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
Treasury is consulting on ways to reduce the compliance burden associated with Australia’s mandatory climate-related financial disclosures, while maintaining the quality, credibility and international comparability of reporting.
Treasury is seeking views on three areas:
- Whether limited assurance should remain the mandatory requirement rather than moving to reasonable assurance across all disclosures by 2030. An alternative would be to delay the transition to reasonable assurance until 2035, recognising the current capability of the market and the maturity of climate-related data.
- The need to provide clearer guidance on key concepts such as the practical application of proportionality mechanisms in AASB S2 – “reasonable and supportable information … without undue cost or effort” and “commensurate with the skills, capabilities and resources that are available to the entity”.
- Ways to reduce the burden on smaller suppliers responding to Scope 3 emissions data requests, whether through greater use of published emissions factors or other mechanisms.
Submissions close on 2 October 2026.
Local reporting
Nexia has 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.
The Australian Accounting Standards Board (AASB) has issued AASB 2026-3 Amendments to Australian Accounting Standards – Fair Value Option for Investments in Associates and Joint Ventures. The amendments clarify which entities can measure investments in associates and joint ventures at fair value through profit or loss under AASB 9 Financial Instruments, rather than applying the equity method under AASB 128 Investments in Associates and Joint Ventures.
In particular, AASB 2026-3 clarifies the meaning of a “similar entity” to venture capital organisations, mutual funds and unit trusts which are permitted to use the fair value option under AASB 128. The amendments confirm that “similar entities” include entities whose main business activity is investing in particular types of assets, as described in paragraph 49(a) of AASB 18 Presentation and Disclosure in Financial Statements.
The amendments follow the IASB’s amendments to IAS 28 issued in June 2026.
AASB 2026-3 applies to annual reporting periods beginning on or after 1 January 2027 for for-profit entities. For not-for-profit and superannuation entities, the amendments apply from 1 January 2028. Early application is permitted.
The AASB has released the first two parts of a four-part webcast series to support the implementation of AASB 1061 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities. The series provides practical guidance for preparers and other stakeholders. Part 1 provides an overview of the new Tier 3 Standard, while Part 2 focuses on the financial statements. The remaining webcasts will cover key accounting areas, including recognition, measurement and disclosure requirements.
AASB 1061 applies to annual reporting periods beginning on or after 1 July 2029, giving entities time to understand the new requirements and for relevant State and Federal regulators to determine which entities can apply AASB 1061.
The webcasts and other implementation resources are available through the AASB 1061 Knowledge Hub on the AASB website.
The AASB approved 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 specific reliefs 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 the cash flow reconciliation under the indirect method. Entities will reconcile cash flows from operating activities to the operating profit or loss subtotal under AASB 18, or to total profit or loss where that subtotal is not presented (where the entity is a superannuation entity or an NFP public sector entity that is not a higher education provider).
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.
At its August 2026 Board meeting, the AASB considered how not-for-profit (NFP) entities should apply AASB 18 when categorising certain income and expenses in the statement of profit or loss.
The Board agreed to develop an Exposure Draft proposing mandatory application guidance for Tier 1 and Tier 2 NFP entities. The guidance would be included in a new Australian Appendix to AASB 18.
Among other things, the proposed guidance would clarify that:
- The existence of separate budgets, forecasts or performance reports for investing or financing activities may indicate that these activities are a main business activity.
- Income from the initial recognition of donated assets and the unwinding of deferred income relating to capital grants under AASB 1058 is included in the operating category.
- Investment income from donated financial assets would generally be included in the investing category, unless investing is a main business activity.
The guidance would include examples of cases in which an NFP entity may have a specified main business activity and also clarify that the operating, investing and financing categories in AASB 18 are not intended to align with those in AASB 107.
The Board expects to consider a draft Exposure Draft in October 2026.
The AASB decided to retain the existing accounting policy choice for NFP public sector lessees when initially measuring right-of-use (ROU) assets arising from concessionary leases, such as leases where rent is significantly below market value. Under AASB 16 Leases, these ROU assets can continue to be measured initially at either cost or fair value. The choice can be applied on an ongoing basis, bringing NFP public sector entities into line with NFP private sector entities.
