What do you mean by Special Purpose Financial Statements?

Special purpose financial statements is such set of financial statements which are prepared using special purpose framework to cater special needs of specific users of financial statements.

The Standard identifies the principles of control, determines how to identify whether an investor controls an investee and therefore must consolidate the investee, and sets out the principles for the preparation of consolidated financial statements. The Standard introduces a single consolidation model for all entities based on control, irrespective of the nature of the investee (i.e. whether an entity is controlled through voting rights of investors or through other contractual arrangements as is common in 'special purpose entities').

Under AASB, control is based on whether an investor has:

 • Power over the investee 

 • Exposure, or rights, to variable returns from its involvement with the investee, and

 • The ability to use its power over the investee to affect the amount of the returns.

 

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Special purpose financial report means a complete set of financial statements, including the related notes, and an assertion statement by those responsible for the financial report, prepared in accordance with a special purpose framework. The related notes ordinarily comprise a summary of significant accounting policies and other explanatory information. The requirements of the applicable financial reporting framework determine the format and content of a financial report prepared in accordance with a special purpose framework.