Welcome to our final edition of Beyond the numbers. Nexia Australia wishes all our readers
a safe and joyful Christmas and a happy New Year. Beyond The Numbers will be back in February 2026.
Top story
The Australian Securities and Investments Commission (ASIC) has reissued Regulatory Guide 34 Auditor obligations: Reporting to ASIC (RG 34). RG 34 describes the scenarios that ASIC believes represent a significant contravention of the Corporations Act 2001 (the Act) that the auditor is required to report to ASIC.
The reissued RG 34 clarifies that ASIC considers an entity’s failure to lodge its financial report by the due date is a significant contravention of the Act. In ASIC’s view, your auditor should notify ASIC if they become aware that the entity has failed to lodge its financial report on time, and in any case:
- For listed or disclosing entities: Immediately upon failure to lodge by the due date.
- For all other entities: If the report remains outstanding 28 days after its due date.
ASIC can impose substantial fines on a company – currently up to $198,000 per event – for failing to comply with its lodgement obligations.
Entities that have not lodged a financial report with ASIC when required should do so without further delay.
Those that are unable or unlikely to meet their reporting deadlines should seek an extension of time by applying for relief through the ASIC regulatory Portal. Refer RG 51 Applications for relief.
Local reporting
The Australian Accounting Standards Board (AASB) released its Exposure Draft (ED) 338 Application of AASB 18 and AASB 107 by Superannuation and Not-for-Profit Entities and Operating Cash Flow Reconciliation.
Key amendments proposed in the ED include:
- Requiring superannuation entities applying AASB 1056 Superannuation Entities to present and classify expenses under that standard rather than AASB 18 Presentation and Disclosure in Financial Statements.
- NFP entities in the private and public sector to consider user information needs in the Conceptual Framework instead of considering what line items provide the most useful information about the main components or drivers of the entity’s profitability as set out in AASB 18.
- NFP public sector entities, including governments, may elect not to classify income and expenses by activity, apply certain AASB 18 paragraphs, or disclose management-defined measures.
- AASB 107 Statement of Cash Flows to permit superannuation entities and NFP public sector entities to classify interest and dividends as operating cash flows and allow profit or loss totals as the starting point for indirect cash flow reconciliations.
Submissions on the Exposure Draft are open until 27 February 2026.
The AASB is seeking feedback for the AASB’s Post-implementation Review of AASB 1060 Simplified Disclosures for Tier 2 Entities and AASB 2020-2 Removal of Special Purpose Financial Statements.
As part of this review, the AASB is also consulting on possible amendments to AASB 1060 in response to amendments to the IFRS for SMEs Accounting Standard by the IASB and the adoption of AASB 18 Presentation and Disclosure in Financial Statements.
Finally, the AASB is considering whether IFRS 19 Subsidiaries without Public Accountability: Disclosures is suitable for adoption in Australia and how this might be implemented within the Tier 2 framework.
Submissions on ITC 56 close on 22 January 2026.
A four-part webinar series discussing the proposed amendments is available on the AASB’s YouTube channel.
The AASB made the following key decisions on its redeliberations of Exposure Draft ED 335 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities:
- To more clearly explain the not-for-profit entities to which the Tier 3 Standard is intended to apply, such as charities;
- To clarify that an entity discontinues fair value measurement and applies the cost model for investments in unlisted equity instruments and investments in subsidiaries, associates and joint ventures in separate financial statements, when the variability in the range of reasonable fair value measurements is significant and their probabilities cannot be reasonably assessed;
- To delete the requirements to disclose the nature and amount of loans for which items of property, plant and equipment and intangible assets are pledged as security; and
- To delete the specific disclosures of guarantees and the examples of firm commitments.
The Board decided that the effective date of the Tier 3 Standard would be annual reporting periods beginning or after 1 July 2029, with earlier application permitted.
Chartered Accountants Australia and New Zealand (CA ANZ) launched a resource hub to support charities and not-for-profit organisations with their reporting requirements. The hub brings together the latest news, guidance, resources and frequently asked questions in one place.
