Welcome to Beyond the numbers, our monthly newsletter which brings you a summary of the latest developments from domestic and global standard-setting bodies and regulatory authorities.
Top story
AASB has released educational material to support entities preparing disclosures about transition plans under AASB S2 Climate-related Disclosures. The guidance comes as Group 2 entities prepare for Australia’s mandatory climate reporting requirements for financial years beginning on or after 1 July 2026.
AASB S2 does not require entities to prepare or publish a transition plan. The guide describes how an entity may approach disclosing information about its climate-related transition plans that satisfies the reporting requirements in AASB S2.
It also maps the AASB S2 requirements to the Transition Plan Taskforce (TPT) disclosure framework, helping entities already reporting under the TPT framework to identify areas of alignment.
Local reporting
In late June 2026, the AASB released Exposure Draft (ED) 341 Updating AASB 1060 to Align the Classification and Presentation Requirements with AASB 18. The ED proposes amendments to AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For‑Profit and Not‑for‑Profit (NFP) Tier 2 Entities so that its classification and presentation requirements mirror those in AASB 18 Presentation and Disclosure in Financial Statements.
The proposals respond to stakeholder feedback supporting closer alignment between Tier 2 and Tier 1 reporting, including the ability for Tier 2 entities to adopt the new AASB 18 income statement presentation. Key proposed amendments include:
- New classification and presentation requirements for income and expenses, including the defined subtotals introduced by AASB 18; and
- Updated guidance on the aggregation and disaggregation of line items.
The proposed amendments would apply to annual reporting periods beginning on or after 1 July 2030, with early application permitted.
The ED is open for comment until 24 August 2026.
CA ANZ has released the latest edition of its reporting essentials guide and illustrative financial reports for members to support the preparation of 30 June 2026 financial reports.
The guide provides a practical summary of key financial reporting developments, including new and amended accounting standards, climate-related disclosures, NFP reporting requirements, updated Australian Securities and Investments Commission (ASIC) guidance, and regulators’ current focus areas. It also highlights standards that have been issued but are not yet mandatory, helping entities plan for future reporting requirements.
Following consideration of stakeholder feedback, the AASB decided to discontinue its projects relating to:
- Service Performance Reporting;
- the AASB–IPSASB comparison project; and
- long‑term public sector discount rates.
The Board will continue a number of open projects including:
- AASB 1059 Service Concession Arrangements;
- Post-implementation review of AASB 16 Leases for NFP and public sector entities; and Intangible assets.
Regulations
The Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Act 2026, introducing changes linking director IDs to ASIC’s Companies Register, received Royal assent.
From 1 July 2027, companies will be required to provide each director’s ID to ASIC as part of annual reviews and notifications of director appointments and changes. Directors must also provide their director ID to the company within seven days of their appointment.
The reforms also give ASIC the power to disqualify a person for up to three years for wilfully failing to apply for a director ID when directed. In addition, directors will be able to use a service address instead of their residential address on public ASIC records, providing greater privacy.
ACNC has released its two regulatory focus areas for 2026-27:
- Updating and strengthening governing documents; and
- Managing relationships with external service delivery partners.
The ACNC encourages charities:
- To review and update governing documents for elements that are outdated, incomplete, or inconsistent with the charity’s activities to reduce misunderstandings, internal disputes, mission drift, and compliance concerns.
- To conduct due diligence when engaging with third parties that assist with delivering services or programs, and that the relationship is documented. Charities also need a process for monitoring, evaluating and ending partnerships.
The ACNC will provide guidance to help Responsible People understand their ongoing obligations and responsibilities to maintain oversight when partners deliver activities on their behalf.
Sustainability
CA ANZ released Substantiating climate-related disclosures: A practical documentation guide for climate reporting entities to help organisations prepare for mandatory climate reporting in Australia and New Zealand.
The guide highlights the importance of maintaining clear documentation to support climate-related disclosures, including the data, assumptions, judgements, methodologies and approvals underpinning reported information. It also outlines good documentation practices and identifies areas requiring particular attention, such as materiality assessments, reporting boundaries, scenario analysis, Scope 3 greenhouse gas emissions and transition plans.
The guide also reminds entities of the seven-year record retention requirements in Australia and New Zealand and includes practical considerations for using artificial intelligence and external experts in preparing climate-related disclosures.
