Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p24
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 24/76)
Character Range: 99478–102548

the AASB promulgated AASB 1053 Application of Tiers of Australian Accounting Standards, which establishes a differential reporting framework consisting of two tiers of reporting requirements for preparing GPFSs:
(a)                   Tier 1: Australian Accounting Standards; and
(b)                   Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements (RDR).
BC31            In the process of developing AASB 1053, the AASB issued ED 192 Differential Reporting Framework (February 2010), which noted that:
"AAS 25 Financial Reporting by Superannuation Plans has been excluded from the RDR on the grounds that entities applying AAS 25 would be superannuation plans registered with the Australian Prudential Regulation Authority, which are regarded as publicly accountable in this Exposure Draft.  Superannuation entities that apply AAS 25 and prepare general purpose financial statements are required, under the Superannuation Industry (Supervision) Act 1993, to hold assets in a fiduciary capacity for their members.  In addition, most superannuation entities, particularly public offer superannuation plans and approved deposit funds, have a broad range of members who have no involvement in the day-to-day operations of the entity."
BC32            Some respondents to ED 192 questioned whether all APRA-regulated entities, particularly SAFs, should be considered to have 'public accountability'.  They noted that, while SAFs lodge financial statements with APRA, they are not made publicly available, APRA does not mandate that SAFs prepare GPFSs and most, if not all, SAFs are similar in nature and size to SMSFs.
BC33            During its redeliberations on ED 179, the AASB noted SAFs are defined by APRA as superannuation plans with less than five members and have an Extended Public Offer Entity licence.  As such, members of a SAF appoint a trustee with a Public Offer Entity licence to manage the plan on their behalf.  While SAFs must lodge APRA returns that include information reported in their financial statements, this information is not publicly available for individual SAFs.  In addition, the AASB noted SAFs would not be considered publicly accountable or reporting entities because they are small, have few members who have a close relationship with the trustee and SAFs normally prepare special purpose financial statements.
BC34            ED 223 included a question asking constituents whether there are any superannuation entities that would meet the criteria in AASB 1053 for applying Tier 2 disclosure requirements and the AASB also conducted targeted outreach on the issue, including in respect of so-called 'paragraph 66 plans'.  Paragraph 66 of AAS 25 permits superannuation plans whose only assets (other than temporary deposits at call with a bank) are endowment, whole of life or other long-term insurance policies which match and fully guarantee the benefits to be paid to individual members to apply only a sub-set of its recognition, measurement and disclosure requirements, provided they report items such as: