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 Charities and Not-for-profits Commission (ACNC) has extended the long-running transitional reporting arrangements for certain charities through to 2029 financial year. Under these arrangements, the ACNC will accept financial reports submitted to other government agencies – such as non-government schools reporting to the federal Department of Education, charities registered with the Office of the Registrar of Indigenous Corporations, and co-operatives in each state and territory – in place of the reporting requirements in the ACNC Act 2012.
The extension aims to reduce duplicated reporting and ease regulatory burden, particularly for charities with limited resources. This complements the existing streamlined arrangements for ancillary funds, incorporated associations, and fundraisers.
Charities are encouraged to review their eligibility and ensure compliance with obligations to their primary regulator.
Local reporting
The Australian Accounting Standards Board (AASB) made the following decisions at its October 2025 Board meeting:
- Remove the restriction that transitional relief under Tier 2 Simplified Disclosures only applies to early adopters of the relevant Amending Standard. All other proposed amendments to AASB 1053, as outlined in ED 334 Limiting the Ability of Not-for-Profit Entities to Prepare Special Purpose Financial Statements, will be finalised.
- Subject to some exceptions, finalise the following sections of the proposed Tier 3 framework for NFP private sector entities: financial instruments, revenue recognition, related party disclosures, and transition guidelines.
At its October 2025 meeting, the AASB approved the publication of the Exposure Draft Operating Cash Flow Reconciliation and Application of AASB 18 and AASB 107 by Superannuation and Not-for-Profit Entities.
Key proposed amendments 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.
The Exposure Draft is expected to be published shortly, with a 120-day comment period.
In response to the International Accounting Standards Board’s (IASB) Request for Information, the AASB decided at its October 2025 meeting to raise concerns about whether IFRS 16’s objectives have been fully achieved, citing high compliance costs, reduced comparability, and ongoing reliance on pre-IFRS 16 metrics.
The AASB recommended targeted improvements, including clarifying lease option reassessments, removing the requirement to use the interest rate implicit in leases, and simplifying the accounting for variable lease payments. Additional guidance was also suggested for sale and leaseback transactions and the unit-of-account concept.
At its October 2025 meeting, the AASB received an update on proposed amendments to IFRS S2 and AASB S2 Climate-related Disclosures relating to greenhouse gas emissions reporting. The discussion included a summary of Australian stakeholder feedback on Exposure Draft SR2 Amendments to Greenhouse Gas Emissions Disclosures – Proposed amendments to AASB S2, along with monitoring of the International Sustainability Standards Board’s (ISSB) related deliberations.
Further discussions are expected at the Board’s November 2025 meeting.
The AASB has released updated staff FAQs to assist local governments in applying depreciation requirements under AASB 116 Property, Plant and Equipment. The guidance addresses common misconceptions and promotes consistency in practice.
Key clarifications include the need to reassess useful lives and residual values annually, apply componentisation for complex assets (e.g., splitting assets into parts with distinct useful lives), and ensure depreciation reflects the economic substance of asset use, rather than funding cycles.
The AASB also reminds preparers that depreciation is not optional and must be applied consistently, even when assets are revalued. Revaluation does not automatically reset useful life unless the asset’s condition or usage changes.
The AASB has published its Feedback Statement on ITC 51, summarising stakeholder views on the effectiveness of current standards for NFP entities.
Overall, respondents supported the existing requirements in AASB 10 Consolidated Financial Statements, AASB 12 Disclosure of Interests in Other Entities, and AASB 124 Related Party Disclosures, noting they are generally fit for purpose.
Key concerns included the complexity of assessing control, especially in informal arrangements, and the limited relevance of some related party disclosures. However, the Board concluded that no standard-level changes are needed at this stage. Instead, the AASB will consider developing additional guidance or illustrative examples to support preparers, particularly around structured entities and control assessments.
The feedback also highlighted the importance of ongoing education and outreach to improve consistency in application.
Regulations
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.
The ACNC has released an updated Commissioner’s Interpretation Statement on Public Benevolent Institutions (PBIs), effective 29 September 2025.
The updated guidance reflects recent legal developments and sector feedback. It clarifies how the ACNC assesses PBI eligibility, focusing on benevolent purpose, public benefit, and institutional structure.
The statement includes practical examples and addresses advocacy, commercial activities, and relief delivery. As “Public Benevolent Institution” is not defined in legislation, this interpretation is critical for access to tax concessions. Charities seeking PBI status are encouraged to review the statement and seek professional advice where needed.
