What’s happened?
In March 2020, the AASB said from 30 June 2022, certain for-profit private sector entities who prepare Special Purpose Financial Statements (SPFS) to lodge with the Australian Securities and Investment Commission (ASIC) would no longer be able to do so.
From 30 June 2022, they have had to prepare accounts using the new Simplified Disclosures for For-Profit and Not-for-Profit Entities, (known as AASB 1060). The new AABS 1060 replaces the current Tier 2 Reduced Disclosure Regime (RDR).
Why?
The AASB wanted to bring the Tier 2 RDR in line with international practices, specifically the International Financial Reporting Standards (IFRS).
What about the accountants?
Accountants with clients who have previously prepared SPFS now need to review if their accounts should now be prepared using AASB 1060.
But the good news is….
Accountants who in the past have prepared Tier 2 RDR accounts for clients will have a less time-consuming disclosure burden as they can now follow the AABS 1060 procedure.
What about not-for-profits (NFPs) currently preparing RDR?
There’s no explicit disclosures for NFPs so they’ll follow the same guidance as for-profit entities.
Will I need to restate my prior year figures?
Hmmmm maybe. It depends (download the white paper for more information).
Will this increase the preparation time to create a set of accounts?
It’s very likely you’ll need extra preparation time. And your staff may need extra training.
But the good news is ….
With all the extra training you and your staff will have, you can start offering extra services. This means if you’re a smaller firm, you can start attracting bigger clients. This could all mean a period of growth for your practice.