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18 Mar. 2020

Removal of Special Purpose Financial Statements for certain types of for-profit private sector entities

For annual periods beginning on or after 1 July 2021, certain types of for-profit private sector entities will no longer be able to prepare special purpose financial statements under AASB Standards.
 
Following the issue of AASB 2020-2 the following for-profit private sector entities will no longer be able to prepare special purpose financial statements (SPFS) for reporting periods beginning on or after 1 July 2021:

  •  entities preparing financial statements under Part 2M.3 of the Corporations Act 2001 including large proprietary (including grandfathered entities), unlisted public (other than companies limited by guarantee), small foreign-controlled companies, financial services licensees and small proprietary companies with crowd-sourced funding;
  • co-operatives and mutuals and others required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards;
  • trusts, partnerships and joint arrangements whose constituting document or another document requires the preparation of financial statements that comply with AAS if the relevant document was created or amended in any way on or after 1 July 2021; 
  • other for-profit entities (both private and public sector) that elect to prepare general purpose financial statements.

To reduce the burden on entities no longer able to prepare SPFS, a revised Tier 2 general purpose financial statements framework, Simplified Disclosures will replace the current Reduced Disclosures Requirements framework.  AASB 1060 will be issued shortly and will also apply to those entities currently preparing GPFS in accordance with the RDR framework including not-for-profit entities in both the public and private sectors.
 
Transitional relief from restating comparative information is available for entities no longer able to prepare SPFS if they choose to early adopt the new requirements.
 
Not-for-profit private or public sector entities that prepare SPFS are not affected, but their continued ability to prepare SPFS will be considered as part of the forthcoming Australian Financial Reporting Framework project for not-for-profit private and public sector entities.

18 Mar. 2020

Removal of Special Purpose Financial Statements for certain types of for-profit private sector entities

For annual periods beginning on or after 1 July 2021, certain types of for-profit private sector entities will no longer be able to prepare special purpose financial statements under AASB Standards.
 
Following the issue of AASB 2020-2 the following for-profit private sector entities will no longer be able to prepare special purpose financial statements (SPFS) for reporting periods beginning on or after 1 July 2021:

  •  entities preparing financial statements under Part 2M.3 of the Corporations Act 2001 including large proprietary (including grandfathered entities), unlisted public (other than companies limited by guarantee), small foreign-controlled companies, financial services licensees and small proprietary companies with crowd-sourced funding;
  • co-operatives and mutuals and others required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards;
  • trusts, partnerships and joint arrangements whose constituting document or another document requires the preparation of financial statements that comply with AAS if the relevant document was created or amended in any way on or after 1 July 2021; 
  • other for-profit entities (both private and public sector) that elect to prepare general purpose financial statements.

To reduce the burden on entities no longer able to prepare SPFS, a revised Tier 2 general purpose financial statements framework, Simplified Disclosures will replace the current Reduced Disclosures Requirements framework.  AASB 1060 will be issued shortly and will also apply to those entities currently preparing GPFS in accordance with the RDR framework including not-for-profit entities in both the public and private sectors.
 
Transitional relief from restating comparative information is available for entities no longer able to prepare SPFS if they choose to early adopt the new requirements.
 
Not-for-profit private or public sector entities that prepare SPFS are not affected, but their continued ability to prepare SPFS will be considered as part of the forthcoming Australian Financial Reporting Framework project for not-for-profit private and public sector entities.

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