Audit Lowe Down – Big changes proposed for NFP financial reporting

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Audit Lowe Down – Big changes proposed for NFP financial reporting

Lowe Lippmann Chartered Accountants

Big changes proposed for NFP financial reporting

The AASB have just released their long anticipated exposure drafts relating to future financial reporting requirements for private sector NFP entities. These changes will mean that certain NFP entities are no longer able to prepare special purpose financial statements and will introduce a third tier of accounting standards which is able to be used by some NFP entities.

These proposals are still in exposure draft phase and therefore you have an opportunity to provide feedback – once the final standards are released it will be too late.

The comment period is open until 28 February 2025, and we encourage all our potentially affected clients to reach out to your Lowe Lippmann contact to discuss the impact on your financial statements as well as providing direct feedback to the AASB.

In summary, these proposals are:

NFP private sector entities to prepare general purpose financial statements if they meet one of the following:
Are required by legislation to prepare financial statements that comply with either Australian Accounting Standards or accounting standards or
Are required by their constituting or other document to prepare financial statements that comply with Australian Accounting Standards or
Choose to prepare general purpose financial statements. (ED 334 Limiting the Ability of Not-for-Profit Entities to Prepare Special Purpose Financial Statements).
To release a self-contained accounting standard which can be applied to certain NFP private sector entities and will be a general purpose framework (Tier 3).

Further information about getting involved and additional resources are available on the AASB website on https://www.aasb.gov.au/news/developing-a-simpler-reporting-framework-for-nfp-entities-in-australia-exposure-drafts-released-for-feedback/

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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