Australia seeks recognition of 'Reduced Disclosure Regime' (RDR)

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15 Feb 2011

The Australian Accounting Standards Board (AASB) has written to the IASB requesting acknowledgement of Australia's 'Reduced Disclosure Regime' (RDR) within the broader IFRS framework.

The RDR involves the same recognition, measurement and presentation requirements as IFRS, but with significantly reduced disclosures (based on the disclosure relief included in the IFRS for SMEs). Malaysia has recently proposed a similar RDR regime for certain entities, and New Zealand is also considering moving towards an RDR regime for its non-publicly accountable entities.

Following is an extract from the AASB's letter, publicly tabled at last week's February 2011 AASB meeting:

"In broad terms, it is reasonable to say that RDR, in terms of the quality of financial reporting it produces, is not inferior to IFRS for SMEs on disclosure and accepts the rigor of IFRS for recognition and measurement.

Indeed, we would say RDR offers two benefits for the IASB. Firstly, it represents a significant field test for future changes in IFRS for SMEs disclosures... Secondly, where RDR and IFRS for SMEs requirements are the same, which is the great majority of circumstances, RDR actually provides field tests for the IASB's future consideration of not-for-profit reporting in the private sector by non-publicly accountable entities.

[We are] seeking consideration of the idea that where a country establishes differential reporting requirements that comply with IFRS in terms of recognition, measurement and presentation and are no less onerous than IFRS for SMEs for disclosure, they are not tarred with the 'outsiders' brush..."

Click for AASB Letter to the IASB (link to AASB website).

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