Audit Lowe Down – Incorrect presentation of your liabilities could significantly affect your balance sheet
Lowe Lippmann Chartered Accountants
In a previous blog, we discussed the changes to the accounting standards relating to classification of current / non-current liabilities on the balance sheet.
We have been receiving a number of questions on this topic and have provided some practical scenarios below as well as some actions for you as we approach 30 June reporting dates.
| Scenario | Current / non-current | Actions for consideration |
|---|---|---|
| Borrowing facility is expiring within 12 months of the reporting date. | Current | Obtain written evidence from the bank prior to reporting date that the facility will be extended and the appropriate terms and conditions. |
| Breach of a bank covenant reported prior to year end but no response from financial institution at reporting date. | Current | Obtain written evidence from the bank prior to reporting date that the covenant breach is either subject to a period of grace of at least 12 months from the reporting date or is subject to a waiver. |
| Breach of a bank covenant as at reporting date reported to the financial institution after year end. | Current | No action possible if breach not reported until after reporting date since not possible to obtain waiver / period of grace prior to the reporting date. |
| Likely to breach a covenant after the year end. | n/a | Not assessed as part of current / non-current presentation but disclosure of existence of covenant and likely breach is required. Communicate with financial institution as soon as possible to include likely outcome (if waiver or period of grace) in the disclosure. |
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
Tax Alert - Legislation restricting SMSFs using residential property LRBAs has now passed Parliament
Legislation restricting SMSFs using residential property LRBAs has now passed Parliament The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 ( the Reform No 1 Bill ) was passed by Parliament on Thursday 25 June 2026. Schedule 5 of the Reform No 1 Bill amends section 67A of the Superannuation Industry (Supervision) Act 1993 to restrict future limited recourse borrowing arrangements ( LRBAs ) on real property to investments in “business real property” (as defined in section 66 of the SIS Act). Residential property of any kind is excluded from the definition of “business real property” in section 66 of the SIS Act. We note this also excludes newly constructed residential property, which is a distinction at odds with recent exemptions being given to new-builds with other Budget Night tax changes relating to negative gearing and restricting the CGT 50% discount. Super funds are not generally allowed to borrow for investments, but there has been a concession allowing a self-managed super fund ( SMSF ) to borrow money to buy single assets like property, if their loans were set up in line with particular requirements, known as LRBAs. This change means an SMSF will not be able to borrow to buy residential property after the start date of these changes.
A strategy often used to reduce taxable income (and, in turn, tax payable) in an income year is to bring forward any expected or planned deductible expenditure from a later income year. However, any individuals with potentially reduced income for the 2026 tax season may want to instead consider deferring any deductible expenditure (if possible).
Many business clients like to review their tax position before the end of the income year and evaluate any strategies that may be available to legitimately reduce their tax. Traditionally, year-end tax planning for profitable small businesses is based around accelerating deductions and deferring income. The Year End Checklist in the link below explains some common strategies that may be considered for all business taxpayers.
