, and as such would not be affected by this Standard.

The RCF

     BC42            The IASB issued the RCF in March 2018. The RCF describes the objective and concepts for general purpose financial reporting under IFRS Standards. Its purpose is to assist standard-setters to develop Standards that are based on consistent concepts, and to help preparers develop consistent accounting policies when no Standard applies to a particular transaction or event, or when a Standard allows a choice of accounting policy.[25] It also assists anyone looking to understand and interpret the Standards. However, the RCF's concept of 'reporting entity' is different from the reporting entity concept in SAC 1 and some AAS.[26]

     BC43            Making the IASB's RCF applicable in Australia, modified where necessary for public sector and  NFP specific issues, is consistent with the FRC's strategic direction to the Board and the Board's strategic objectives. In accordance with those