Date posted: 22/11/2021

NFPs and Simplified Disclosures

Simplified Disclosures will replace ‘reduced disclosures’ and will be applicable to both the for-profit and not-for-profit sectors.

In brief

  • Simplified Disclosures have been introduced into legislation with AASB 1060
  • They apply to financial years commencing on or after 1 July 2021
  • NFPs need to be aware of the changes in order to apply them to the next financial report

Simplified Disclosures have been introduced into legislation with AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.  They apply to financial years commencing on or after 1 July 2021.

This standard has replaced the existing ‘Reduced Disclosure Regime’ (RDR) which will no longer be able to be adopted for Tier 2 general purpose financial statements from this date.
Kerry Hicks FCA, Pitcher Partners’ technical standards director, explains that NFPs need to be aware of the changes in order to apply them to the next financial report.

NFPs need to be aware of the changes in order to apply them to the next financial report

Kerry says, “Instead of preparing financial statements that comply with the reduced disclosure requirements, NFPs will need to prepare accounts that comply with the AASB’s new simplified disclosure standard (AASB 1060).”

Simplified Disclosures are the new kid on the block. They will replace ‘reduced disclosures’ and will be applicable to both the for-profit and not-for-profit sectors.  This article describes the what, who, when and how of simplified disclosures as they are relevant to NFPs and answers some frequently asked questions.