Welcome to Beyond the numbers, our monthly newsletter which brings you a summary of the latest developments from domestic and global standard-setting bodies and regulatory authorities.
Top story
The Australian Accounting Standards Board (AASB) issued:
- AASB 2026-2 Extending the Application of the Conceptual Framework and Limiting the Ability of Not-For-Profit Entities to Prepare Special Purpose Financial Statements; and
- AASB 1061 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities.
AASB 2026-2 requires both private sector and public sector not-for-profit entities to prepare general purpose financial statements if they:
- are required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards; or
- are required only by their constituting document or another document to prepare financial statements that comply with Australian Accounting Standards, and where that document was created and last amended after 1 July 2029.
AASB 1061 introduces a Tier 3 reporting framework designed to reduce the reporting burden for smaller NFP entities by focusing on the information most relevant to users of their financial statements. Key simplifications compared to Tier 1 or Tier 2 include:
- keeping leases off balance sheet for lessees;
- optional, rather than mandatory, consolidation;
- simplified accounting for revenue, financial instruments, employee benefits and impairment; and
- reduced related party disclosure requirements.
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Both Standards apply to annual reporting periods beginning on or after 1 July 2029, with early application permitted.
Eligibility to apply the Tier 3 framework will be determined by each relevant not-for-profit regulator, which is not expected before 2027.
Further guidance is available in the AASB 1061 Knowledge Hub.
Local reporting
In late June 2026, the AASB released Exposure Draft ED 341 Updating AASB 1060 to Align the Classification and Presentation Requirements with AASB 18. The ED proposes amendments to AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For‑Profit and Not‑for‑Profit Tier 2 Entities so that its classification and presentation requirements mirror those in AASB 18 Presentation and Disclosure in Financial Statements.
The proposals respond to stakeholder feedback supporting closer alignment between Tier 2 and Tier 1 reporting, including the ability for Tier 2 entities to adopt the new AASB 18 income statement presentation. Key proposed amendments include:
- new classification and presentation requirements for income and expenses, including the defined subtotals introduced by AASB 18; and
- updated guidance on the aggregation and disaggregation of line items.
The proposed amendments would apply to annual reporting periods beginning on or after 1 July 2030, with early application permitted.
The Exposure Draft is open for comment until 24 August 2026. The AASB will also host a virtual roundtable on 23 July 2026 for stakeholders to provide feedback on the proposals.
At its 18–19 June 2026 meeting, the AASB continued deliberations on Exposure Draft ED 338 Application of AASB 18 and AASB 107 by Superannuation and Not‑for‑Profit Entities and Operating Cash Flow Reconciliation and decided to proceed with its key proposals. The Board confirmed it will:
- amend AASB 1054 and AASB 1039 so the operating cash flow reconciliation starts from the “operating profit or loss” subtotal, aligning with AASB 107;
- add NFP‑specific guidance to AASB 18 on users of NFP general purpose financial statements;
- make editorial updates to AASB 1049; and
- retain the existing AASB 18 effective date — annual reporting periods beginning on or after 1 January 2028, with early application permitted.
The Board also agreed sweep clarifications, including that the AASB 18 policy elections apply to all NFP public sector entities except universities. A draft amending Standard will be considered at the next meeting.
The AASB met on 18–19 June 2026 to consider a range of financial reporting and sustainability matters.
In addition to releasing Exposure Drafts ED 338 and ED 341, the Board continued its deliberations on feedback received in response to Invitation to Comment ITC 57 AASB 2027–2031 Agenda Consultation and the post-implementation review of AASB 1060 and AASB 2020-2 Amendments to Australian Accounting Standards – Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities.
The Board also discussed sustainability reporting matters and received an update on climate-related financial disclosures research.
The Board will continue its deliberations on these matters at a future meeting.
Regulations
The Australian Government’s mandatory “Tranche 2” obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF) affecting professional services providers including accountants and advisors is now in force.
