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Detail of the proposed changes
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Additional disclosures will be required for those entities who prepare special purpose financial statements as follows:
1. The reason why Special Purpose Financial Statements are prepared, rather than General Purpose.
2. If the entity is a parent entity and has not prepared a consolidated report, the reason for not consolidating (same requirements for associates and joint ventures).
3. A statement as to whether the stated policies in the financial report comply with the requirements of accounting standards and where they do not comply with, a summary as to the extent of non-compliance.
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Various accounting standards currently refer to not-for-profit entities. However, there is currently no clear definition which can be applied across all standards or for the financial report as a whole.
Therefore, the AASB has performed a “clean up” of terminology and formally developed a definition of a not-for-profit entity, being:
“an entity whose primary objective is to provide goods or services for community or social benefit and where any equity has been provided with a view to supporting that primary objective rather than for a financial return to equity holders.”
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