Document ID: chunk:federal_register_of_legislation:F2022C01110:reg:20:p5
Version: federal_register_of_legislation:F2022C01110
Segment Type: reg
Provision Reference: reg 20 (pt 5/40)
Character Range: 50922–53891

preparing special purpose financial statements are not disadvantaged by the proposals.  Consistent with this, the Board decided that, under the first stage of revisions to the differential reporting framework, concern (a) should be addressed.  The Board's approach to dealing with concern (a) leaves the current differential reporting framework based on the reporting entity concept and general purpose financial statements intact, including the requirement for entities required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act to apply AASB 101, AASB 107, AASB 108, AASB 1031 and AASB 1048, by virtue of the application paragraphs in those Standards.
BC17            The remainder of this Basis for Conclusions focuses on the basis for the Board's conclusions relating to concern (a).

Different Tiers of Requirements for General Purpose Financial Statements
BC18            The Board decided to retain full IFRSs as adopted in Australia as the first Tier (Tier 1) of reporting requirements, and make it mandatory for a relatively small number of entities in the private and public sectors in their preparation of general purpose financial statements.  These entities are limited to publicly accountable entities in the for-profit private sector and Governments in the public sector (see paragraphs BC25 and BC52).  Accordingly, AASB 1053 does not reduce the reporting burden of those entities.  Retention of full IFRSs as adopted in Australia requirements for these entities is consistent with the approach adopted by the IASB to require certain entities to continue to comply with full IFRSs in order to claim IFRS compliance.
BC19            The Board decided to introduce a second Tier (Tier 2) of requirements to substantially reduce the burden of financial reporting for other entities in both the private and public sectors in their preparation of general purpose financial statements.  Tier 2 retains the recognition, measurement and presentation requirements[12] of full IFRSs as adopted in Australia, but requires disclosures that are substantially reduced when compared with those required under full IFRSs as adopted in Australia.
BC20            The Board regards AASB 1053 as a pragmatic and substantive response to the need to reduce the burden of disclosure requirements on Australian reporting entities.  However, the Board does not regard it as a complete or final answer to that need.  In addition to the further research referred to in paragraph BC16 above, the Board intends continuing its deliberations on revising the differential reporting framework with a view to ongoing improvements (including having regard to decisions made by the IASB in relation to its IFRS for SMEs – see paragraph BC98).  The Board concluded that the reforms in AASB 1053 should not be delayed while consideration of other possible areas of reform continues.  The Board notes that important reforms are also being considered to reduce