From 1 July 2026, accountants and advisors providing designated services to clients are required to conduct customer due diligence (CDD), which includes verifying the identity of clients and, where applicable, individuals who own or control entities. The regime also requires service providers to report suspicious matters to the Australian Transaction Reports and Analysis Centre (AUSTRAC).
Information on how these changes may affect Nexia clients can be found on our website.
Legislation to merge the Financial Reporting Council, the Australian Accounting Standards Board and the Auditing and Assurance Standards Board into a single entity to be known as External Reporting Australia passed both houses of parliament on 30 June 2026.
The Governing Council of External Reporting Australia (ERA) will establish separate boards to develop and issue accounting standards, sustainability standards and assurance standards. The activities of the existing AASB and AUASB will continue until the new boards are formed later this year.
Current and former partners in large accounting and audit firms and directors, secretary or senior managers of large authorised audit companies are prohibited from being a Council member of ERA.
On 1 June 2026, the Australian Securities and Investments Commission (ASIC) opened consultation on a proposal to streamline 17 financial reporting and auditing relief instruments into just two, as part of its ongoing regulatory simplification agenda.
The two draft consolidated instruments are the ASIC Corporations (Annual and Half‑year Reporting) Instrument 2026/XXX and the ASIC Corporations (Auditing) Instrument 2026/XXX. The Financial Reporting Instrument will absorb a wide range of existing reliefs covering stapled entities, parent entity financial statements, foreign‑controlled companies, rounding, disclosing entities, synchronisation of financial years, directors’ report relief, electronic lodgement, post balance date reporting, and non‑reporting entities.
The Auditing Instrument will consolidate the Corporate Collective Investment Vehicle (CCIV) auditors, auditor independence and audit relief instruments, with some requirements in Instrument 2016/784 removed. The aim is to make available relief easier to navigate, reduce duplication and clarify eligibility.
Submissions close 5pm AEST on 10 July 2026.
From 1 July 2026, ASIC increased its fees in line with an increase in the Consumer Price Index (CPI) for the March quarter.
The increase affects fees for the registration of new companies, annual review fees, business name registrations and a range of other fees.
From 1 July 2027, new laws will require companies to provide director identification numbers (director ID) to ASIC.
Companies will need to provide director IDs to ASIC through company reporting processes, including the annual review or when notifying changes to directors’ details.
Over time, the companies register will display whether a company has provided director IDs for its directors.
The changes will:
- reduce the risk of fraud and identity misuse
- improve the accuracy of company records
- make it easier to identify company directors
- improve the quality and usability of registry information.
ASIC will provide further information and guidance on the new requirements before 1 July 2027.
ASIC announced that email lodgement is now enabled for 97% of its paper‑based forms, building on earlier 2025 and March 2026 releases that took coverage to around 70%.
The latest June release added a further 42 forms (including sub‑forms), representing more than 32,000 annual lodgements. Newly enabled forms cover common interactions such as company reinstatements, corrections not available online, appointing a contact address, foreign company accounts, court orders, and notices of resolution. ASIC’s complete list of email‑enabled forms can be found at the ASIC’s website.
ASIC also continues to accept electronic signatures on approved PDF forms, with postal lodgement remaining available for those who prefer it.
The Australian Charities and Not-for-profits Commission (ACNC) welcomed funding announced in the 2026 Federal Budget to streamline data sharing with ASIC. The initiative will automate the transfer of key charity information, including Responsible People details, to keep ASIC’s Companies Register up to date.
The measure is intended to reduce reporting duplication, improve data accuracy and ease the administrative burden for more than 15,000 incorporated charities.
Data sharing is expected to commence by 1 July 2027.
The ACNC has released a webinar outlining the ongoing obligations charities must meet to maintain registration. The session covers key requirements, including notifying the ACNC of changes, maintaining records, lodging the Annual Information Statement, and complying with the Governance Standards and, where applicable, the External Conduct Standards. It also provides guidance on using the Charity Portal and explains how the ACNC works with other regulators to reduce reporting duplication.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) released its updated Terrorism financing risks in Australia’s non-profit organisation (NPO) sector assessment, refreshing the threats, vulnerabilities and suspicious activity indicators relevant to charities and the financial institutions that bank them.
