In June 2020, the ATO had advised that new amended accounting standards had been released by the Australian Accounting Standards Board (AASB).
AASB 2020-2 comes into effect from 1 July 2021.
This changes the reporting requirements of certain for-profit private sector entities, which will no longer be able to self-assess financial reporting requirements and prepare special purpose financial statements (SPFS) if their trust deeds were created or amended on or after 1 July 2021, and requires preparation of financial statements that comply with Australian Accounting Standards (AAS).
These entities will now need to prepare, as a minimum, tier 2 general purpose financial statements (GPFS) that comply with all recognition and measurement requirements in AAS and minimum simplified disclosures.
The ATO said these changes mean new SMSFs that are set up after 1 July 2021 and wish to prepare SPFS will need to ensure they don’t have a clause in their trust deeds that requires their financial statements be prepared in accordance with the AAS.
“Similarly, existing SMFSs that intend to change their trust deed after 1 July 2021 should remove such a clause if they wish to continue preparing SPFS,” the ATO said.
“Most SMSF trust deeds refer to the financial statements being prepared in accordance with the super laws and do not refer to the AAS, so this should not become an issue for the majority of SMSFs.”
This comes as an accounting specialist had previously flagged AFSL licensees may also be caught in the crossfire of new financial reporting requirements for companies that previously were not reporting entities, potentially creating a mass exodus.
