In a joint submission, CPA Australia and CA ANZ have welcomed the IASB’s proposals to permit the use of reduced disclosures by subsidiaries without public accountability that choose to or are required to adopt International Financial Reporting Standards (IFRS) for financial reporting. However, the submission is critical of the board’s decision to limit the scope to those subsidiaries because it ignores the demand that exists amongst IFRS adopters worldwide for a reduced disclosure standard that could be applied by a much wider group of small and medium enterprises (SMEs) without public accountability. The lack of such a standard is what led both Australia and New Zealand to develop their own Tier 2 reduced disclosure regimes.
It therefore encourages the IASB to revisit its scope decision, particularly in light of the fact that the IASB’s approach to the determination of the actual disclosure reductions proposed is broadly similar to that adopted in developing the Australian and New Zealand Tier 2 regimes. The submission supports this disclosure development approach but also recommends that, in the final standard, if disclosures that are more onerous than those required by IFRS for SMEs are included, then a clear justification for these additional requirements be identified.
The concerns over scope were recognised in the joint CA ANZ/CPA Australia submission to the AASB on these proposals, lodged in early November (ED 314). That submission recommended the AASB wait before planning any related changes to its simplified disclosure standard (AASB 1060). The NZASB is not planning to make any changes to its Tier 2 regime at this time, revisiting this decision when the IASB project concludes.
Submission on AASB ED 314
Subsidiaries without public accountabilityRead more