AASB 2022-4

New standard released in late June 2022 will result in increased disclosures for many special purpose financial statements of for-profit entities

Although many for-profit entities will no longer be able to prepare general purpose financial statements, special purpose financial statements will exist for those private sector not-for-profit entities:

  1. who don’t have either
    1. a legislative requirement to prepare financial statements in accordance with Australian Accounting Standards or Accounting Standards OR
    2. a requirement in a constituting or other document to prepare financial statements in accordance with Australian Accounting Standards OR
  2. who have a requirement in a constituting or other document to prepare financial statements in accordance with Australian Accounting Standards but that document was created before 1 July 2021 and has not been amended since that date.

Entities who are preparing special purpose financial statements through the path documented in 2 above will be required to include additional disclosures in their financial statements from 30 June 2022 due to the issue of AASB 2022-4 Amendments to Australian Accounting Standards – Disclosures in Special Purpose Financial Statements of Certain For-Profit Private Sector Entities.

These disclosures are set out in the diagram below:

The additional disclosures will be included in AASB 1054 Additional Australian Disclosures at paraghraphs 9C and 9D.

The disclosures have not been included in the 2021 Caseware financials due to the late release of the accounting standard (released on 23 June 2022), however there are four disclosure examples included in the standard which illustrate the following scenarios:

  • Entity complies with all recognition and measurement requirements in Australian Accounting Standards, including AASB 10 and AASB 128 (i.e. consolidation and equity accounting)
  • Entity complies with all recognition and measurement requirements in Australian Accounting Standards, excluding AASB 10 and AASB 128
  • Entity has known non-compliance with recognition and measurement requirements in Australian Accounting Standards that is not extensive
  • Entity has known non-compliance with recognition and measurement requirements in Australian Accounting Standards that is extensive

These examples will need to be tailored for the specific circumstances of the special purpose financial statements prepared and can be found from page 12 of AASB 2022-4.

The disclosures required by AASB 2022-4 along with relevant guidance will be included in the 2022 Caseware release.

Other Caseware reference documents on this topic: