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2025 Financial Reporting Update – Recording
The recording of Nexia Australia’s annual Financial Reporting Update webinar and materials are available on our website. Topics discussed include:
- The key accounting standards changes for 30 June 2025;
- How recent changes will affect the classification of loans with annual review clauses, covenants and other conditions;
- Key elements of mandatory sustainability reporting and how companies will be affected;
- Developments in not-for-profit financial reporting; and
- Other considerations for 30 June 2025 financial reporting.
Local Reporting
AASB Board Meeting – May 2025
The Australian Accounting Standards Board (AASB) discussed the following matters at its meeting on 1 May 2025:
- Not-for-Profit (NFP) private sector financial reporting framework (Tier 3):
The Board began considering feedback on Exposure Drafts ED 334 Limiting the Ability of Not-for-Profit Entities to Prepare Special Purpose Financial Statements and ED 335 General Purpose Financial Statements – Not-for-Profit Private Sector Tier 3 Entities. No specific decisions were made. - Post-implementation review (PIR) of NFP topics:
The Board decided not to propose amendments to AASB 10 at this time but will undertake further research to better understand the significance, prevalence and magnitude of the implementation challenges identified by stakeholders. The Board decided not to propose any amendments to AASB 12 for NFP entities.
A feedback statement will be released in the second half of 2025. - PIR – AASB 16 Leases:
An Invitation to Comment (ITC) is expected to be issued in Q3 2025. The ITC will include both the IASB’s PIR consultation document in full and Australian-specific content, including matters identified by NFP and public sector stakeholders. - Climate-related Disclosures:
The Board reviewed its project plans to provide Implementation Support and Industry-based Information to support the adoption of AASB S2.
Application of AASB 18 by NFP and superannuation entities
At its May 2025 meeting, the AASB decided developing an Exposure Draft to propose changes to how AASB 18 Presentation and Disclosure in Financial Statements will apply to NFP and superannuation entities.
The proposed changes include:
- Whole of Government and General Government Sectors:
Keep current presentation requirements of AASB 1049 Whole of Government and General Government Sector Financial Reporting in relation to statement of profit or loss and expenses, but require AASB 18’s aggregation and disaggregation requirements in addition to specific disaggregation requirements of AASB 1049. Management-defined performance measure (MPM) disclosures will be voluntary. - Other NFP Public Sector Entities (including local governments and universities):
Allows to retain AASB 101’s financial statement presentation requirements but require AASB 18’s aggregation and disaggregation requirements. MPM disclosures will be voluntary. - NFP Private Sector Entities:
The AASB plans to get more general feedback from this sector before proposing specific changes. - Superannuation Entities:
Retain the presentation requirements of AASB 1056 Superannuation Entities in relation to statement of profit or loss and operating expenses, and the statement of changes in member benefit, but require AASB 18’s aggregation and disaggregation requirements in addition to specific disaggregation requirements. Requires MPM disclosures. And finally, modifying AASB 1056 to specify that the statement of changes in member benefits is a ‘primary financial statement’ for the purposes of a superannuation entity’s GPFS.
The Board will continue discussing these proposed changes at its future meetings.
Review of AASB 1060
The AASB will release an Invitation to Comment (ITC) in Q3 2025 as part of its review of AASB 1060 General Purpose Financial Statements – Simplified Disclosures for Tier 2 Entities.
The ITC will seek feedback on two subjects:
- Post-implementation review of AASB 1060 and whether the standard is operating as intended.
- Whether amendments should be made to AASB 1060 reflecting recent changes to the IFRS for SMEs and the potential effects of AASB 18 and IFRS 19 Subsidiaries without Public Accountability: Disclosures.
Stakeholders will have 120 days to provide feedback.
Regulations
ASIC focus areas for FY2025-26
The Australian Securities and Investments Commission (ASIC) released its financial reporting and audit focus areas for the June 2025 and December 2025 reporting periods.
Enduring financial reporting focus areas include revenue recognition, asset valuation (including impairment of non-financial assets and estimated credit losses on loans and receivables), estimation of provisions, subsequent events and the operating and financial review disclosures in the directors’ report.
ASIC also highlighted the following matters:
- Monitoring of ‘grandfathered’ proprietary companies that have not lodged financial reports since their exemption ended in 2021.
- Reviewing the initial sustainability reports for December 2025 “proportionate and pragmatic approach” to supervision and enforcement.
- A focus on auditor independence and conflict of interest obligations.
- A reminder on the consolidated entity disclosure statement (CEDS) for public entities.
