Audit Lowe Down – Are Special Purpose Financial Statements Still Acceptable for For-Profit Entities?

Lowe Lippmann Chartered Accountants

Are Special Purpose Financial Statements Still Acceptable for For-Profit Entities?


The financial reporting landscape in Australia has seen significant changes over the last few years, particularly in the acceptability of special purpose financial statements (SPFS) for for-profit entities. Historically, many for-profit entities prepared SPFS to meet specific needs without adopting the full suite recognition, measurement and disclosure requirements of accounting standards.


We continue to receive lots of questions about whether for-profit entities can continue to prepare special purpose financial statements.


The AASB introduced new requirements for assessing whether a for-profit, private sector entity needs to prepare general purpose financial statements through amendments released in AASB 2020-2 Amendments to Australian Accounting Standards – Removal of Special Purpose Financial Statements for Certain For Profit Private Sector Entities.

In summary, from 30 June 2022,  a for-profit private sector entity must prepare general purpose financial if one of the following criteria is met – the entity complies with:

  • A legislative requirement to prepare financial statements in accordance with Australian Accounting Standards or accounting standards – this would include, for example Companies required to financial statements under the Corporations Act, e.g. all large proprietary companies, small foreign owned companies, public companies greater than $250k revenue OR
  • A constituting or other document that requires the preparation of financial statements in accordance with Australian Accounting Standards. This might include documents such as constitution, trust deed, joint venture agreement, bank loan agreement. If this requirement exists and
  • the agreement was created / amended prior to 1 July 2021 then an entity can continue preparing special purpose financial statements with some extra disclosures
  • the document was created or amended after 1 July 2021 then then general purpose financial statements must be prepared.


While SPFS might still be permissible in specific cases, entities should evaluate whether their current financial statements are appropriate given the change in accounting standards.


Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

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