Thursday, September 23, 2021
ED 314 incorporates IASB ED/2021/7, which proposes a reduced set of disclosure requirements for eligible subsidiaries without public accountability that apply IFRS Standards.
These subsidiaries report to their parent entity for consolidation purposes applying IFRS Standards. The proposals would permit eligible subsidiaries to apply reduced disclosure requirements in conjunction with the recognition, measurement and presentation requirements in IFRS Standards.
The proposals would:
> eliminate the need to maintain an additional set of accounting records for reporting purposes—if the subsidiary currently does not apply IFRS Standards in its own financial statements but elects to adopt the resulting IFRS Standard; and
> reduce the disclosures required to comply with IFRS Standards.
The proposals in this Exposure Draft were developed by the IASB based on the disclosure requirements of the IFRS for SMEs Standard. The IASB ED in ED 314 proposes the same approach as in AASB 1060, i.e. entities would be required to apply all the recognition and measurement requirements in IFRS Standards and the disclosure requirements in the (proposed) Standard.
IFRS compliance for Australian entities reporting under Tier 2 reporting requirements is not required. Entities reporting under Tier 2 reporting requirements prepare general purpose financial statements using AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.
The AASB will consider a comparison between AASB 1060 and the proposals in the Exposure Draft, as well as any feedback received from stakeholders, in considering whether it is appropriate to amend or replace AASB 1060.