Financial reporting improvements underway

Several for-profit private sector entities will be required to prepare their 30 June 2022 financial statements under Tier 2 general purpose financial statements. The Australian Accounting Standards Board (AASB) approved AASB 2020-2 Amendments to Australian Accounting Standards – Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities in March 2018. This means that these for-private sector entities will no longer be allowed to prepare and lodge special purpose financial statements moving forward.

Why change?

The AASB cited differences between the Statement of Accounting Concepts (SAC) 1 Definition of the Reporting Entity, increase in large proprietary thresholds target reporting requirements to entities with economic significance, and the following reasons for the change:

What does it mean for my entity?

For-profit private sector financial statements will be significantly impacted by AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Entities. This includes potentially pivoting systems, procedures and practices used in preparing financial statements. Before implementing these changes, entities will need to:

Which entities will be impacted by AASB 1060?

The following for-profit entities will be impacted:

These entities will need to consider assessing the impact of AASB 1060 and engage with their relevant stakeholders.

Additional resources

The AASB have published useful fact sheets on the following:

Want more information?

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