AUSTRAC assessed the overall risk as stable and limited but concentrated in a small subset of organisations linked to specific activities, structures or operating environments – particularly those active in conflict zones or moving funds internationally. Notable shifts include:
- higher-risk NPOs are increasingly small to medium-sized incorporated entities or Australian public companies;
- inbound International Financial Transaction Instructions (IFTIs) are no longer a key indicator in detected cases; and
- many higher-risk NPOs now have longer histories of legitimate activity, challenging the assumption that newer organisations are inherently riskier.
NSW Treasury issued TPG26-10 Mandatory Annual Returns setting out requirements for the submission of 2025–26 annual returns by NSW Government-controlled entities. The policy applies across the general government sector, public financial and non-financial corporations, state owned corporations and other Government Sector Finance Act 2018 agencies. The returns support preparation of consolidated whole-of-government reporting, including the Total State Sector Accounts and related external reporting.
Sustainability
Chartered Accountants Australia and New Zealand (CA ANZ) released a series of practical information guides to support the implementation of mandatory climate-related financial disclosures under AASB S2 Climate-related Disclosures. The guides provide practical support on topics including materiality, Scope 3 emissions, scenario analysis, transition planning and SME reporting, as entities move through the phased rollout of Australia’s climate reporting regime.
In its Q2 2026 Implementation Insights podcast (25 June 2026), the International Sustainability Standards Board (ISSB) provided further guidance on key implementation considerations for entities applying IFRS S1 and IFRS S2.
The podcast focused on three main areas. First, it explained how entities should approach climate resilience and scenario analysis under IFRS S2, including how proportionality mechanisms allow analysis to be scaled to an entity’s circumstances. Then, it addressed disclosure requirements for biogenic emissions, drawing on discussions from the March 2026 Transition Implementation Group meeting. Finally, it considered how evolving developments in the Greenhouse Gas Protocol interact with ISSB reporting requirements.
The ISSB also encouraged stakeholders to continue engaging through the Transition Implementation Group by submitting further implementation questions.
At the IFRS Foundation Conference on 29 June 2026, ISSB Vice-Chair Sue Lloyd outlined the ISSB’s forthcoming nature-related disclosure proposals, with an Exposure Draft expected in October 2026.
The proposals will take the form of an IFRS Practice Statement, providing guidance to help entities apply IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures when reporting nature-related information. The Practice Statement will be voluntary unless adopted by individual jurisdictions and will build on the framework developed by the Taskforce on Nature-related Financial Disclosures (TNFD), including its Locate, Evaluate, Assess, Prepare (LEAP) approach and the use of scenario analysis.
The ISSB noted that issuing a Practice Statement, rather than a Standard, is intended to support implementation of IFRS S1 and IFRS S2 without introducing additional mandatory requirements, while allowing flexibility for future standard-setting.
IFRS Developments
The International Accounting Standards Board (IASB) issued IFRS 20 Regulatory Assets and Regulatory Liabilities, addressing a long-standing reporting gap for companies subject to rate regulation – most commonly suppliers of electricity, water and gas.
Rate regulation dictates both how much a company can charge customers and when it can charge them; where there is a mismatch between the period in which goods or services are supplied and the period in which they are recovered through regulated rates, IFRS 15 Revenue from Contracts with Customers alone may not fully reflect performance. IFRS 20 calls this a “difference in timing” and requires entities to recognise the resulting regulatory assets, liabilities, income and expense.
IFRS 20 supersedes IFRS 14 Regulatory Deferral Accounts and is effective for annual reporting periods beginning on or after 1 January 2029, with earlier application permitted.
A preparatory webinar can be accessed via the IFRS Foundation website and YouTube channel.
