The AASB has approved proposals to prevent certain types of for-profit private sector entities from preparing Special Purpose Financial Statements, for periods beginning on or after 1 July 2021.
For-profit private sector entities will no longer be able to self-assess whether they are “reporting entities”: if they are required to prepare financial statements under the Corporations Act 2001 or other similar legislation, these will have to be General Purpose Financial Statements. Transitional relief from restating comparative information is available only if an entity chooses to apply the requirements early (i.e. in the financial year to 30 June 2021).
From that date, a revised GPFS Tier 2 framework will replace the current Reduced Disclosure Regime framework: the Simplified Disclosures Standard. This standard will be available for both for-profit and not-for-profit entities to use.
Read more about this decision in the AASB’s Action Alert.
For further information, please contact your local RSM contact, or Ralph Martin, National Technical Director.