Application of the Reporting Entity Concept in Australia

Abstract

For decades, the reporting entity concept has been the foundation of differential reporting in Australia. Those entities classified as 'reporting entities' are, prima facie, required to produce full GAAP-based financial reports while other (non-reporting) entities are generally able to produce less complex and shorter 'special purpose' financial reports. In recent years, the application of the concept, as originally set out in the Statement of Accounting Concepts (SAC) 1 Definition of the Reporting Entity, has been criticized on several grounds-particularly, that it does not yield the reporting outcomes originally intended by regulators. Our analysis of 1,546 companies lodging financial stat..