1 March 2023 Dr. Keith Kendall Chair Australian Accounting Standards Board Level 14, 530 Collins Street Melbourne VIC 3000 Via email: standard@aasb.gov.au
Dear Dr. Kendall SUBMISSION – DISCUSSION PAPER – DEVELOPMENT OF SIMPLIFIED ACCOUNTING REQUIREMENTS (TIER 3 NOT-FOR-PROFIT PRIVATE SECTOR ENTITIES) We appreciate the opportunity to provide comment to the Australian Accounting Standards Board (the AASB) on the AASB’s Discussion Paper – Development of Simplified Accounting Requirements (Tier 3 Not-for-Profit Private Sector Entities) (the Discussion Paper). Pitcher Partners is an association of independent firms operating from all major cities in Australia. Firms in the Pitcher Partners network are full service firms and we are committed to high ethical standards across all areas of our practice. Our clients come from a wide range of industries and include listed and non-listed disclosing entities, large private businesses, family groups, government entities, not-for-profit entities and small to medium sized enterprises. Consistent, with developments in the for-profit sector, we support the AASB’s intention to remove the reporting entity concept contained in SAC1 for those NFPs that have a legislative requirement to prepare financial statements in accordance with ‘Australian Accounting Standards’. However, we do not support the removal of the reporting entity concept for those NFPs that are required only by their constituting document or another document to prepare financial statements that comply with Australian Accounting Standards. We consider this to be burdensome for no real user benefit and will create much confusion for NFP entities. Our support for the removal of the reporting entity concept for certain NFPs resulting in the expansion of the requirement to prepare general purpose financial statements is based on their being a ‘simpler reporting framework’ for NFPs (Tier 3 Standard), being made available. Without a simpler reporting framework, removal of the reporting entity concept for certain NFPs will increase the reporting burden when adopting general purpose financial statements. There are many smaller NFPs in the community that do not have the skills or resources to adopt either Tier 1 or Tier 2 general purpose financial statement requirements and have historically applied the reporting entity concept and prepared special purpose financial statements. This Discussion Paper is a good start to progressing such a development.