Welcome to Beyond the numbers, our monthly newsletter which brings you a summary of the latest developments from local and international standard setters and regulators.
Top story
The Australian Securities and Investments Commission (ASIC) has ramped up its focus on large proprietary companies that lost their grandfathered exemption in 2022 but have failed to lodge audited financial reports.
A recent review highlighted widespread non-compliance by previously grandfathered companies, prompting ASIC to initiate broader surveillance focused on non-lodgement of financial reports by large proprietary companies.
ASIC advises companies to proactively review their financial reporting obligations and address any instances of non-compliance before ASIC begins the surveillance. Non-compliance may result in regulatory action, including penalties or legal proceedings.
Local reporting
The Australian Accounting Standards Board (AASB) made several key decisions in ED 335 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities at its August 2025 meeting, including:
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- Investments in associates and joint ventures: When applying the equity method, transaction costs are expensed and the investor is permitted, but not required, to adjust the investee’s financial statements to reflect the investor’s accounting policies. Where an investor elects to measure its investments in associates or joint ventures at fair value through other comprehensive income (FVTOCI), that policy applies to all associates or all joint ventures, respectively.
- Intangible assets: Removed requirement to disclose use of independent valuers for revalued assets.
- Entity combinations: Recognition of entity combinations from the date control is obtained. Donated assets acquired at nominal value may be measured at cost or fair value, with adjustments based on Tier 3 principles.
- Impairment: The Board clarified the requirement for individual asset-level measurement of recoverable amounts, separate disclosure of impairment losses from depreciation, and disclosure of impairment losses for inventory.
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The Board will continue its deliberations at its next meeting.
The AASB has issued AASB 2025-3 Amendments to Australian Accounting Standards – Contracts Referencing Nature-dependent Electricity: Tier 2 Disclosures. AASB 2025-3 introduces targeted disclosure requirements for Tier 2 entities with contracts referencing nature-dependent electricity. The amendments apply to contracts that meet the ‘own use’ exemption and are recognised as procurement contracts under AASB 1060.
When effective, Tier 2 entities will be required to disclose:
- key contractual features exposing them to variability in electricity volumes or timing mismatches between purchase and use;
- qualitative information on how they assess whether such contracts may become onerous; and
- qualitative information on the impact of these contracts on financial performance during the reporting period.
The Standard also provides transitional relief aligned with that available to Tier 1 entities under AASB 2025-1.
AASB 2025-3 is effective for annual periods beginning on or after 1 January 2026, with early adoption permitted. The Standard is available via the AASB Standards Portal.
The AASB has responded to the Financial Reporting Council’s post-implementation review of AASB 1049 Whole of Government and General Government Sector Financial Reporting and AASB 1055 Budgetary Reporting relating to Whole of Government (WoG).
Key actions include developing an Exposure Draft to align AASB 1049 with AASB 18, addressing issues such as dividend cash flow classification, concessionary loans, and the treatment of key fiscal aggregates. The Board will also consult on whether a statement of changes in equity is necessary for WoG and General Government Sector (GGS) reports.
Further updates will reflect changes to the Australian Government Finance Statistics Manual and convergence difference disclosures. Some stakeholder concerns, including fair value guidance and classification of government entities, have been addressed through existing standards or referred to the Australian Bureau of Statistics (ABS).
Other matters, including service concession arrangements, disaggregated disclosures, and equity transfers, will be considered in future reviews of related standards. The Board also plans to consult on potential enhancements to AASB 9 for NFP public sector entities, possibly drawing on IPSAS 41 Financial Instruments.
The AASB has initiated the first phase of its two-phased Agenda Consultation process for the 2027–2031 period. Through a survey and targeted outreach, this phase will collect initial feedback on key reporting challenges and emerging issues relevant to the Board’s work.
The findings from this phase will help shape the development of an Invitation to Comment (ITC), which will offer stakeholders a more focused platform to provide input on specific topics identified.
The survey closes on 17 October 2025.
Regulations
The Australian Charities and Not-for-profits Commission’s (ACNC) Small Charities Library offers practical guidance to help smaller charitable organisations meet their regulatory obligations. Recent updates include enhanced resources on governance, financial reporting, and board responsibilities.
Charities are encouraged to use the self-evaluation tool to assess compliance and identify areas for improvement.
The ACNC also provides templates, webinars, and the National Standard Chart of Accounts to support financial literacy and transparency across the sector.
In addition, the ACNC also released constitution templates for charitable companies limited by guarantee.
The ACNC has released updated guidance to support charities operating within complex structures, helping them navigate common governance challenges.
The guidance outlines key focus areas, including proper record-keeping, board composition, conflicts of interest, and related party transactions. Charities are encouraged to adopt fit-for-purpose policies and ensure that Responsible People understand their roles and obligations across all entities involved.