- Review of registrable superannuation entities’ financial reports, with particular focus on measurement and disclosure of investment portfolios, and disclosure of marketing and advertising expenses; and
- An increase in the number of audit files to be reviewed under their auditor surveillance program
ACNC extends transitional reporting arrangements
The ACNC transitional reporting arrangements in place for:
- charities registered with the Office of the Registrar of Indigenous Corporations (ORIC),
- non-government schools reporting to the federal Department of Education (DoE), and
- cooperatives in each State and Territory
have been extended up to and including the 2028‑29 financial year.
The transitional arrangements eliminate the requirement for registered charities to lodge financial information with the ACNC as well as other regulators.
Sustainability
Exposure Draft on amendments to greenhouse gas emissions disclosures
Following the International Sustainability Standards Board (ISSB)’s Exposure Draft containing narrow scope amendments to IFRS S2 Climate-related Disclosures, the AASB released ED SR2 Amendments to Greenhouse Gas Emissions Disclosures.
The proposed changes address identified application issues including:
- relief from measuring and disclosing Scope 3 Category 15 greenhouse gas (GHG) emissions associated with derivatives and some financial activities;
- permit the use of alternative Global Warming Potential (GWP) values that are not from the latest Intergovernmental Panel on Climate Change (IPCC);
- provide jurisdictional relief allowing the use of methods other than the Greenhouse Gas Protocol to measure GHG emissions; and
- permit alternatives to the Global Industry Classification Standard (GICS) when disaggregating financed emissions by industry in certain circumstances.
An ISSB webinar discusses these proposed changes.
The AASB comment period closed on 2 June 2025, while the ISSB’s 60-day comment period closes on 27 June 2025.
CA ANZ | Climate Transition Guide for Accountants
Chartered Accountants Australia and New Zealand (CA ANZ) released a Transition Plans Information Guide to help finance professionals navigate climate-related transition planning.
The guide explains the importance of credible, science-based strategies to achieve net zero targets, aligned with Australian (AASB S2) and New Zealand regulations. It also highlights the key role accountants play in integrating climate goals into financial planning, governance, and disclosures.
ISSB Board Meeting – May 2025
The ISSB met on 15 May 2025 to discuss proposed amendments to SASB Standards.
A proposed exposure draft will contain proposed amendments for all eight SASB Standards in the Extractives sector, the Processed Foods SASB Standard and targeted amendments to a further 41 SASB Standards. The exposure draft is expected to be finalised in June 2025.
A podcast episode summarising the highlights of this meeting is available on the IFRS website.
Sustainability education materials
The ISSB released additional education material to support first-time preparers of climate-disclosures.
Episode 10 ’Governance of sustainability-related risks and opportunities: structures, roles and oversight’ of its webinar series explores the roles and responsibilities of management and those charged with governance in relation to sustainability-related risks and opportunities.
IFRS Developments
IASB Board Meeting – May 2025
The International Accounting Standards Board (IASB) discussed several key agenda papers at its May 2025 meeting, including:
- Climate-related and other uncertainties:
The Board reviewed staff recommendations on applying IFRS Accounting Standards to these risks. - Rate-regulated activities:
Discussions focused on sweep issues related to the new standard for regulatory assets and liabilities. - Business Combinations – Disclosures, Goodwill and Impairment:
Addressed refinements to disclosure requirements within IFRS 3. - Post-implementation review of IFRS 16 Leases:
Approval was granted to publish a Request for Information to gather stakeholder feedback. - Equity method of accounting and Hyperinflationary presentation currency:
The Board considered feedback on these areas.
A podcast summarising the highlights of the meeting is available on the IFRS website.
Education material – Going Concern
The IFRS Foundation updated its educational material Going Concern – A Focus on Disclosure.
The update reflects changes introduced by IFRS 18 Presentation and Disclosure in Financial Statements, which moves going concern requirements from IAS 1 Presentation of Financial Statements to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (effective 2027), and revisions to International Auditing Standard ISA 570 Going Concern. Outdated COVID-19 references were also removed.
The updated guide supports consistent application without introducing new requirements.
IFRIC Agenda decisions – Volume 12
The IFRS Interpretation Committee published Compilation of Agenda Decisions—Volume 12, covering its decisions from November 2024 to April 2025. This volume includes decisions on topics such as revenue recognition under IFRS 15, cash flow classification under IAS 7, and intangible asset recognition under IAS 38. The agenda decisions explain why certain issues were not added to the standard-setting project work plan.
In case you missed it
Understanding AASB S2 Climate-related Disclosures
Nexia Australia has released its publication describing the key disclosure requirements of AASB S2 Climate-related Disclosures and the phased assurance implementation timeline for those disclosures.
The publication should be read in conjunction with Nexia Australia’s publication Mandatory Climate-related Disclosures Legislation Passed which describes which entities are required to mandatorily apply AASB S2, the timeline for adoption, group reporting and alternative reporting requirements for Group 3 entities that have no material climate-related financial risks and opportunities.
