As a result of its post-implementation review of Tier 2 requirements for general purpose financial statements (reduced disclosure requirements), the Australian Accounting Standards Board (AASB) recently issued Exposure Draft 277 Reduced Disclosure Requirements for Tier 2 Entities to address concerns about the length and relevance of financial statements prepared using the reduced disclosure requirements (RDR).
Results of the review indicated that:
The Exposure Draft includes a draft policy for the AASB’s approach to determining which disclosures are required for the RDR which includes a revised decision-making framework to provide a consistent basis for determining the minimum disclosure requirements for Tier 2 entities.
The Exposure Draft proposes to change this approach and instead include all the RDR disclosures in an appendix at the back of each standard.
Currently, Reduced Disclosure Requirements (RDR), i.e. disclosures not required, are shaded in grey in the applicable Australian Accounting Standards.
It is proposed that the proposals will be effective for annual periods beginning on or after 1 January 2019.
Early application would be permitted for annual periods beginning on or after 1 January 2018 but:
No changes are proposed to the types of entities able to apply RDR (i.e. Tier 2 entities).
Comments are due by 26 May 2017.