Sep 21, 2026 Matthew Hung

New Financial Reporting Rules for Not-for-Profit Organisations: What You Need to Know

Australia’s not-for-profit (NFP) sector is set for significant changes to financial reporting. The Australian Accounting Standards Board (AASB) has introduced new standards that will substantially reduce the circumstances in which organisations can prepare Special Purpose Financial Statements (SPFS), requiring many entities to move to General Purpose Financial Statements (GPFS). The changes apply to reporting periods beginning on or after 1 July 2029.

What Is Changing?

The AASB has issued two new standards:

• AASB 2026-2, which limits when NFP entities can prepare SPFS.
• AASB 1061, which introduces a new Tier 3 reporting framework for eligible NFP entities.

For organisations already preparing GPFS, there will be little change. However, many NFP organisations currently preparing SPFS will need to transition to GPFS.

Will Your Organisation Need to Change?

Under the new requirements, an NFP will generally need to prepare GPFS if it:

• Is required by legislation to comply with Australian Accounting Standards; or
• Is required by its constitution, trust deed or other governing document to prepare financial statements that comply with Australian Accounting Standards.

Understanding the Reporting Tiers

Entities required to prepare GPFS will have three reporting options:

• Tier 1: Full Australian Accounting Standards.
• Tier 2: Simplified Disclosure Requirements.
• Tier 3: A new reporting framework designed specifically for eligible not-for-profit entities.

The introduction of Tier 3 is an important first step in making financial reporting more proportionate for smaller and less complex NFPs.

At present, Tier 3 is a form of General Purpose Financial Statements. This means entities that are required to prepare GPFS may be able to use the Tier 3 framework to satisfy that requirement. However, the framework was developed with medium-sized NFPs in mind, and attention will now turn to whether regulators, including the ACNC, will introduce additional requirements that limit its use by larger organisations.

Until those regulatory changes are made, there remains some uncertainty about how Tier 3 will apply in practice and which organisations will ultimately be permitted to use it.

What Should Organisations Do Now?

Although the changes do not take effect until 2029, now is a good time to start assessing the potential impact. Organisations should consider:

• Whether they will need to move from SPFS to GPFS.
• Which reporting tier is likely to be appropriate.
• The impact on areas such as revenue recognition, consolidation, related party disclosures and accounting policies.

Early planning will help organisations understand the requirements and avoid last-minute implementation challenges.

Looking Ahead

These reforms represent a significant shift in financial reporting for the NFP sector. While many organisations may need to review their reporting approach, the new Tier 3 framework is intended to provide a simpler and more practical reporting option for eligible entities.

Although the new requirements do not apply until 2029, early consideration of the potential impacts can help avoid implementation challenges down the track.

Our team will continue to monitor developments and keep clients informed as further guidance becomes available. We are available to assist organisations in understanding the changes, assessing their likely impact and planning for a smooth transition.

If you would like to discuss how these changes may affect your organisation, please contact our Audit and Assurance team.