Among other topics, the hub currently includes information on:
- The proposed Tier 3 General Purpose Financial Statement (GPFS) standard for smaller NFPs in Australia;
- Revised Tier 3 and Tier 4 Standards in New Zealand;
- Audit and assurance requirements; and
- A sustainability playbook for NFPs.
Regulations
ASIC released its enforcement priorities for 2026 which are:
- Financial reporting misconduct, including failure to lodge financial reports;
- Misleading pricing practices impacting the cost of living for Australians;
- Poor private credit practices;
- Claims and complaint handling failures by insurers; and
- Continuing work to hold those responsible to account for the collapse of the Shield and First Guardian Master Funds.
ASIC published Report REP 819 ASIC’s oversight of financial reporting and audit 2024–25 setting out the results of ASIC’s program of work on financial reporting and audit from 1 July 2024 to 30 June 2025, including:
- Findings from financial reporting and audit surveillance of companies;
- Enforcement and compliance actions against registered company auditors and outcomes relating to company financial reports;
- Observations on voluntary sustainability reporting to assist preparers of mandatory sustainability reports; and
- Observations on auditor reporting to ASIC.
The Australian Charities and Not-for-profits Commission (ACNC)’s latest review of 250 charities’ Annual Information Statements (AISs) and Annual Financial Reports (AFRs) for the 2023 reporting period has highlighted both strengths and areas for improvement in charity financial reporting.
Focusing on medium and large organisations, where reporting risks tend to be higher, the ACNC assessed:
- Compliance with KMP remuneration and related-party transaction disclosures: More than 90% were compliant. Common errors included incorrectly stating the number of remunerated KMPs or reporting the total remuneration incorrectly.
- Consistency between the AIS and AFR: 82% of reviewed charities showed no material discrepancies. The remaining 18% required adjustments totalling $2.8 billion in revenue and $5.8 billion in assets.
- Completeness of financial reports, including the Responsible Person’s declaration and the audit or review report: Approximately 90% were compliant.
The ACNC has also released a webinar providing a step-by-step guide to completing the Annual Information Statement.
ASX released a consultation on proposed amendments to the ASX Listing Rules in light of mandatory sustainability reporting commencing on 1 January 2025 for Group 1 entities.
The proposed changes would maintain the existing position under Listing Rule 17.5, whereby a listed entity’s securities are suspended only if it fails to lodge its directors’ report, financial statements or auditor’s report by the due date. Late sustainability reports would not trigger suspension, although other compliance actions may still arise.
The consultation closed on 28 November 2025.
Sustainability
Supported by the AASB, Auditing and Assurance Standards Board, Chartered Accountants Australia and New Zealand and The University of Sydney Business School, researchers from the University of Sydney, Deakin University, and the Australian National University are seeking participants in a survey to understand the challenges that Group 2 and 3 entities face in preparing for the adoption of climate-related reporting and to identify feasible approaches and support mechanisms that can help address these challenges.
The survey will develop a snapshot of the implementation readiness of Australian reporting entities for the mandatory climate-related reporting.
The AASB has released new educational guidance on disclosing anticipated financial effects of climate-related risks and opportunities in accordance with AASB S2 Climate-related Disclosures.
The guide is structured into three sections:
- An overview of AASB S2’s requirements on disclosures about current and anticipated financial effects of climate‑related risks and opportunities;
- The proportionality mechanisms available to preparers; and
- Illustrations of disclosure of information about anticipated financial effects.
The guidance also provides insights on the relationship of the above disclosures to the entity’s financial statements.
Subject to consideration of the ISSB’s final wording, the AASB decided to amend AASB S2 Climate-related Disclosures consistently with amendments to IFRS S2 in relation to clarifying the:
- Measurement and disclosure of Scope 3 Category 15 greenhouse gas emissions;
- Industry-based classification of specific financed emissions disclosures;
- Application of jurisdictional relief from using the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004); and
- Application of jurisdictional relief for global warming potential values.
