Financial reporting framework for not-for-profit private sector entities

New reporting framework for NFPs

The AASB has introduced a new financial reporting framework for not-for-profit (NFP) entities, removing special purpose financial statements (SPFS) for certain organisations and requiring general purpose financial statements (GPFS).

The amendments (set out in AASB 2026-2 Amendments to Australian Accounting Standards – Extending the Application of the Conceptual Framework and Limiting the Ability of Not-for-Profit Entities to Prepare Special Purpose Financial Statements) were issued by the AASB in April 2026. These amendments will work in conjunction with the new GPFS-Tier 3 standard, AASB 1061 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities (AASB 1061).

The amendments will apply from reporting periods beginning on or after 1 July 2029, aligning with the effective date of AASB 1061. This timing ensures that eligible not-for-profit entities moving to general purpose financial statements will have access to the simpler Tier 3 reporting framework when required, subject to any regulatory response. Read our article for more information about the new Tier 3 accounting standard.

What is changing?

AASB 2026-2 makes various amendments to the Australian Accounting Standards (AAS), Interpretations and other pronouncements. Specifically, it:

extends the application of the Conceptual Framework, including adding 'Aus' paragraphs to ensure its contents are relevant to NFP entities
extends the application of AAS to NFP private and public sector entities
supersedes SAC 1 Definition of the Reporting Entity and thereby removing the ability of NFP entities to prepare SPFS on the basis that the entity is not a reporting entity (as defined by SAC 1).

Which NFP entities are in scope?

NFP entities that are required by legislation to comply with either AAS or accounting standards, or are required by their constituting document or another document to prepare financial statements that comply with AAS will be required to prepare GPFS. An exemption is available where the requirement arises solely from a constituting document or another document as long as that document was created or amended before 1 July 2029.

Entities already preparing GPFS are unlikely to see significant changes.

What reporting frameworks are applicable to impacted NFP entities?

NFP private sector entities previously relying on SPFS will now need to transition to:

Tier 1 GPFS (full AAS), or
Tier 2 GPFS (Simplified Disclosures), or
Tier 3 Not-for-Profit Private Sector, where eligible.

The new Tier 3 accounting standard is designed as a stand-alone standard, written in more accessible language, with simpler recognition, measurement and disclosure requirements than full AAS. Read our article for more information about the new Tier 3 accounting standard.

Next steps

Assess whether your organisation will be required

to transition from preparing SPFS to GPFS under the new framework. Use our assessment tool
If a transition to GPFS is required, consider which reporting tier will apply

Tier 1, Tier 2 or the new Tier 3 – based on your entity’s size, structure, and user needs.
Undertake a high-level review of key areas that typically change when moving from SPFS to GPFS

(e.g. consolidation, revenue recognition, related party disclosures, and accounting policies) to understand the potential impact.
Consider when you will implement the changes

including whether early adoption is beneficial.