Clarity in corporate reporting - July 2026 monthly newsletter

Tier 2 entities need to prepare for transition to new requirements from 1 July 2030, early adoption may be attractive for some entities    

The Australian Accounting Standards Board (AASB) has issued Exposure Draft ED341, proposing amendments to AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities to align the presentation and classification requirements with those in AASB 18 Presentation and Disclosure in Financial Statements.

The exposure draft is issued in response to stakeholder feedback on an earlier consultation which indicated that the presentation and disclosure requirements of AASB 1060 should be aligned with those in AASB 18 through a separate project.  

The exposure draft is being fast-tracked and is open for comment for a 60-day period ending 24 August 2026. The AASB expects to finalise the amendments before the end of 2026, with the proposed new requirements applying to annual reporting periods beginning on or after 1 July 2030, with early application permitted. Early adoption might be attractive for certain entities, e.g. subsidiaries (preparing Tier 2 financial statements) of Tier 1 reporters.

Under the proposed amendments, Tier 2 entities would, consistent with AASB 18:

• Present five categories in the statement of profit or loss (operating, investing, financing, income taxes and discontinued operations)
• Present totals and subtotals in the statement of profit or loss for ‘operating profit or loss’, ‘profit or loss before financing and income taxes’ and ‘profit or loss'
• Apply newly introduced principles on grouping transactions and other events into the line items required to be presented in the primary financial statements, as well as guidance on labelling and describing those items
• Classify dividends paid as a financing cash flow
• Classify interest paid as a financing cash flow and interest and dividends received as an investing cash flow (except where the entity has a specified main business activity of investing in assets or providing finance to customers).

To ensure that AASB 1060 remains a ‘one-stop-shop’ Standard, it is proposed that application guidance from AASB 18 be included in a new Appendix B to AASB 1060, using the same paragraph numbering as Appendix B to AASB 18.

Based on our experience to date with Tier 1 and global entities transitioning to AASB 18, initial application gives rise to a range of interpretational, systems and governance considerations.

Furthermore, standard-setting activity is continuing, with the IFRS Interpretations Committee publishing many agenda decisions on IFRS 18 and the International Accounting Standards Board (IASB) issuing amendments to IAS 28 Investments in Associates and Joint Ventures to address IFRS 18 transitional issues (see quick update below).

Accordingly, we recommend that Tier 2 entities familiarise themselves with the proposals and begin planning for implementation of the revised presentation and disclosure requirements.

More information:

• AASB ED 341 Updating AASB 1060 to Align the Classification and Presentation Requirements with AASB 18
• AASB media release
• Deloitte iGAAP in Focus IASB publishes new standard on presentation and disclosure in financial statements
• Deloitte iGAAP in Focus Preparing for the application of IFRS 18
• ITC 56 Post-implementation Review of Tier 2 and Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities and Further Update of Tier 2.

Amendments to fair value option in IAS 28

The IASB has issued targeted amendments to IAS 28 Investments in Associates and Joint Ventures clarifying eligibility for the fair value option in measuring associates and joint ventures. 

Entities must apply these amendments concurrently (i.e. at the same time and on the same basis) with IFRS 18 Presentation and Disclosure in Financial Statements, resolving stakeholder interpretation issues.

The amendments to IAS 28 clarify that an entity that has a main business activity of investing in particular types of assets (as set out in IFRS 18:49(a)) is a ‘similar entity’ eligible to apply the fair value option in IAS 28.

Further information:

• Media release
• Amendments to the Fair Value Option for Investments in Associates and Joint Ventures (Amendments to IAS 28)
• Deloitte iGAAP in Focus IASB finalises amendments to the fair value option for investments in associates and joint ventures

Federal government merges AASB, AUASB and FRC into new ‘External Reporting Australia’

The Treasury Laws Amendment (Financial Reporting System Reform) Act 2026 was passed by Parliament in late June and received Royal Assent shortly thereafter. This Act implements the Federal Government's intention of merging the AASB, AUASB and FRC into a new body, External Reporting Australia (ERA). ERA will have a governance council and standard-setting boards dealing with accounting standards, auditing and assurance standards and sustainability standards. This measure will effectively split the AASB into two separate standard-setting boards - one each for accounting standards and sustainability standards.

The new arrangements will come into effect on 1 December 2026.

GHG Protocol Land Sector and Removals Guidance

Greenhouse Gas (GHG) Protocol released the Land Sector and Removals (LSR) Guidance, a companion resource to the Land Sector and Removals Standard, providing companies practical detail on how to account for and report GHG emissions and CO₂ removals from agricultural land use and emerging CO₂ removal technologies.

The LSR Guidance supports corporate implementation of the LSR Standard – which outlines the accounting and reporting requirements, recommendations and options – through worked examples, equations and calculation guidance featuring 10 corporate case studies. An overview of the content can be found in the LSR Executive Summary.

In tandem with the LSR Guidance, GHG Protocol is publishing two supplemental resources to assist corporate reporters in preparing their GHG inventory: a sample reporting template and a reporting requirements checklist. 

The LSR Standard and Guidance take effect on 1 January 2027.