The amendments to AASB S2 are expected to be finalised at the Board’s 15 December 2025 meeting and the amending Standard published before the end of the year.
The Chartered Accountants Australia and New Zealand (CA ANZ) released its Sustainability Playbook, a practical guide to help finance professionals embed sustainability into reporting, assurance, strategy, and governance.
The playbook outlines actionable strategies for building capability within finance teams, preparing for sustainable accounting and audit practices, and applying real-world examples of climate-risk management and value creation. It also provides learning resources to support ongoing professional development.
The International Sustainability Standards Board (ISSB) announced that it will build on the Taskforce on Nature-related Financial Disclosures (TNFD) framework to develop new requirements for reporting nature-related risks and opportunities. These requirements will complement the current standards, IFRS S1 and IFRS S2, and aim to meet investor demand for more consistent information on biodiversity, ecosystems, and ecosystem services.
The ISSB intends to publish an Exposure Draft by October 2026, to coincide with the UN Convention on Biological Diversity COP17. The Board is considering several options, such as adding guidance to existing standards, amending them, or creating a new standard. The TNFD will finish its technical work by Q3 2026 and then pause further development, allowing the ISSB to use its framework as the basis for a global approach. The ISSB also plans to release educational material to help companies apply the new requirements.
The ISSB encourages companies to continue using TNFD guidance as they prepare for future ISSB standards.
IFRS developments
The International Accounting Standards Board (IASB) met in November 2025 to discuss proposed amendments to the equity method under IAS 28, as well as progress on its broader work plan.
Key tentative decisions affecting companies with investments in associates or joint ventures include:
- Initial measurement: When an investor obtains significant influence or joint control, the investment would be measured at the fair value of the consideration transferred, including any previously held interest. Contingent consideration would also be measured at fair value.
- Subsequent measurement of contingent consideration: After significant influence or joint control is obtained, contingent consideration classified as equity would not be remeasured. All other contingent consideration would be remeasured at each reporting date, with changes recognised in profit or loss.
- Additional acquisitions: Subsequent purchases of ownership interests would also be measured at fair value.
- Partial disposals: On disposing of a portion of an investment, the derecognised interest would be measured on a proportionate basis, with any resulting gain or loss recognised in profit or loss.
The IASB will continue redeliberating these proposals on their future meetings.
The IFRS Interpretation Committee published Compilation of Agenda Decisions—Volume 13, covering its decisions from May 2025 to October 2025.
The IASB issued Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21). The amendments are effective for annual periods beginning on or after 1 January 2027, with early application permitted.
The main changes include:
- If an entity’s functional currency is from a non-hyperinflationary economy but its presentation currency is from a hyperinflationary economy, the entity translates — including comparatives — using the closing rate at the date of the most recent statement of financial position.
- If the presentation currency is no longer hyperinflationary, and the functional currency is still non-hyperinflationary, the entity applies the usual IAS 21 translation method going forward, without restating comparatives.
- Entities would have to disclose that they have applied this method and provide summary financial information about the affected foreign operations. They must also disclose when an economy is no longer hyperinflationary.
The Amending Standard is available to IFRS Digital subscribers on the IFRS website.
In case you missed it
Effective 1 July 2025, the NSW Government introduced a mandatory portable long service leave (LSL) scheme for the Community Services Industry. Under the scheme, workers will be entitled to up to six weeks of paid leave after seven years of service to the industry with one or more employers, with foundation workers receiving a one-year service credit bonus.
The scheme applies to full-time, part-time and casual employees and will be administered by the Long Service Corporation (LSC). The new scheme will be supported via a levy of 1.7% of gross ordinary wages paid quarterly by eligible employers and any self-employed contractors who opt-in to the scheme. Eligible employers must register with Service NSW.
Financial reporting implications include recognising the levy under AASB Interpretation 21 Levies and a reimbursement asset under AASB 119 Employee Benefits, where applicable. Employers must continue to account for LSL liabilities under the Long Service Leave Act 1955 (NSW), with reimbursement rights available for service accrued from 1 July 2025.