Document ID: chunk:federal_register_of_legislation:F2025C00209:reg:221:p19
Version: federal_register_of_legislation:F2025C00209
Segment Type: reg
Provision Reference: reg 221 (pt 19/73)
Character Range: 215271–218137

needs' and 'cost-benefit' principles applied by the IASB in developing its IFRS for SMEs Standard when full R&M requirements are not the same as those available under the IFRS for SMEs Standard. A top-down approach is used which starts with the full IFRS disclosures and then identifies those that can be removed. The Board noted that there could be a tendency to retain disclosures in circumstances where a direct comparison is not possible.

      2.             A post implementation review of the RDR framework was carried out by the Board which identified that the RDR disclosure requirements had not delivered the expected outcome and that take up of the RDR framework by entities was consequently low[49]. In response to the findings of the post implementation review, the Board issued ED 277 in January 2017 as a joint project with the New Zealand Accounting Standards Board (NZASB).

      3.             ED 277 proposed adopting an RDR decision-making framework, together with accompanying operational guidance. The framework was based on Key Disclosure Areas (KDAs) which were meant to result in information that meets user needs. Judgement was required when applying this framework, and the overarching principles of user needs and cost-benefit were considered when determining the disclosures that Tier 2 entities should make.

      4.             The approach taken in the proposed Tier 2 framework in ED 277 was to include an Australian Appendix in each AAS that identifies the disclosures that Tier 2 entities are required to provide, thereby addressing concerns by those that find the shading used to identify disclosures that can be omitted confusing. However, while ED 277 was based on clear disclosure principles, the cost-benefit analysis was difficult to apply in the context of disclosures and the top-down approach resulted in too many disclosures being retained, as removal was difficult to justify with the KDAs.

      5.             Feedback from Australian stakeholders confirmed that ED 277 still resulted in too many disclosures. While the Board had intended to conduct further outreach and consultation on the proposals in ED 277, any further work was put on hold following the issue of the revised Conceptual Framework by the IASB in March 2018 and the decision by the Board to reform the Australian Financial Reporting Framework and propose removing the ability for entities to prepare SPFS when required to comply with AAS by legislation or otherwise.

Issue of ED 295 – New disclosure Standard based on the disclosures in IFRS for SMEs Standard

      1.             In weighing up the shortfalls of RDR, the other proposed Tier 2 options and the disclosure principles applied by the IASB while developing the IFRS for SMEs Standard, the Board decided in February 2019 to develop a new Tier 2 Standard based on the disclosures in