Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p53
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 53/73)
Character Range: 308625–311694

reaffirmed the considerations set out in the Basis for Conclusions on this matter and decided to finalise and approve the amendments as proposed.

Basis for Conclusions on AASB 2021-1

This Basis for Conclusions accompanies, but is not part of, AASB 1060.  The Basis for Conclusions was originally published with AASB 2021-1 Amendments to Australian Accounting Standards – Transition to Tier 2: Simplified Disclosures for Not-for-Profit Entities.

Introduction

 1.                This Basis for Conclusions summarises the Australian Accounting Standards Board's considerations in reaching the conclusions in this Standard. It sets out the reasons why the Board developed the Standard, the approach taken to developing the Standard and the bases for key decisions made. In making decisions, individual Board members gave greater weight to some factors than to others.

Reasons for issuing this Standard

 1.                The Board noted that not-for-profit (NFP) entities transitioning from either Tier 1: Australian Accounting Standards or Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements (RDR) and adopting Tier 2: Australian Accounting Standards – Simplified Disclosures (SD) early (ie for reporting periods beginning before 1 July 2021) would not be able to access the transitional relief that is available to for-profit private sector entities. For-profit private sector entities that transition between the Tier 2 frameworks by adopting Tier 2 SD early are provided optional relief from presenting comparative information in the notes to the financial statements if the entity did not previously disclose the comparable information in its most recent previous financial statements. This relief is set out in paragraph E4 of AASB 1053 Application of Tiers of Australian Accounting Standards. For-profit private sector entities that transition from Tier 1 to Tier 2 SD early are also provided with this same optional disclosure relief.

 2.                To address this difference, the Board decided to make a narrow-scope amendment to AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities to provide NFP entities with the same optional transition relief as for-profit entities when transitioning early from Tier 1 or Tier 2 RDR to Tier 2 SD.

Issue of Exposure Draft ED 306

 1.                The Board's proposals with respect to the transition relief finalised in this Standard were exposed for public comment in December 2020 as part of Exposure Draft ED 306 Transition Between Tier 2 Frameworks for Not-for-Profit Entities.

 2.                The significant issues considered by the Board in developing ED 306 are addressed in the following sections.

Scope

 1.                ED 306 proposed amendments to AASB 1060 to provide optional relief for NFP entities adopting AASB 1060 early from having to present comparative information in the notes to the financial statements where the entity did not previously disclose the comparable information in its most