FAQs on Australian Reporting Framework changes

We have previously provided guidance on the changes to the Australian Reporting Framework for the reporting periods beginning on or after 1 July 2021. Here, we provide answers to some common questions about the removal of special purpose financial statements (SPFS) for certain for-profit entities.

My entity is a large pty ltd but is family owned and managed and doesn’t have any users. Can I continue to prepare SPFS?

The Corporations Act 2001 requires large pty ltd companies to prepare financial statements in accordance with the accounting standards and therefore financial statements prepared for reporting periods commencing on or after 1 July 2021 will need to be general purpose financial statements (GPFS).

The reporting entity concept which allows a self-assessment of users is no longer applicable for for-profit entities.

Can a not-for-profit entity continue to prepare SPFS?

Yes, the removal of SPFS applies to for-profit entities only.

The AASB will release a discussion paper on the framework for not-for-profit (NFP) entities in 2022 and we would encourage our NFP clients to review this and provide comments either to the AASB directly or to your Bentleys representative.

One of the criteria for GPFS relates to whether legislation requires the entity to prepare financial statements in accordance with accounting standards. Our entity is not governed by the Corporations Act so does this criterion apply to us?

The Corporations Act is commonly provided as an example of legislation which will require preparation of GPFS, however an entity is required to consider the financial reporting requirements in ALL legislation with which it has to comply.

The AASB staff have published Research Report 10: Legislative and Regulatory Financial Reporting Requirements which provides some information on the range of legislation requiring financial reporting.

My entity is not required to prepare financial statements under any legislation, however please can you provide some examples of the constituting and other documents which I need to consider under the second criteria?

An entity should consider all documents with which it is required to comply, these documents may include (but are not limited to):

  • Bank loan agreements
  • Sales / purchase agreements
  • Trust deeds
  • Joint venture / partnership agreements
  • Earn out agreements
  • Constitutions.

Remember if the document contains a requirement to ‘prepare financial statements in accordance with Australian Accounting Standards’ and that document was created or amended after 1 July 2021 then GPFS will need to be prepared unless the sentence is removed from the document.

My entity is required to comply with a document created in 2019 requiring the preparation of financial statements in accordance with Australian Accounting Standards, a change is required to this document which has nothing to do with financial reporting. Will this change mean that the entity has to prepare GPFS?

There is a grandfathering arrangement in place for documents created or amended before 1 July 2021 and SPFS can continue to be prepared.

If the document is to be amended after 1 July 2021 and the users do not require GPFS then the changes made should include removal of the sentence ‘prepare financial statements in accordance with Australian Accounting Standards’ to be replaced with ‘prepare financial statements as required by the [Trustees / Partners / bank etc]’. This change will mean that the relevant parties can determine the format and content of the annual financial statements.

We encourage all entities who are potentially impacted by the changes to the Australian Reporting Framework to get in touch with your Bentleys contact to discuss the impacts for you and adoption options available.


For assistance with your financial reporting requirements, contact your local Bentleys audit and assurance advisor.

We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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