Relevant Accounting Points

Relevant Accounting Points

Research results At the time of writing, a significant amount of research has been undertaken on the numbers of entities lodging special purpose financial statements with the Australian Securities and Investments Commission (CASSIA inconsiderately their assessment as special purpose was appropriate and whether they complied with all measurement and recognition requirements in Australian Accounting Standards.

The results indicate that: The vast majority of entities are lodging special purpose financial statements (about 80 per cent of entities) Recognition and measurement requirements are not rigorously followed in special purpose financial statements The quality of accrual accounting is lower in special purpose financial statements than general purpose financial statements. In view of the large number of entities lodging special purpose financial statements with Aesthete Saber of the view that the reporting entity concept in SAC 1 Definition of the Reporting Entity has not been applied correctly.

The future At their April 2013 meeting the Scabbiness’s the future role off deporting entity concept. There was general agreement that: They (Squabbled use the reporting entity concept as a basis for their own deliberations in setting general purpose financial reporting requirements Other regulators could use the reporting entity inceptor identify entities that should be required to prepare and lodge general purpose financial statements They would change their application focus of Australian Accounting Standards from the reporting entity concept to that of general purpose financial statements.

There was also general agreement amongst the board members that: The Substantiated is to set accounting standards for preparing general purpose financial statements under Tier 1 or Tier 2, and Setting requirements for special purpose financial statements is a matter to be agreed between preparers and users.

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