The Board considered stakeholder feedback, including the practical difficulties and costs associated with measuring concessionary leases at fair value. It also considered the International Public Sector Accounting Standards Board (IPSASB) requirements, which generally favour fair value but permit cost where market-based information is not readily available.
The existing disclosure requirements in AASB 16 regarding concessionary leases will also be retained.
The Board decided not to make any amendments to AASB 16.
The Board will clarify its decision through a footnote to the Basis for Conclusions on AASB 2022-3.
Regulations
ASIC has withdrawn ASIC Corporations (Uncontactable Members) Instrument 2016/187, which provided relief from sending annual reports and other documents to uncontactable members.
The relief was due to expire on 1 October 2026, but ASIC has withdrawn it earlier, noting that amendments to the Corporations Act 2001 now provide similar relief. In particular, sections 110JA and 110F(4A) address circumstances where members are uncontactable or do not have a current address for receiving documents.
The withdrawal took effect through ASIC Corporations (Amendment and Repeal) Instrument 2026/675, registered on 20 August 2026.
ASIC has confirmed increases to the net tangible assets (NTA) requirements for responsible entities of registered managed investment schemes, IDPS operators and corporate directors of retail CCIVs.
Following consultation, ASIC has opted to increase the existing thresholds broadly in line with inflation from June 2013 to March 2026.
From 1 July 2027:
- Minimum NTA requirement will increase from $150,000 to $200,000, while the concessional minimum will increase from $500,000 to $700,000.
- Other thresholds will also increase, including the $5 million average fund assets cap to $7 million and the $10 million non-concessional minimum to $14 million.
ASIC will also introduce annual indexation, with thresholds updated each 1 July based on CPI.
ASIC expects to update Instrument 2023/647 and Regulatory Guide 166 before the new requirements commence.
ASIC has finalised changes to improve transparency over who owns, controls or has significant economic exposure to listed entities. The changes broaden the substantial holding regime to capture interests arising through equity derivatives and apply the disclosure requirements to foreign-registered listed entities.
ASIC has also simplified reporting by replacing Forms 603, 604 and 605 with a new Substantial Holding Notice and streamlining the calculation of relevant interests.
The new requirements commence on 4 December 2026, with a transitional period until 4 June 2027. Regulatory Guides 5, 9 and 222 have also been updated.
ASIC is encouraging small business directors to recognise the early signs of financial difficulty and take action before their options become limited.
ASIC Commissioner Kate O’Rourke highlighted common warning signs, including cash flow pressures, overdue tax or superannuation, unpaid suppliers and increasing reliance on personal funds to keep the business operating. ASIC’s insolvency data shows that many small companies enter external administration with significant liabilities, limited assets and little prospect of returning funds to unsecured creditors.
The message for directors is straightforward: financial difficulty should prompt action rather than be ignored in the hope that circumstances will improve. Directors should actively monitor solvency, investigate financial difficulties, seek professional advice where needed and act promptly.
ASIC’s RG 217 Duty to prevent insolvent trading: Guide for directors sets out these expectations.
Furthermore, ASIC has launched its Small Business Director Essentials hub, bringing together practical guidance, learning modules and tools to help small business directors understand and meet their obligations.
The Accounting Professional and Ethical Standards Board (APESB) is seeking feedback on proposed revisions to APES GN 40 Ethical Conflicts in the Workplace – Considerations for Members in Business.
The exposure draft includes new guidance for members in business on sustainability information, tax planning activities and using the work of external experts, aligning the guidance with APES 110.
The revised APES GN 40 is proposed to apply from the date of issue.
Comments are due by 20 October.
The Australian Taxation Office (ATO) has updated its guidance following the removal of the $2 minimum threshold for claiming tax deductions on eligible gifts and donations to deductible gift recipients (DGRs).
The change applies from 1 July 2026 and is backdated to eligible gifts and donations made from 1 July 2024. Donations below $2 can therefore now be claimed, provided the usual requirements are met. Political donations are excluded.
The ATO also reminds taxpayers that not all charities are DGRs. Donors should check the recipient’s DGR status and retain appropriate records, such as receipts.
Sustainability
ASIC has released a series of eight videos to help companies understand the key concepts underpinning the new sustainability reporting requirements.
