Developing a Simpler Reporting Framework for NFP Entities in Australia – Exposure Drafts Released for Feedback

Thursday, October 31, 2024

The AASB has published:

•  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.

ED 334 and ED 335 are open for comment until Friday, 28 February 2025.

These EDs are the result of feedback received, discussions and research by the AASB undertaken since the previous consultation process including the Board’s preliminary view presented in the 2022 Discussion Paper.

ED 334 proposes:

• amendments to the Conceptual Framework for Financial Reporting (Conceptual Framework) and Australian Accounting Standards (including Interpretations) to remove the ability for not-for-profit entities to prepare SPFS via AASB 1057 Application of Australian Accounting Standards so that the pronouncements apply to:
  • NFP entities that are required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards;
  • other NFP entities that are required only by their constituting document or another document to prepare financial statements that comply with Australian Accounting Standards; and
  • NFP entities that elect to prepare general purpose financial statements.

ED 335 proposes:

• a new Tier 3 Australian Accounting Standard General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities with simplified recognition, measurement and disclosure requirements that apply to all eligible not-for-profit (NFP) private sector Tier 3 entities.

The consultation provides an opportunity for interested stakeholders to help shape the NFP sector financial reporting framework.

To accompany the consultation on these Exposure Drafts, the AASB has published:

• A summary of the Tier 3 Exposure Draft proposals and the extent of simplification against Tier 2 reporting requirements.
• A key facts document that provides a high-level overview of the Exposure Drafts.

AASB staff is also developing a webcast to provide an overview of the key proposals in ED 334 and ED 335. More details will be available soon.

We encourage all NFP stakeholders to get involved by:

• submitting a comment letter on the AASB website;
• completing an online survey for: 
  • ED 334, click here to access; or
  • ED 335, click here to access.
• attending an outreach event – details to be provided shortly.
• by reaching out to the AASB directly.