Audit Lowe Down – Are Special Purpose Financial Statements Still Acceptable for Not-For-Profit (NFP) Entities?

Lowe Lippmann Chartered Accountants

Are Special Purpose Financial Statements Still Acceptable for Not-For-Profit (NFP) Entities?


Following on from our post 23rd October 2024 which addressed special purpose financial statements in relation to for-profit entities, we have received a number of questions regarding the same topic for not-for-profit entities.


Not-for-profit entities may continue to choose to prepare Special Purpose Financial Statements (SPFS) if they assess themselves as non-reporting entities. Per Statement of Accounting Concepts 1 (SAC 1), a non-reporting entity is one where users, such as donors, members, creditors, or regulators, are not reliant on general-purpose financial reports for making decisions. This assessment is not static; it must be revisited annually by the governing body to ensure it remains accurate.


Although NFPs self-assess their reporting status, it is crucial to remember that there may be legislation governing financial statements which can vary depending on the type of entity, the State of incorporation and ACNC registration. For instance, SPFS prepared under the ACNC Act must comply with either:

  • The full presentation and disclosure requirements in the compulsory standards for SPFS listed in section 60.30 of the ACNC Regulations (AASB 101, AASB 107, AASB 108, AASB 124, AASB 1048, AASB 1054) or
  • the relevant paragraphs from AASB 1054 and AASB 1060 being paragraphs 8, 11, 14-103, 106-110, 189-203 of AASB 1060 and paragraphs 1 to 6, 9, 9A, 9B and 17 of AASB 1054.


The Australian Accounting Standards Board (AASB) is also developing a new Tier 3 standard specifically for smaller not-for-profits, we are expecting an exposure draft of the proposals by the end of 2024. This upcoming standard and proposed changes to the Conceptual Framework aims to simplify reporting requirements while mandating general purpose financial statements for more NFPs.


In conclusion, while SPFS might still be permissible, not-for-profits should carefully assess their reporting obligations and the needs of their users to ensure that your financial reporting remains relevant, compliant, and transparent while serving the best interests of your organisation and its stakeholders.


Monitoring the proposed developments from the AASB will allow you time to prepare for changes that might be needed.


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

Liability limited by a scheme approved under Professional Standards Legislation


Audit Lowe Down – How do we account for the costs incurred when acquiring an asset?

August 26, 2025
How do we account for the costs incurred when acquiring an asset? When we acquire an asset such as property, plant and equipment, intangibles or inventory there are often significant other costs incurred as part of the purchase process, including delivery, stamp duty, installation fees. Whether we capitalise these to the value of the asset or expense them as incurred can make a significant difference to an entity’s reported position or performance. Since we have accounting standards for specific assets, the treatment can vary depending on the asset and the relevant standard. A summary of some common expenses and their treatment under four accounting standards has been included below. The four standards considered are: AASB 102 Inventories AASB 116 Property, Plant and Equipment AASB 138 Intangible Assets AASB 140 Investment Property.

Audit Lowe Down – What are contract assets and contract liabilities that arise under the revenue accounting standards?

August 12, 2025
What are contract assets and contract liabilities that arise under the revenue accounting standards? Deferred revenue, accrued revenue, revenue received in advance, contract assets, contract costs asset, contract liabilities and receivables are all line items we see in the balance sheet in relation to revenue. It can be confusing to understand what these terms mean and whether different words are being used for the same thing.  We have provided a guidance to these and similar terms to enable you to use them confidently and understand their meaning in a balance sheet.

Practice Update – August 2025

August 6, 2025
Paid parental leave changes have now commenced As from 1 July 2025, the amount of Paid Parental Leave available to families increased to 24 weeks, and the amount of Paid Parental Leave that parents can take off at the same time has also increased from two weeks to four weeks. Superannuation will now also be paid on Government Paid Parental Leave from 1 July 2025, at the new super guarantee rate of 12%, paid as a contribution to their nominated superannuation fund. Parents will also benefit from an increase in the weekly payment rate of Paid Parental Leave, increasing from $915.80 to $948.10 (in line with the increase to the National Minimum wage). This means a total increase of $775.20 over the 24-week entitlement.
More Posts