Australian accounting standards update on special purpose removal project

AASB Update

In December 2018, we reported on the AASB project to change the reporting entity concept which will result in fewer entities being able to prepare special purpose financial statements.

This project is progressing and we provide some significant decisions made by the Board below, although they are subject to public consultation:

Project details

Date

When does this apply?

Annual reporting periods beginning on or after 1 July 2020 (i.e. 30 June 2021 financial years onwards).

Who

Which entities are affected?

For-profit private sector entities required by legislation to comply with Accounting Standards (e.g. entities required to lodge under the Corporations Act).
Other for-profit private sector entities required only by their constituting document or another document to comply with Australian Accounting Standards, provided that the relevant document was created or amended on or after 1 July 2020; and
Other for-profit entities electing to apply the Conceptual Framework.

Transition relief

Notes on reporting:

Comparatives will not be required to be restated
Prepare statement of financial position at beginning of current period (i.e. 1 July 2020 and 30 June 2021)
Comparative income statement will be that which was previously presented.

Next steps

We will continue to provide updates on this project, however we encourage all entities who are currently preparing special purpose financial statements to consider whether this will be appropriate from 1 July 2020 and speak to your Bentleys advisor to discuss the impact of these changes as soon as possible.