The IFRS Foundation published the 14th Compilation of Agenda Decisions issued by the IFRS Interpretations Committee (IFRIC), covering the period November 2025 to April 2026. Agenda decisions explain how existing IFRS Accounting Standards apply to specific fact patterns and are expected to be considered by preparers when applying IFRS requirements.
Volume 14 includes eight new agenda decisions, with a significant focus on the recently issued IFRS 18 Presentation and Disclosure in Financial Statements (effective 1 January 2027). These address matters including classification and disclosure of income and expenses, foreign exchange differences on intragroup monetary items, derivative gains and losses, and specified main business activities in separate financial statements.
Additional agenda decisions relate to IFRS 9 Financial Instruments (including embedded prepayment features and transaction costs), IFRS 16 Leases (battery offtake arrangements), and IAS 1 Presentation of Financial Statements.
Six earlier agenda decisions have also been updated to reflect IFRS 18.
At its June 2026 meeting, the IASB discussed projects including:
- Post-implementation review of IFRS 16 Leases: The IASB tentatively decided to develop narrow-scope amendments to clarify the interaction between IFRS 16 and IFRS 9 Financial Instruments for certain rent concessions. The Board decided no further action is required on several other topics identified during the post-implementation review.
- Amortised cost measurement: The Board tentatively decided to clarify how entities determine whether a modification of a financial asset or financial liability is substantial under IFRS 9. The proposed approach would require consideration of both qualitative and quantitative factors, with the existing 10% test serving as a supporting indicator rather than the sole determinant. Deliberations will continue.
- Equity accounting: The Board confirmed proposals allowing entities to choose how gains and losses are recognised when applying the equity method in separate financial statements, confirmed related disclosure requirements, and withdrew earlier proposals on accounting when control is obtained or lost while the equity method continues to apply.
- Statement of Cashflows and related matters: The Board’s discussion focused on classification of cash flows from derivatives and government grants. The Board tentatively decided that certain derivative cash flows should follow the classification of the underlying hedged item, while clarifying that government grants are generally classified as operating or investing activities depending on their nature.
A podcast episode summarising the highlights of this meeting is available on the IFRS Foundation’s website.
The IASB has issued targeted amendments to clarify which investments in associates and joint ventures a company is eligible to measure using the fair value option in IAS 28 Investments in Associates and Joint Ventures.
The amendments clarify that entities that have a main business activity of investing in particular types of assets for the purpose of IFRS 18 Presentation and Disclosure in Financial Statement are permitted to utilise the fair value option.
An entity applies these amendments when it applies IFRS 18.
In case you missed it
ASIC has released its focus areas for FY2026–2027, covering financial reporting, sustainability reporting and assurance.
- Financial reporting
ASIC’s enduring financial reporting focus areas remain largely unchanged from 31 December 2025 and continue to focus on areas requiring significant judgement by preparers. These include asset values and impairment, revenue recognition, adequacy of provisions.}As part of its focus on provisions, ASIC will also review disclosures relating to decommissioning and site restoration provisions against illustrative example D of AASB 137 Provisions, Contingent Liabilities and Contingent Assets. The illustrative example demonstrates how an entity might disclose information about plant decommissioning and site restoration obligations.
The regulator also continues to focus on the sufficiency and appropriateness of disclosures and presentation in financial reports, including disclosures in the Operating and Financial Review (OFR), and subsequent events.
Finally, ASIC reiterated its focus on non-lodgment of financial report by large proprietary companies.
- Sustainability reporting
ASIC is progressing its review of 31 December 2025 sustainability reports and will continue surveillance activities as part of its FY2026–2027 program.The regulator has released its initial observations from the 259 sustainability reports lodged for the financial year ending 31 December 2025. Refer to “ASIC’s early observations on sustainability reporting” section below.
ASIC stated it will adopt a proportionate and pragmatic approach to supervision and enforcement as sustainability reporting requirements are phased in, while continuing to support implementation through guidance, FAQs, relief measures and educational materials.
