This reporting update sets out key developments for 30 June 2022 annual reporting periods for not-for-profit (NFP) entities.

It highlights the activities of both the Australian Accounting Standards Board (AASB) and the Australian Charities and Not-for-profits Commission (ACNC). 

The introduction of related party and KMP disclosures will present a new challenge for some charities. We recommend those needing to apply this for the first time review their current systems and controls now to ensure they can capture relevant data required by these amendments in time for mandatory application.

Kim Heng
Partner, Department of Professional Practice

In summary

  • Where an NFP entity prepares Tier 2 general purpose financial statements (GPFS) it will need to transition from GPFS-Tier 2 Reduced Disclosure Requirements (RDR) to GPFS-Tier 2 Simplified Disclosures (SD) for financial years beginning on or after 1 July 2021, i.e. 30 June 2022 financial years. The simplified disclosures are set out in AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.
  • Where an NFP entity is not a reporting entity it is still able to prepare special purpose financial statements (SPFS).  
  • Annual revenue thresholds for determining charity size, and therefore reporting obligations, of ACNC-registered charities have increased. This applies to financial years ending 30 June 2022.
  • Medium and large charities preparing SPFS may need to include key management personnel (KMP) and related party disclosures. This will apply in two phases for financial years ending 30 June 2022 and 30 June 2023 respectively. 
  • The temporary option to elect to initially measure the right-of-use asset for a concessionary lease at cost rather than fair value will be made permanent for private sector NFP entities.   

Further details and guidance are included in this Reporting Update.

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