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  • Transitional administrative approach for significant global entities required to lodge general purpose statements

    We will take a transitional administrative approach to assist you for the first year that section 3CA of the Taxation Administration Act 1953 (TAA 1953) takes effect. This change requires some corporate tax entities to provide a general purpose financial statement (GPFS) prepared in accordance with Australian Accounting Standards.

    This transitional administrative approach applies to you, for your income year commencing in the year from 1 July 2016 to 30 June 2017, if you:

    • fall within scenario 2 in Table 1 of the Provision of general purpose statements by significant global entities
    • choose not to give a stand-alone GPFS or GPFS consolidating just the Australian members of your accounting consolidated group
    • instead seek to satisfy section 3CA by lodging a financial statement that relates to you and is prepared under other commercially accepted principles relating to accounting.

    Why we are offering a transitional approach

    For income years commencing on or after 1 July 2016, you must give the Commissioner of Taxation a GPFS prepared in accordance with Australian Accounting Standards where:

    • you are a corporate tax entity
    • you meet the conditions set out in subsection 3CA(1) of the TAA 1953
    • the Australian Accounting Standards apply to you.

    Whether a GPFS is prepared in accordance with Australian Accounting Standards is a question of fact. Any financial reports prepared in accordance with Australian Accounting Standards must duly note this fact (see AASB 1054).

    While paragraph 3CA(5)(a) of the TAA 1953 mandates how your GPFS must be prepared, we understand that you may:

    • experience difficulties in establishing systems within the time that you have to give us a GPFS prepared in accordance with Australian Accounting Standards, and/or
    • encounter unexpected additional costs, particularly if you have not previously prepared your financial reports in accordance with Australian Accounting Standards, and
    • as a consequence, be at risk of exposure to administrative penalties for not meeting the requirements of section 3CA.

    In recognition that you may experience transitionary problems we are offering an interim administrative approach for the first year that section 3CA requires lodgment of a GPFS. Taking up our transitional approach is optional for you.

    The scope of our transitional administrative approach

    During the first year that section 3CA requires lodgment of a GPFS, that is, for your income year that commenced between 1 July 2016 and 30 June 2017, we will not review whether a GPFS given to the Commissioner is prepared in accordance with Australian Accounting Standards. This is as long as it is prepared consistently with another country's commercially accepted accounting principles.

    If the financial statement given by you does not comply with the law in some other way we may review your GPFS.

    GPFS reporting – lodgment concession

    A lodgment concession is available if your income tax year ended on 30 June 2017. You have until 4 April 2018 to lodge your GPFS.

    This is a lodgment concession for your GPFS only. You don't need to apply for the lodgment concession.

    Last modified: 28 Sep 2017QC 53406