Welcome to “Beyond the numbers“, our monthly newsletter that provides you a summary of the latest developments from domestic and global standard-setting bodies and regulatory authorities.
Top story
Nexia Australia has released its illustrative financial report for independent schools for the financial year ending 31 December 2026.
The publication is a Tier 2 general purpose financial report prepared in accordance with AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities and reporting under the Australian Charities and Not-for-profits Commission Act 2012.
The 2026 edition incorporates new and amended accounting standards and other pronouncements applicable for the first time for 31 December 2026 balance dates.
The illustrative report is available on our website.
Local reporting
The Australian Accounting Standards Board (AASB) issued AASB 2026-4 Amendments to Australian Accounting Standards – Application of AASB 18 and AASB 107 by Superannuation and Not-for-Profit Entities and Operating Cash Flow Reconciliation, which provides targeted relief for superannuation and not-for-profit (NFP) entities applying AASB 18 and related amendments to AASB 107 Statement of Cash Flows.
The reliefs apply to superannuation and NFP entities preparing Tier 1 general purpose financial statements. Most of the NFP relief is aimed at public sector entities that are not higher education providers.
The amendments also clarify operating cash flow information under the indirect method.
The amendments apply for annual reporting periods beginning on or after 1 January 2028. Some related amendments to AASB 1039 and AASB 1054 apply to for-profit entities (other than superannuation entities) from 1 January 2027. Early application is permitted.
The AASB has released Parts 3 and 4 of its webcast series supporting implementation of AASB 1061 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities, completing the four-part series:
- Parts 1 and 2 provided an overview of the standard and the financial statements.
- Part 3 covers Sections 8 to 16 of AASB 1061, including consolidated and separate financial statements, inventories and non-financial assets.
- Part 4 covers Sections 17 to 28, including leases, revenue and transition to Tier 3.
All four webcasts are available through the AASB 1061 Knowledge Hub, alongside other implementation resources. These materials may be useful for those advising smaller not-for-profits as they consider the Tier 3 requirements and the transition from existing reporting arrangements.
Regulations
The Australian Securities and Investments Commission (ASIC) has consolidated 17 financial reporting, sustainability reporting and auditing relief instruments into two new instruments
- ASIC Corporations (Annual and Half-year Reporting) Instrument 2026/468 brings together 14 instruments covering annual and half-year reporting obligations for companies, registered schemes, registrable superannuation entities, retail CCIVs and disclosing entities.
This includes relief relating to rounding, post-balance-date disclosures, presenting parent entity financial statements, small foreign-controlled proprietary companies and stapled groups. - ASIC Corporations (Auditing) Instrument 2026/469 consolidates the audit relief for large proprietary companies and small foreign-controlled proprietary companies, auditor independence declarations and CCIV auditor notification requirements.
The Instruments are effective immediately, with transitional arrangements applying to ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183 and ASIC Corporations (Wholly owned Companies) Instrument 2016/785 for financial years and half-years ending before 1 January 2027.
Consolidation of the previous Instruments do not include any substantive changes to those Instruments but is intended to make the relief easier to find and apply.
The financial reporting and audit relief contained in the Instruments do not extend to a company’s sustainability report.
For preparers and auditors, the main effect of the change is to update templates, checklists and other documents that refer to the superseded instruments.
The Australian Charities and Not-for-profits Commission (ACNC) added four de-identified registration decision summaries to its library, covering safeguarding, advancing public debate, backdated registration and commercial activities.
The commercial activities decision confirms that running a commercial business does not, by itself, prevent registration, provided profits support the organisation’s charitable work. The commercial activity also does not need to relate directly to its charitable purpose.
Another decision notes that organisations do not need to use the specific language of the Charities Act in their governing documents. The ACNC will consider an organisation’s purposes as a whole, including where more inclusive or strengths-based wording is used.
The summaries are available through the ACNC website.
On 18 September, Treasury released the exposure draft External Reporting Australia (Standard-setting Boards) Instrument 2026, setting out how standard-setting will operate when the FRC, AASB and AUASB come together as External Reporting Australia (ERA) from 1 December 2026.
The proposed structure includes three boards covering accounting, auditing and assurance, and sustainability standards, with a standalone Australian Sustainability Standards Board to be established for the first time. Each board will continue to contribute to international standard-setting, while ERA’s Governing Council will oversee strategic international engagement and provide policy advice to the Minister.
The boards will also be required to publish agendas, meeting papers and minutes, except for closed sessions, and to consult publicly on proposed standards and consider their regulatory impacts.
Written submissions on the exposure draft close on 15 October 2026.
The Accounting Professional & Ethical Standards Board (APESB) issued APES 206 Conformity with Sustainability Reporting Standards.
The standard sets out members’ professional and ethical obligations when preparing, presenting or compiling sustainability information, or performing sustainability assurance engagements, for private and public sector entities.
APES 206 follows a similar structure to APES 205 Conformity with Accounting Standards for financial statements. It requires members to take reasonable steps to ensure sustainability information conforms with the applicable reporting framework, while emphasising the fundamental responsibilities of acting in the public interest and exercising professional competence and due care.
