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.

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