International Financial Reporting Standards (IFRS) developments
IFRIC has published two additional tentative agenda decisions providing further insight into the application of IFRS 18 Presentation and Disclosure in Financial Statements.
The first considers whether a management-defined performance measure (MPM) can include hypothetical income or expenses that have not been, and will never be, recognised in the financial statements. Examples include annualised rental income, pro forma business combination results, or results excluding the effects of a significant event. The Committee tentatively concluded that IFRS 18 does not restrict how an MPM is calculated, provided it faithfully represents management’s view of financial performance.
The second agenda decision considers a manufacturer that also leases its products and how it assesses its specified main business activities under IFRS 18. The Committee observed that, based on the fact pattern presented, leasing activities may form part of the entity’s main business activities, which affects the classification of interest and similar items in the statement of profit or loss.
IFRIC’s podcast discussing the above can be accessed via the IFRS Foundation’s website.
Both tentative agenda decisions are open for public comment until 9 September 2026.
At its July 2026 meeting, the IASB concluded its post-implementation review of IFRS 16 Leases, finding that the Standard is operating as intended. Feedback from stakeholders indicated that IFRS 16 has improved the transparency and comparability of lease information, giving investors greater visibility over how leases affect an entity’s financial position, financial performance and cash flows.
The review also identified areas where applying the Standard remains complex and costly. In response, the IASB has agreed to undertake a standard-setting project to simplify requirements relating to the remeasurement of lease liabilities, discount rates and the interaction between IFRS 16 and IFRS 9 Financial Instruments for certain rent concessions. A project timetable is yet to be announced, with a Project Summary and Feedback Statement expected in the fourth quarter of 2026.
The IASB also agreed to propose a narrow-scope amendment to IFRS 18 Presentation and Disclosure in Financial Statements, requiring taxes that are a direct substitute for income tax to be classified within the income taxes category. An ED is expected in the fourth quarter of 2026.
The IASB has tentatively agreed to propose amendments to IAS 7 Statement of Cash Flows to improve disclosures about non-cash investing and financing transactions.
The proposals would require entities to disclose material non-cash transactions in a single note, including the nature and amount of each transaction and its effect on assets, liabilities and equity. Additional disclosures would also help users understand how these transactions affect changes in net assets and an entity’s future cash flows.
The proposals could expand disclosure requirements for common non-cash transactions such as lease additions, debt-for-equity conversions and vendor-financed acquisitions. The Board also discussed possible changes to cash flow reporting for financial institutions, although no decisions have been made.
The IASB continued its redeliberations on the proposed revisions to IAS 28 Investments in Associates and Joint Ventures at its July 2026 meeting.
The IASB tentatively agreed that entities should disclose their accounting policy for recognising gains or losses from transactions with associates. Additional disclosure requirements were also proposed for entities that either recognise gains or losses in full or restrict their recognition. These include information about upstream and downstream transactions, the nature of transactions with associates, and reconciliations of restricted gains and losses.
The Board also discussed the transition requirements for the revised Standard. Entities would generally apply the new requirements retrospectively, although relief would be available where retrospective application would involve undue cost or effort. The Board also confirmed proposed transition requirements relating to contingent consideration, impairment and first-time adopters.
The IASB will next consider the due process steps before issuing the revised Standard.
In case you missed it
The AASB issued:
- AASB 2026-2 Extending the Application of the Conceptual Framework and Limiting the Ability of Not-For-Profit Entities to Prepare Special Purpose Financial Statements; and
- AASB 1061 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities.
AASB 2026-2 requires both private sector and public sector NFP entities to prepare general purpose financial statements if they:
- Are required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards; or
- Are required only by their constituting document or another document to prepare financial statements that comply with Australian Accounting Standards, and where that document was created and last amended after 1 July 2029.
AASB 1061 introduces a Tier 3 reporting framework designed to reduce the reporting burden for smaller NFP entities by focusing on the information most relevant to users of their financial statements. Key simplifications compared to Tier 1 or Tier 2 include:
- Keeping leases off balance sheet for lessees;
- Optional, rather than mandatory, consolidation;
- Simplified accounting for revenue, financial instruments, employee benefits and impairment; and
- Reduced related party disclosure requirements.
Both Standards apply to annual reporting periods beginning on or after 1 July 2029, with early application permitted.
Eligibility to apply the Tier 3 framework will be determined by each relevant NFP regulator, which is not expected before 2027.
Further guidance is available in the AASB 1061 Knowledge Hub.