Developed with the AASB, the University of Technology Sydney and Studio 3 Learning, the videos cover topics including climate-related disclosures, physical and transition risks, climate-related opportunities, emissions, scenario analysis, and governance and risk management. The videos are based on ASIC’s existing online learning modules and cover similar content to its workshops and webinars.
ASIC is encouraging Group 2 and Group 3 entities to start building their capability and preparing early. Key resources include RG 280 Sustainability reporting, the AASB S2 Knowledge Hub and the AUASB’s sustainability assurance materials.
ASIC also reiterated that it will take a pragmatic and proportionate approach as sustainability reporting requirements are phased in.
Chartered Accountants Australia and New Zealand (CA ANZ) released a Q&A clarifying when NFP entities are required to prepare climate-related disclosures under AASB S2.
The requirement generally applies where an entity is required to lodge financial reports with ASIC under the Corporations Act 2001 and meets the relevant sustainability reporting thresholds. Importantly, charities registered with the Australian Charities and Not-for-profits Commission (ACNC) are generally outside the regime.
NFP companies limited by guarantee that are not ACNC-registered, such as clubs, sporting organisations and industry associations, may need to assess whether they meet the applicable size thresholds as the reporting requirements are phased in.
The Q&A also covers how to calculate the relevant thresholds, the treatment of subsidiaries and the proposed changes to thresholds announced in the May 2026 Federal Budget, which have not yet been enacted.
CA ANZ released a series of information guides to help finance professionals navigate climate-related disclosure requirements.
The resources cover practical topics including a roadmap for preparing for mandatory reporting, materiality, Scope 3 emissions, scenario analysis, transition planning and the implications for small and medium-sized enterprises. The series also includes guidance on assurance, improving Scope 3 disclosures and documenting information supporting climate-related disclosures.
The guides are designed with Australian practitioners in mind and provide practical support for entities preparing for their first AASB S2 reporting cycles.
Treasury has released voluntary guidance to help organisations plan for the impacts of the transition to net zero and a changing climate.
The Australian-focused guidance sets out four key stages for transition planning:
- assessing the organisation’s position,
- setting strategic ambitions,
- planning actions, and
- implementation
It encourages organisations to integrate transition planning into broader strategy and decision-making, bringing together activities such as climate risk assessments, greenhouse gas inventories, stakeholder engagement and capital planning.
While the guidance is voluntary, it is designed to complement climate-related financial disclosures under AASB S2 Climate-related Disclosures. It forms part of Treasury’s Sustainable Finance Roadmap and provides resources and examples to support organisations as they consider their climate-related risks, opportunities and transition plans.
International Financial Reporting Standards (IFRS) developments
The IFRS Foundation’s August 2026 National Standard-setters Newsletter provides an update on recent developments from the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB).
On the accounting side, the IASB has issued IFRS 20 Regulatory Assets and Regulatory Liabilities, a new Standard for entities subject to rate regulation, including electricity, water and gas suppliers. The Standard aims to provide investors with clearer information where there is a timing difference between providing a regulated service and recovering the related amounts through regulated rates. The IASB has also amended the IFRS for SMEs Accounting Standard to introduce a consolidation exception and finalised amendments clarifying the fair value option under IAS 28 Investments in Associates and Joint Ventures.
On sustainability reporting, the ISSB has progressed work on implementing IFRS S1 and IFRS S2, enhancing the SASB Standards and developing an IFRS Practice Statement on Nature-related Disclosures. The ISSB also held the inaugural plenary of its Jurisdictional Adopters Working Group.
The 2026 World Standard-setters Conference will be held in London on 28–29 September.
In case you missed it
The AASB has released educational material to support entities preparing disclosure of transition plans under AASB S2 Climate-related Disclosures. The guidance comes as Group 2 entities prepare for Australia’s mandatory climate reporting requirements for financial years beginning on or after 1 July 2026.
AASB S2 does not require entities to prepare or publish a transition plan. The guide describes how an entity may approach disclosing information about their climate-related transition plans that satisfies the reporting requirements in AASB S2.
It also maps the AASB S2 requirements to the Transition Plan Taskforce (TPT) disclosure framework, helping entities already reporting under the TPT framework identify areas of alignment.
