Document ID: chunk:federal_register_of_legislation:F2022L01041:reg:4:p7
Version: federal_register_of_legislation:F2022L01041
Segment Type: reg
Provision Reference: reg 4 (pt 7/18)
Character Range: 64462–67278

adopting option (b), the Board did not expect the proposed disclosures in ED 302 to be onerous. However, it acknowledged that implementing option (b) in paragraph BC14 by making amendments to the application of AASB 1054 (via AASB 1057) would result in a number of entities becoming subject to AASB 1054 for the first time. Furthermore, the Board noted AASB 1054 specifies disclosures that are potentially beyond the scope of the project that gave rise to this Standard. For this reason, ED 302 proposed limiting the application of the existing disclosure requirements in AASB 1054 for those entities preparing SPFS. Consequently, ED 302 proposed that such entities should only be required to comply with proposed paragraph 9C (and paragraph 9D referring to implementation guidance is also relevant) in applying AASB 1054. That approach would leave it to the entities to decide with which other disclosure requirements in AAS to comply, based on their assessment of the needs of the users of their SPFS.
     BC16            ED 302 also proposed specific amendments to paragraph 2 of AASB 1057 to extend the set of entities to which AASB 1057 applies. This was necessary in order to extend the set of entities to which AASB 1054 applies and give effect to option (b) in paragraph BC14. The amendments to AASB 1057 proposed in ED 302 would not extend the application of any other AAS to the for-profit private sector entities covered by the proposals (see also paragraphs BC19-BC21).

Disclosure of the basis on which the decision to prepare SPFS was made
     BC17            ED 302 proposed that an entity be required to disclose an explanation for why SPFS had been prepared, for the same reasons articulated in paragraph BC24-BC26 of the Basis for Conclusions on AASB 2019-4 (which is published with AASB 1054) and consistent with the existing responsibilities of those charged with governance with respect to the selection and application of an entity's financial reporting framework. In drafting the proposed illustrative examples to accompany ED 302, the Board did not use the phrase 'not a reporting entity' to explain why the entity had prepared SPFS. Consistent with AASB 2020-2 limiting the application of the reporting entity concept by for-profit private sector entities, the Board considered entities need to more clearly articulate the reasons why they prepare SPFS.  Reasons why SPFS have been prepared may include users of the financial statements being in a position to command the information they require.

Disclosure of accounting policies
     BC18            The Board noted many entities within the scope of the proposed amendments in ED 302 were not required by AAS to disclose information about the accounting policies applied in their SPFS. Without this, information about the extent of the