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Australian Accounting Standards Board issues two Exposure Drafts

 

The Australian Accounting Standards Board (AASB) proposals in a Discussion Paper (DP) to develop simplified accounting for Tier 3 private sector entities and remove the ability to prepare special purpose financial statements (SPFS).  
The AASB has made significant progress and issued two Exposure Drafts (EDs) last year based on feedback from the DP:
   • Exposure Draft ED 334 Limiting the Ability of Not-for-Profit Entities to Prepare Special Purpose Financial Statements; and
   • Exposure Draft ED 335 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities.

These EDs contain the AASB Board’s proposals to remove the ability for NFP entities required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards to prepare SPFS. If the proposals become effective, NFP entities including associations and charities must submit general purpose financial statements (GPFS) as part of the regulatory requirements to their respective regulators if required.   As part of the proposals, the AASB Board is also developing a third Tier of GPFS (i.e. Tier 3 GPFS) that contains more simplified requirements than the existing Tier 1 or Tier 2 GPFS requirements. While the Tier 3 GPFS requirements were developed based on transactions common to NFP entities with revenue between $500k to $3M, the AASB Board has not developed thresholds for which entities may apply Tier 3 GPFS if these proposals become effective.

The comment period for the EDs is open until 28 February 2025 and we’ve developed a number of ways for stakeholders to provide feedback via the following:
   • Participate in our survey
   • Attend a virtual or in-person outreach event
   • Email standard@aasb.gov.au


More information on these proposals can be found on our website including:
   • Webcast overview
   • Summary of the Tier 3 proposals
   • Key facts document

Taken from the Australian Accounting Standards Board Newsletter on January 13, 2025.

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