Document ID: chunk:federal_register_of_legislation:F2023C00381:reg:25:p20
Version: federal_register_of_legislation:F2023C00381
Segment Type: reg
Provision Reference: reg 25 (pt 20/47)
Character Range: 78172–81661

register or otherwise. The Board acknowledged that these changes could not be implemented in isolation, as merely removing the ability of certain for-profit private sector entities to prepare SPFS with no other mitigating action would result in increased reporting requirements for some entities if they were required to transition from SPFS to some form of Tier 2[7] GPFS framework. Therefore, this Standard is made in conjunction with AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (March 2020), which provides simplified Tier 2 GPFS reporting requirements for those for-profit entities that are prohibited from preparing SPFS as a result of this Standard.

     BC7               The Board also decided to provide transitional relief in addition to that which is currently available via AASB 1 First-time Adoption of Australian Accounting Standards and AASB 1053 (see paragraphs BC122-BC135), for entities that choose to early adopt the requirements in this Standard.

     BC8               The remainder of this Basis for Conclusions provides further background and explanation about the reasons for developing this Standard, including:

          (a)                    previous Board decisions in relation to earlier stages of the process (to provide a historical perspective, see for example paragraphs BC10-BC13);

          (b)                   the basis for the key decisions made, including:

               (i)                     the types of entities affected by the Standard and the technical requirements (including, for context, a summary of the basis for the revised Tier 2 GPFS framework (see paragraphs BC95-BC121), which is detailed in AASB 1060);

               (ii)                   transitional provisions (see paragraphs BC122-BC135); and

               (iii)                 the effective date (see paragraphs BC145-BC150);

          (c)                    how the Board applied The AASB's For-Profit Entity Standard-Setting Framework when developing this Standard (see paragraphs BC154-BC156); and

          (d)                   the amendments necessary to implement the requirements outlined in this Standard (see paragraphs BC157-BC162.

Reasons for developing this Standard

     BC9               This Standard includes:

          (a)                    amendments to AAS to remove the ability of certain for-profit private sector entities to prepare SPFS by removing the 'reporting entity' concept for those entities required by:

               (i)                     legislation to prepare financial statements that comply with either AAS or accounting standards; or

               (ii)                   their constituting document (or another document) to prepare financial statements that comply with AAS, provided the relevant document was created or amended on or after 1 July 2021; and

          (b)                   to provide relief from restating comparative information for entities transitioning to full R&M requirements, if the entity chooses to early adopt the requirements (see paragraphs BC122-BC135).

Board deliberations prior to the AASB's Invitation to Comment ITC 39 Consultation Paper – Applying the IASB's Revised Conceptual Framework and Solving the Reporting Entity and Special Purpose Financial Statement Problems

     BC10            As noted in paragraph BC2, the Board had been aware of the problems with the application of the reporting