AASB 1060 Exposure Draft – alignment with AASB 18

Changes to AASB 1060
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Alignment between Tier 1 and Tier 2 reporting

AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (AASB 1060) sets out disclosure requirements for general purpose financial statements of for-profit private sector entities that do not have public accountability, not-for-profit private sector entities and certain public sector entities (Tier 2 entities). Entities applying AASB 1060 apply all the recognition and measurement requirements in Australian Accounting Standards (AAS) and AASB 1060 in relation to disclosure requirements instead of those set out in each AAS.

In addition, except to the extent specifically addressed in AASB 1060, the definitions and presentation requirements of other AAS continue to apply. This means that AASB 1060 incorporates the relevant disclosures from all AAS, including those from disclosure-only AAS, including AASB 101 Presentation of Financial Statements and AASB 107 Statement of Cash Flows.

AASB 18 Presentation and Disclosure in Financial Statements introduces significant changes to presentation and disclosure requirements for Tier 1 entities, replacing AASB 101 and introducing amendments to AASB 107.

Key changes introduced by AASB 18 include:

a more structured income statement
enhanced guidance on aggregation and disaggregation
disclosure of management-defined performance measures (MPMs)
other specific amendments to the statement of cash flows and statement of financial position.

To ensure consistent reporting across Tier 1 and Tier 2 entities, the AASB published Exposure Draft 341 Updating AASB 1060 to Align the Presentation and Classification Requirements with AASB 18 (the ED), which proposes amending AASB 1060 to align its presentation and classification requirements with AASB 18.

(For more information on AASB 18, refer to our article AASB 18 Presentation and Disclosure in Financial Statements.)

What changes are being proposed?

The following changes to AASB 1060 are proposed:

AASB 18 introduced major changes to how primary financial statements and notes are presented. To keep reporting consistent for both Tier 1 and Tier 2 entities, the ED proposes applying these same presentation changes to AASB 1060. This includes adding the classification and presentation requirements from AASB 18 and the updated presentation requirements in AASB 107.

In addition to the main requirements in AASB 18, an appendix provides extra application guidance. It explains how the requirements should be applied and has the same authority as the Standard. This guidance is integral to interpreting AASB 18 and will be included in AASB 1060 as a new Appendix B.

Some paragraphs previously in AASB 101 were moved to AASB 108 Basis of Preparation of Financial Statements¹ when AASB 18 was introduced. Tier 2 entities must apply the presentation requirements in both AASB 108 and AASB 1060. As a result, presentation-related paragraphs will be removed from AASB 1060 to avoid duplication.

¹ Renamed from AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors as part of amendments to other AAS from AASB 18.

Notably, Tier 2 entities will not be required to identify or disclose management-defined performance measures (MPMs).

The amendments are proposed to be effective for annual periods beginning on or after 1 July 2030, with early application permitted.

On adoption, entities will apply the amendments retrospectively with restatement of comparative information.

Frequently asked questions

The proposals in the ED amend AASB 1060 to align the classification and presentation requirements with those in AASB 18. Following feedback received by the AASB in response to ITC 56 Post-implementation Review of Tier 2 and the Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities and Further Update of Tier 2, the AASB is proposing to include in AASB 1060 all the relevant classification and presentation requirements that are in the main body of AASB 18.

The key changes to Tier 2 general purpose financial statements expected from these amendments are:

a more structured income statement, including new subtotals and categories for income and expenses
disclosures regarding specified main business activities, i.e. investing in assets or providing financing to customers
enhanced guidance on aggregation and disaggregation
revised requirements for classifying dividend and interest cash flows
separate presentation of goodwill on the balance sheet.

For more details on the above changes introduced by AASB 18, refer to our article AASB 18 Presentation and Disclosure in Financial Statements.

The proposed amendments to AASB 1060 promote consistent presentation of primary financial statements across Tier 1 and Tier 2 entities.

In Australia, there are often large groups with multiple subsidiaries preparing Tier 2 financial statements while the parent prepares Tier 1 financial statements. Aligning presentation requirements would ease preparation of financial statements and improve consistency and comparability across the group.

Yes, the current AASB 1060 concessions continue to apply including:

no requirement to present a third statement of financial position when applying an accounting policy retrospectively, making a retrospective restatement or reclassifying items in the financial statements; and
the option to present a statement of income and retained earnings instead of separate statements of profit or loss and other comprehensive income and changes in equity.

The proposed amendments are effective for annual reporting years beginning on or after 1 July 2030 with early adoption permitted.

The AASB has committed to fast-tracking the amended AASB 1060.

The three-year transition period supports a smooth implementation, while allowing Tier 2 entities to adopt the requirements at the same time as Tier 1 entities applying AASB 18 from 1 January 2027².

² For not-for-profit and superannuation entities, the effective date of AASB 18 is deferred to annual reporting years beginning on or after 1 January 2028.

Yes, the amendments must be applied retrospectively, requiring restatement of comparative information.

Entities should ensure they can meet the new presentation requirements for both the first year of application (i.e. financial years beginning on or after 1 July 2030) and the comparative period (i.e. financial years beginning on or after 1 July 2029).

Based on the ED the following requirements are the key differences:

Management-defined performance measures (MPMs): AASB 18 requires Tier 1 entities to identify and disclose MPMs. The ED does not propose extending these requirements to Tier 2 entities.
Expense disclosures by nature: AASB 18 introduces expanded disclosures for entities that present operating expenses by function or mix of function and nature. These similar disclosures are not currently required under AASB 1060 and are not proposed to be introduced for Tier 2 entities.

The ED also includes a number of other minor amendments to AASB 1060 arising from the introduction of AASB 18.

In September 2025, the AASB issued ITC 56 Post-implementation Review of Tier 2 and the Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities and Further Update of Tier 2, which considered stakeholder feedback on the implementation of AASB 1060 and sought comments on its future direction.

Based on submissions received, the AASB agreed to fast-track amendments to AASB 1060 to align its presentation requirements with AASB 18 to improve consistency in reporting between Tier 1 and Tier 2 entities.

The AASB is still considering other outcomes from the ITC 56 feedback over the longer-term.

Yes, as noted in the ED, the AASB has prioritised aligning the classification and presentation requirements in AASB 1060 with those in AASB 18 and has issued this ED to implement the amendments necessary to maintain that consistency. New disclosure requirements introduced by AASB 18 that are not currently included in AASB 1060 will be considered separately, alongside potential changes arising from the IASB’s third edition of the IFRS for SMEs Accounting Standard (issued in February 2025) and the possible adoption of IFRS 19 Subsidiaries without Public Accountability: Disclosures in Australia.