The Australian Securities and Investments Commission (ASIC) has raised concerns following a review into offshore outsourcing practices by responsible entities (REs) of managed investment schemes. Covering 30 REs managing nearly $191 billion in assets, the review found governance gaps in areas such as cyber security, due diligence, and oversight of offshore service providers.
ASIC reminded REs that outsourcing does not absolve them of responsibility. Licensees are expected to retain the capability to assess and monitor outsourced functions effectively. Risks identified include loss of control, data breaches, and conflicting foreign laws. The Regulator urged REs to strengthen governance frameworks and align practices with Regulatory Guides 104 and 259.
ASIC will continue to monitor outsourcing arrangements and expects REs to ensure investor interests are protected.
ASIC issued a warning about scammers impersonating Moneysmart website, using fake branding and misleading claims to promote fraudulent investment schemes.
ASIC stresses that legitimate Moneysmart content is only available at moneysmart.gov.au and urges the public to verify URLs before engaging with financial content online. ASIC recommends reporting suspicious activity to Scamwatch and avoiding links from unsolicited emails or social media ads.
Sustainability
Chartered Accountants ANZ (CA ANZ), in collaboration with the Australian Small Business and Family Enterprise Ombudsman, released a guide to help small and medium enterprises (SMEs) navigate Australia’s evolving climate-related financial disclosure landscape.
While SMEs are not directly subject to mandatory reporting under the Corporations Act, they are increasingly being asked to supply greenhouse gas (GHG) emissions data to larger entities and government bodies. This is particularly relevant for businesses in high-emission sectors such as transport, agriculture and manufacturing.
The guide highlights how early engagement with sustainability reporting can offer SMEs a competitive edge especially in procurement processes and stakeholder communications. SMEs are encouraged to familiarise themselves with GHG concepts and begin tracking emissions data to support supply chain transparency.
The International Sustainability Standards Board (ISSB) met on 28 October 2025 to progress several key sustainability reporting initiatives, including:
- Targeted amendments to IFRS S2 – Greenhouse gas emissions disclosures: The Board finalised amendments to IFRS S2 to simplify disclosure requirements for financed emissions. The amendments are expected to be issued by the end of 2025.
- Biodiversity, ecosystems and ecosystem services: The ISSB advanced its nature-related research, assessing whether standard-setting is feasible and necessary. The Taskforce on Nature-related Financial Disclosures (TNFD) framework is being considered as part of this evaluation.
- Human capital research project: Work continued on consolidating findings and developing an analytical framework to assess the need for disclosure standards or educational materials related to human capital. A more detailed proposal is expected later in Q4 2025.
The ISSB Update is yet to be available on the IFRS website.
IFRS developments
The IASB’s October 2025 meeting covered several key projects, including:
- Statement of Cash Flows and Related Matters: The Board discussed improvements to IAS 7, focusing on enhancing transparency around non-cash transactions and refining disclosure requirements to better reflect cash flow classifications.
- Equity method: The Board continued deliberations on refining the application of the equity method in accounting for investments in associates and joint ventures.
- Provisions – Targeted improvements (IAS 37): The Board discussed targeted amendments to IAS 37, including clearer guidance on measuring provisions and recognising liabilities, particularly in complex legal and environmental contexts.
- Business combinations – Disclosures, Goodwill and Impairment: The Board continued to deliberate feedback on the exposure draft.
- Rate-regulated activities: Discussions continued on the proposed standard for entities subject to rate regulation, focusing on recognition and measurement principles that reflect the economic effects of regulatory agreements.
The IASB Update is available on the IFRS website.
In case you missed it
In September 2025 the AASB issued an Invitation to Comment (ITC) 56 to seek stakeholder views on the future of Tier 2 reporting. ITC 56 is open for comment until 22 January 2026.
Key topics covered in ITC 56:
- AASB 1060 Review – The main focus is to assess the effectiveness of the existing simplified disclosure requirements for Tier 2 entities
- User needs versus preparer costs – The consultation asks if the current Tier 2 framework effectively balances the cost of preparing financial reports with the information needs of users
- Updates to Standards – The AASB also seeks input on the potential effects of the following Standards on AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities:
- IFRS for SMEs Accounting Standard (Third Edition)
- AASB 18 Presentation and Disclosure in Financial Statements
- IFRS 19 Subsidiaries without Public Accountability.
AASB 1060 will either be updated or replaced in response to the feedback received.