Moves to replace special purpose statements

Moves to replace special-purpose statements

The Australian Accounting Standards Board (AASB) is to consult in May on the ending of special-purpose financial statements for entities complying with Australian accounting standards.

The AASB’s international counterpart’s revised Conceptual Framework includes a definition of ‘reporting entity’ that conflicts with the counterpart Australian concept used to determine when an entity should prepare general-purpose financial statements.

According to the AASB, the conflict must be resolved to avoid confusion, non-compliance with international reporting standards and directors’ potential liability.

The AASB proposes to:

Make the revised framework applicable to entities required to prepare financial statements in accordance with Australian standards
Remove the current definition of reporting entity from Australian accounting requirements, effectively removing the option to prepare special-purpose financial statements, if entities are required by legislation or otherwise to comply with Australian standards, and
Provide an alternative Tier 2 general-purpose financial-statement framework ‘specified disclosure requirements’ that requires only four incremental disclosures to those currently required under current ASIC regulatory guidance for entities preparing special-purpose financial statements.

The move would have important consequences for some entities, effectively removing the option to prepare special-purpose statements (if they are required by legislation or otherwise to comply with Australian standards).

The proposals will be discussed in an AASB consultation paper, which will be released shortly.

The AASB wants to hear your views on:

The effect of removing the ability to prepare special-purpose financial statements
The usefulness of related-party, revenue, impairment and tax disclosures, and
The effect of consolidation and equity accounting requirements.

Consultation sessions are in Melbourne (14 May), Sydney (17 May), Brisbane (18 May), Adelaide (21 May) and Perth (22 May).  Register at

The GAAP Consulting team would also like to hear your views.  We will be there.  Please provide your comments to