What is the Tier 1 reporting requirements?
Demands full application of all standards and interpretations.
What is the Tier 2 reporting requirements?
Less disclosure is allowed by applicable entities.
Tier 1 applies to who?
- For-profit private sector entities that have public accountability
- Australian government and state, territory and local governments.
Tier 2 applies to who?
- For-profit private sector entities that do not have public accountability
- Not-for-profit sector entities
- Public sector entities other than Australian government and state, territory, and local governments.
When does an entity have public accountability?
- If trading of their debt or equity instruments happens in a public market. Or it is preparing to issue these instruments in the public market.
- Assets are held by the entity in a fiduciary capacity for a broad group of outsiders as one of its main businesses.
What is a disclosing entity?
With some exceptions, it’s entities who list their securities on a securities exchange.
What is a public company?
Those companies who have their investments open to the public.
What is a proprietary company?
Private company, i.e. investments are not open to the public.
What is a registered scheme?
A managed investment scheme that is registered under 601EB of the Corporations Act.
What is the conceptual framework?
Prescribes the nature, function and limits of financial reporting.
What is the purpose of the conceptual framework?
- Helps preparers handle issues that is not outlined in the standards.
- Guide on how to interpret statements for all parties.
- Helps with standard consistency.
What are the two types of characteristics of financial reporting identified in the Conceptual Framework?
- Fundamental: relevance and faithful representation
- Enhancing/Qualitative: timeliness, comparability, verifiability and understandability.
What is relevance?
Information that has the ability to make a difference whether the users use it or not.
What is faithful representation?
When the economic phenomenon is represented entirely, neutrally and with no material error.
What is comparability?
Allows users to compare differences and similarities with other economic phenomena.
Verifiability
Assures users that the economic phenomena’s information represented is faithfully represented.
What is timeliness?
Providing information to users prior to when its ability to influence decisions diminishes.
What is understandability?
Enables users to comprehend its meanings.