As part of streamlining the financial reporting obligations of incorporated associations that are also registered charities, annual financial reports prepared in accordance with the ACNC Act will satisfy the financial reporting requirements of each State-based regulator.
As a result, annual financial reports of incorporated associations that are also registered charities should be prepared in accordance with the ACNC Act rather than the relevant State Incorporated Associations Act.
ASIC’s first edition of the Reporting and Audit Update focuses on sustainability and financial reporting matters.
ASIC’s review of a small sample of publicly available, voluntary climate-related disclosures found that while many entities referenced Scope 3 emissions, reporting quality varied. Common issues included repetitive content, unclear risk management disclosures, and limited scenario analysis. Transition plans were often poorly linked to targets and strategies. Regulatory Guide 280 Sustainability reporting (RG 280) provides guidance to entities on preparing a sustainability report and how ASIC will exercise its powers under the law.
The update also highlights ASIC’s actions against misleading sustainability claims, the release of educational materials for preparers, and the launch of a register for sustainability reporting relief decisions.
On financial reporting, ASIC reiterated its focus on asset values, revenue recognition, and provisions. Results of the FY25 surveillance program are expected in October 2025.
ASIC has expanded its investment scam website takedown capability to include social media ads, aiming to disrupt scam operations before they reach consumers.
Recent scam trends include AI-generated trading bots, fake news articles, and cloned websites using chatbot plugins. Despite a 25.9% drop in overall scam losses since 2022, Australians lost $945 million to investment scams in 2024.
ASIC urges vigilance and reminds consumers to verify licence, avoid unsolicited offers, and report suspicious activities via moneysmart.gov.au.
ASIC released a one-off dataset to help AFS licensees verify adviser details on the Financial Advisers Register, including experienced provider declarations and exam dates. Licensees must ensure the accuracy of information on the register and notify ASIC of changes within 30 business days of the change.
The update also covers professional indemnity insurance insights, enforcement actions, and regulatory developments, reinforcing ASIC’s focus on accuracy, compliance, and consumer protection in financial advice.
Sustainability
The International Sustainability Standards Board (ISSB) has clarified how companies should disclose ‘anticipated financial effects’ of sustainability-related risks and opportunities under IFRS S2 Climate-related Disclosures.
These disclosures help investors understand future impacts on an entity’s financial position, performance, and cash flows. While both qualitative and quantitative data are encouraged, ‘permanent’ relief mechanisms allow companies to omit quantitative disclosures if effects are not separately identifiable, or when measurement uncertainty is too high, or when the company does not have the necessary skills, capabilities or resources to provide that quantitative information.
The ISSB has also released new education material to support preparers in applying these requirements.
The AASB, AUASB, and CA ANZ released a joint research report examining climate-related disclosures across the ASX 200. The study shows that climate-related disclosures among Australian listed entities have risen from 48.4% in 2023 to 67.4% in 2024.
Furthermore, entities referencing Australian Sustainability Reporting Standards or IFRS Sustainability Disclosures Standards have increased, along with improvements in scenario analysis and emissions reporting. More entities are integrating climate metrics into executive remuneration and financial statement notes.
Finally, while limited assurance on climate-related disclosures is still the most common, the use of both limited and reasonable assurance increased in 2024.
The Treasury has released draft guidance to support organisations in developing climate-related transition plans.
Aligned with the IFRS Transition Planning Taskforce Disclosure Framework and Australia’s Sustainable Finance Roadmap, the guidance outlines best practices across strategy, implementation, engagement, metrics, and governance. It encourages consideration of adaptation, nature, and social outcomes, including First Nations engagement.
Submissions are open until 24 September 2025, with final guidance expected by the end of 2025.
IFRS Developments
The IASB has issued amendments to IFRS 19 to incorporate amendments to other standards issued between February 2021 and May 2024. Originally issued in May 2024, IFRS 19 allowed eligible subsidiaries to apply full IFRS Standards with reduced disclosures. The amendments take effect up to 1 January 2027, when IFRS 19 will be applicable.
The revised Standard is available via the IFRS Navigator and can be accessed by IFRS Digital account subscribers.
In case you missed it
The AASB issued ITC 55, inviting feedback on the post-implementation review (PIR) of AASB 16, aligning with the IASB’s concurrent review of IFRS 16. The PIR aims to assess whether the Standard is achieving its intended objectives, particularly in improving transparency around lease arrangements.
ITC 55 is structured into three sections: general matters for all stakeholders, sector-specific issues for not-for-profit and public sector entities, and the IASB’s Request for Information.
The AASB is particularly interested in whether AASB 16 has enhanced comparability and decision-usefulness of financial statements, and whether any implementation challenges persist.
Submissions to the AASB close on 5 September 2025 but can be made to the IASB until 15 October 2025.