The standard includes requirements covering the Australian Sustainability Reporting Standards, sustainability information prepared under a general purpose framework, and sustainability information more generally. It applies to engagements from 1 January 2027, with early adoption permitted.
ASIC released Consultation Paper 391 seeking feedback on what information on the companies register should be made available in the future, and who should have access.
ASIC is proposing to make more information available for free, including officeholders’ names and status (current or ceased), director ID numbers and whether a director has confirmed their director ID.
Comments close on 12 October 2026.
Sustainability
ASIC released Report 839 ASIC’s review of sustainability reports lodged for 31 December 2025 on 21 September, providing its first detailed observations on sustainability reporting under Australia’s mandatory climate reporting regime. ASIC reviewed 40 reports from the 312 lodged by Group 1 entities with 31 December 2025 year ends, covering both listed and unlisted entities.
Overall, ASIC observed improvements in the quality, quantity and consistency of climate-related financial information compared with previous voluntary reporting. It also saw examples of entities updating their governance and risk management processes in response to the new requirements.
ASIC has set out a number of action items, including:
- better links between sustainability and financial reports,
- greater use of quantitative information when disclosing the financial effects of climate-related risks and opportunities,
- clearer disclosure of materiality judgements and measurement uncertainty, and
- avoiding inappropriate disclaimers.
Reporting entities were also reminded that in determining whether an entity has a climate-related target, the definition of ‘climate-related targets’ in AASB S2 extends to targets that the entity is required to meet by law or regulation. This includes greenhouse gas emissions targets such as the Safeguard Mechanism.
ASIC noted that 82.5% of the entities reviewed used the transition relief from reporting Scope 3 GHG emissions in their first-year reporting.
International Financial Reporting Standards (IFRS) developments
The International Accounting Standards Board (IASB) has concluded its technical discussions on the Equity Method project, paving the way for a revised IAS 28 Investments in Associates and Joint Ventures.
The project aims to address a range of application issues that have resulted in diversity in practice, rather than fundamentally changing the purpose of the equity method.
One of the key outcomes is an expected accounting policy choice for recognising gains and losses on transactions with associates. Entities will be able to choose between full recognition or restricted recognition for most transactions, although gains and losses on transfers of businesses will always be recognised in full. Entities will need to disclose their policy choice, with additional disclosure requirements depending on the policy selected.
The IASB has also agreed to withdraw the 2014 amendments on the sale or contribution of assets between an investor and its associate or joint venture, resolving a longstanding inconsistency between IAS 28 and IFRS 10.
The revised standard expected in the first half of 2027 with a mandatory application date for financial years commencing on or after 1 January 2029. Early application will be permitted.
The IASB published a Request for Information as the final stage of its post-implementation review of IFRS 9, focusing on the hedge accounting requirements in IFRS 9 and related disclosures in IFRS 7. Earlier phases of the review considered classification and measurement and impairment, completed in 2022 and 2024 respectively.
The IASB is seeking feedback on whether the requirements are achieving their intended objectives, the costs of applying and enforcing them, and whether users are receiving the expected benefits. Feedback from earlier outreach was generally positive, with most stakeholders indicating that the hedge accounting requirements are working as intended and provide better alignment between accounting and risk management than IAS 39. The IASB also noted some areas of ongoing judgement and cost, including assessing whether forecast transactions are highly probable and determining whether an economic relationship exists.
Comments on the Request for Information are open until 26 January 2027. The AASB is expected to undertake a corresponding local consultation.
The IFRS Interpretations Committee (IFRIC) met on 15–16 September and published three tentative agenda decisions, all open for comment until 30 November 2026.
The tentative decisions cover:
- IFRS 18: The Committee considers that debt and equity investments will typically generate a return individually and largely independently of an entity’s other resources. Related income and expenses will therefore generally be presented in the investing category. Debt instruments arising from supplying goods or services, such as trade receivables, typically would not meet the test.
- IAS 16: The Committee considered how to determine the residual value of property, plant and equipment. The question came from a car manufacturer that leases vehicles for three years before selling them. The Committee noted that residual value is based on what the asset could currently be sold for, assuming it were already at the age and condition expected at the end of its useful life. Future developments are considered only where they already affect current prices.
- Equity investments: The Committee also considered the accounting for differences between fair value and proceeds received when an equity investment designated at fair value through other comprehensive income (FVOCI) is sold. Feedback suggests that the difference is generally recognised in other comprehensive income.
All three tentative agenda decisions are open for comment until 30 November 2026.
In addition, the Committee finalised its decision on whether changes to an investee’s governing document require an investor to reassess control under IFRS 10. The decision has been referred to the IASB for confirmation at a future meeting.
In case you missed it
Nexia Australia released a guide to AASB 18 Presentation and Disclosure in Financial Statements, the new Australian Accounting Standard replacing AASB 101 Presentation of Financial Statements.
The guide explains how AASB 18 will affect the format and classification of line items in the statement of profit and loss, the aggregation, disaggregation and labelling of line items in the financial statements and the introduction of disclosures for management-defined performance measures.
AASB 18 applies to for-profit entities for annual periods beginning on or after 1 January 2027 and to not-for-profit entities and superannuation entities applying AASB 1056 for annual periods beginning on or after 1 January 2028.
