INTHEBLACK February 2023 - Magazine - Page 25
“Any change to legislation or regulations
to effect such specification – if considered
necessary – would take time. The board
intends to work collaboratively with key
legislative authorities and regulatory bodies
to enable the orderly application of the
proposals, where invited to do so, and to the
extent it is able.”
Gyles says that, while many stakeholders
support having specific reporting requirements
for smaller NFP entities, there are different
views about the requirements and how they
could apply.
“From its preliminary outreach, the [AASB]
board appreciates stakeholder feedback
supporting a single set of objective reporting
thresholds,” she says.
“Ultimately, the board views the
establishment of appropriate reporting
thresholds and any dictate of a specific form
of general purpose financial statements to be
more appropriately within the remit of the
relevant legislation or regulatory authority.
“The board is aware that its planned scope
puts the onus on the relevant regulatory body
to specify the type of general purpose financial
statements to be prepared, where the regulatory
body considers such specification necessary.
THE TRANSITION JOURNEY
Subramanian says that the transition
considerations for the new Tier 3
reporting will be another key challenge,
particularly because the new accounting
standard would remove the ability for
smaller NFPs to prepare special purpose
financial statements using selected AAS.
“Experience tells us, based on what has
already happened in the for-profit space
in the private sector for 30 June 2022
year-ends, that there will be challenges
with the transition,” Subramanian says.
“The legislative requirements in the forprofit space largely required no changes to
accommodate the removal of special purpose
financial reporting. The not-for-profit
regulatory space will need changes and the
magnitude of change is far more than the
for-profit space.”
There are also questions around
what applicable assurance will apply to
the new standard, and whether there
will be any bespoke guidance or other
requirements coming out of the Auditing
and Assurance Standards Board to assist
in the audit or review of the financial
reports that are based on the new
accounting standard, adds Subramanian.
“There are always rough edges that can
be worked on, and that is why there is
a consultation period to identify rough
edges and smooth them over,” he says.
Gyles says the AASB has not yet
finalised a timeline for potential transition
to the Tier 3 reporting framework.
“The proposals would be subject to further
public consultation, such as an exposure draft.
Typically, the AASB will issue a standard
with at least two years of lead time before
its effective date and generally permits
entities to apply those requirements early
should they wish to do so,” Gyles says.
READ
an INTHEBLACK
article on NFP
accounting
LISTEN
to a CPA Australia
podcast on
financial reporting
in Australia
intheblack.cpaaustralia.com.au 25