Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p2
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 2/40)
Character Range: 42046–45323

Act and that is a reporting entity;
               (b)                   general purpose financial statements of each other reporting entity; and
               (c)                    financial statements that are, or are held out to be, general purpose financial statements.
Prior to AASB 1053, for-profit and not-for-profit (NFP) entities falling within the scope of this application paragraph were subject to all the recognition, measurement, presentation and disclosure requirements of those Standards.  These entities included entities incorporated under the Corporations Act 2001 that are reporting entities.
BC4               Under the Corporations Act, disclosing entities, public companies (including companies limited by guarantee), large proprietary companies and registered schemes must prepare and lodge financial statements that comply with accounting standards.  Large proprietary companies are those companies that meet at least two of the three size thresholds set out in the Corporations Act relating to:
(a)                    the consolidated revenue for the financial year of the company and the entities it controls (if any);
(b)                   the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any); and
(c)                    the number of employees of the company and the entities it controls (if any) at the end of the financial year.
These Corporations Act size thresholds effectively remove the external reporting obligations for small proprietary companies.[10]
BC5               Accordingly, prior to AASB 1053, a reporting burden that is less than compliance with full Australian Accounting Standards was only available to non-reporting entities in the preparation of financial statements that are not general purpose financial statements.  The financial statements of non-reporting entities are classified as special purpose financial statements and, like general purpose financial statements, are subject to true and fair view requirements of the Corporations Act where they fall within the scope of that Act.
BC6               Entities eligible for this reduced reporting burden included those incorporated under the Corporations Act that are not reporting entities but are required to prepare financial statements.  Only AASB 101 Presentation of Financial Statements, AASB 107 Statement of Cash Flows, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, AASB 1031 Materiality and AASB 1048 Interpretation of Standards apply to such entities, by virtue of the application paragraphs in those Standards.
BC7               The Australian Securities and Investment Commission (ASIC) has expressed the view[11] that non-reporting entities required to prepare financial statements in accordance with Chapter 2M of the Corporations Act should comply with the recognition and measurement requirements of all accounting standards.  Under ASIC's view, the only 'relief' for these entities is not having to apply the disclosure requirements contained in Standards other than AASB 101, AASB 107 and AASB 108.
BC8               In addition to AASB pronouncements that incorporate IFRSs, there are Australian Accounting Standards (including Interpretations)