Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p20
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 20/40)
Character Range: 92049–95246

requirements under the RDR, the Board decided to adopt an approach that:
(a)                    draws on the IFRS for SMEs to identify disclosures in cases where the recognition and measurement accounting policy options available or requirements under the RDR align with those under the IFRS for SMEs; and
(b)                   applies 'user need' and 'cost-benefit' principles (that is, the same basic principles used by the IASB in determining disclosures under the IFRS for SMEs) to arrive at reduced disclosure requirements in cases where the recognition and measurement accounting policy options or requirements under the RDR differ from those under the IFRS for SMEs.
In applying this approach, the Board concluded that satisfying the objective of general purpose financial statements should be the overriding basis for determining the disclosures under the RDR whether or not the recognition and measurement accounting policy options available or required under that regime align with those provided under the IFRS for SMEs.  The Board applied this approach to each disclosure requirement in each Australian Accounting Standard.  The results are reflected in AASB 2010-2.
BC77            The Board noted that its approach would help minimise the cost of determining and maintaining disclosures under the RDR.
BC78            Consistent with the IASB's approach in the IFRS for SMEs, the AASB concluded that users of general purpose financial statements of non-publicly accountable for-profit entities are particularly interested in information about:
(a)                    short-term cash flows and about obligations, commitments or contingencies, whether or not recognised as liabilities;
(b)                   liquidity and solvency;
(c)                    measurement uncertainties;
(d)                   the entity's accounting policy choices;
(e)                    disaggregations of amounts presented in the financial statements; and
(f)                    transactions and other events and conditions encountered by such entities.
BC79            The Board also concluded that, in addition to the particular information needs of users of non-publicly accountable for-profit entities noted in paragraph BC78, the information needs of the users of general purpose financial statements of NFP entities in both the private and public sectors would be satisfied by adopting a similar approach, having regard to the specific needs of users of NFP, including public sector, entity financial statements.  The AASB uses its Process for Modifying IFRSs for PBE/NFP in assessing the need for specific requirements relating to NFP entities.
BC80            The Board noted that, although the IFRS for SMEs has been developed to apply to for-profit private sector entities, broadly it is considered reasonable to rely on the judgements made in developing the IFRS for SMEs in respect of both for-profit and NFP (including public sector) entities in Australia given that IFRSs are generally applied to all types of Australian entities.

Application of Standards
BC81            AASB 2010-2 specifies the disclosures in each Australian Accounting Standard from which Tier 2 entities are exempted.