Accounting Standard AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities
Transitional requirementsTransitional requirements
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Transitional requirements
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The Board considered whether specific transitional requirements needed to be added to AASB 1053 in relation to AASB 1060, but has concluded that this is not necessary for the following reasons:
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adjustments to recognised amounts will only arise where an entity did not previously report either under Tier 1 or Tier 2 (RDR); and
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the principles of transitioning to full R&M requirements are the same, regardless of the level of disclosures to be provided.
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Therefore, the Board concluded that the transition requirements in paragraph 18A of AASB 1053 can be retained without further changes (except some changes required by AASB 2020-2 to clarify the scope of the paragraph for certain entities required to consolidate for the first time). However, the Board decided to add an explanatory paragraph 18C to AASB 1053 which confirms the different disclosures that apply to Tier 2 entities that apply this Standard.
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The Board acknowledged that the adoption of this new Tier 2 Standard as such will not result in any adjustments to recognised amounts unless an entity has not previously complied with all R&M requirements of AAS and is preparing GPFS for the first time. Separate transition relief has been provided in Appendix E of AASB 1053 Application of Tiers of Australian Accounting Standards for entities moving from SPFS to Tier 2 GPFS when adopting the requirements of AASB 2020-2. Further discussion of the Board’s consideration on this matter is available in AASB 2020-2 paragraphs BC122−BC144.
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The Board also decided to retain the requirements to explain how the adoption of AAS has affected the entity’s financial position, financial performance and cash flows, and to disclose a description of each change in accounting policy, a reconciliation of the profit and loss for the latest period before adoption, and information about any errors noted in the context of the adoption (paragraphs 208, 210(c), 211 and 212 of this Standard) even though they were not previously required for RDR entities, to keep differences to the IFRS for SMEs Standard at a minimum.