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AASB Roundtable – Sydney: Options for replacing Special Purpose Financial S...

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CPA Australia

3/111 Harrington Street

Sydney, NSW 2000

Australia

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This session will drive conversation around the end of special purpose financial statements for entities complying with Australian Accounting Standards, brought about by the IASB's upcoming issuance of the revised Conceptual Framework.

The 'reporting entity' issue

The IASB's revised Conceptual Framework includes a definition of 'reporting entity' that conflicts with the reporting entity concept used in Australian Accounting requirements to determine when an entity should prepare general purpose financial statements. This conflict must be resolved to avoid confusion, non-compliance with IFRS and potential liability for directors.

The AASB proposes to:

  1. make the revised Conceptual Framework applicable to all entities required to prepare financial statements in accordance with Australian Accounting Standards
  2. remove the current definition of reporting entity from Australian Accounting requirements, effectively removing the option to prepare special purpose financial statements, if entities are required by legislation or otherwise to comply with Australian Accounting Standards
  3. provide an alternative Tier 2 general purpose financial statement framework 'Specified Disclosure Requirements' that requires only four incremental disclosures to those currently required under current ASIC regulatory guidance for entities preparing special purpose financial statements.

This would have important consequences for some entities, effectively removing the option to prepare special purpose financial statements (if they are required by legislation or otherwise to comply with AAS).

These proposals will be discussed in an AASB Consultation Paper which will be released shortly.

Have your say

We want to hear your views and discuss:

  • the impact of removing the ability to prepare special purpose financial statements
  • the usefulness of related party, revenue, impairment and tax disclosures
  • the impact of consolidation and equity accounting requirements.

Your feedback is valuable to the AASB in determining how to adopt the IASB's revised Conceptual Framework in Australia.

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Date and Time

Location

CPA Australia

3/111 Harrington Street

Sydney, NSW 2000

Australia

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