ED 295 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities proposes to replace the current Reduced Disclosure Requirements (RDR) framework with a Simplified Disclosure Standard. All entities currently using the RDR framework will fall into this new regime. It is important to note the proposals in ED 295 are closely linked to those expected in the forthcoming Exposure Draft on the proposed removal of special purpose financial statements (SPFS). The AASB received feedback that the current RDR framework was too onerous and with the pending removal of SPFS those entities moving from the SPFS to RDR would find this task extremely difficult. So by creating a new Tier 2 of reporting the ‘Simplified Disclosure Standard’ this would provide immediate relief to those entities currently using the RDR framework as well as reducing the cost for entities having to transition from SPFS to general purpose financial statements.
The AASB notes:
‘The Simplified Disclosure Standard has been developed based on the IFRS for SMEs disclosures, adapted for differences in recognition and measurement (R&M) requirements between AAS and IFRS for SMEs, and to accommodate not-for-profit (NFP) specific circumstances’
ED 295 does not change the recognition and measurement (R&M) requirements of the RDR framework, it only impacts on disclosures. As under the RDR framework the R&M for those applying full IFRS and those applying the Simplified Disclosure Standard should be the same.
The proposed effective date of these changes is for annual reporting periods beginning on or after 1 July 2020.
Please use the link below to access a full version of the ED and in particular review Appendix C for a list of the Standards and specific disclosure paragraphs that would not apply to an entity under AASB 10XX Simplified Disclosures for Tier 2 Entities.
Click here to be directed to the Exposure Draft
Click here to be directed to a detailed Staff Analysis
Please submit your comments to the AASB by 15 November 2019