Date issued: 21 May 2010
The Australian Accounting Standards Board (AASB) has tentatively decided to go ahead with the introduction of its Reduced Disclosure Regime (RDR) and not introduce the International Financial Reporting Standard (IFRS) for small to medium sized enterprises’ (SME) standard.
AASB will defer any decision to remove the reporting entity concept until it is confident with the current differential reporting system and the impact to remove the reporting entity concept on Special Purpose Financial Statement (SPFS) preparers.
The AASBs tentative decisions will mean that for profit reporting entities without public accountability as defined, all not-for-profit private sector reporting entities and public sector reporting entities — other than federal, state, territory and local governments, including at the level of whole of government and general government sector (i.e., Tier 2 entities) — would have the option to use the RDR, for reporting periods beginning on or after 1 July 2013 with the opportunity to early adopt the option to use RDR for periods ending on or after 30 June.
The requirements for all other reporting entities (i.e., Tier 1 entities) will remain unchanged.
CPA Australia’s position on this matter is:
- that for Tier 2 reporting entities IFRS for SMEs should be available as an option to using the full set of IFRS as adopted in Australia
- to accept the RDR as a further option
- agree with the AASBs decision to defer the decision to remove the reporting entity concept and note the decision to undertake further research
- continue to consult with members on the impact of the AASBs proposal to remove the reporting entity concept on SPFS preparers and users
This week the International Accounting Standards Board has written to CPA Australia of their plans that over the next couple of months they will publish for comment eleven exposure drafts, including seven on major projects. Given the large number of countries that make current use (or are committed to the use) of IFRS the outcomes of the eleven exposure drafts are likely to have a significant impact on the financial reporting landscape of individual jurisdictions.
Members can email comments on CPA Australia’s position in this to professional.standards@cpaaustralia.com.au