Application of Australian Accounting Standards under the Differential Reporting Framework (AASB1053_06-10_COMPmar21_07-21)

The following types of entities shall prepare general purpose financial statements that comply with Tier 1 reporting requirements:

(a) for-profit private sector entities that have public accountability and are required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards; and

(b) the Australian Government and State, Territory and Local Governments.

Subject to AASB 1049, GGSs of the Australian Government and State and Territory Governments shall apply Tier 1 reporting requirements.

Tier 2 reporting requirements shall, as a minimum, apply to the general purpose financial statements of the following types of entities:

(a) for-profit private sector entities that do not have public accountability;

(b) not-for-profit private sector entities; and

(c) public sector entities, whether for-profit or not-for-profit, other than the Australian Government and State, Territory and Local Governments.

These types of entities may elect to apply Tier 1 reporting requirements in preparing general purpose financial statements.

Entities applying Tier 2 reporting requirements would not be able to state compliance with IFRSs.

Whilst Tier 2 reporting requirements are available under this Standard for general purpose financial statements of non-publicly accountable for-profit private sector entities, not-for-profit private sector entities and public sector entities (both for-profit or not-for-profit) other than those required to apply Tier 1 reporting requirements, regulators might exercise a power to require the application of Tier 1 reporting requirements.

Disclosures under Tier 2 reporting requirements are the minimum disclosures required to be included in general purpose financial statements. Entities may include additional disclosures using Tier 1 reporting requirements as a guide if, in their judgement, such additional disclosures are consistent with the objective of general purpose financial statements.