Not-for-Profit Financial Reporting in 2026

Not-for-profit financial reporting depends on your client’s charity registration, legal entity and reporting obligations. Establish those first, then prepare the required accounts, arrange assurance and obtain governing-body approval before lodgement.

Identify the Client’s Reporting Route

Identify the legal entity and charity registration separately before deciding who receives the report. A not-for-profit company can also be a registered charity. An incorporated association can be registered with the Australian Charities and Not-for-profits Commission (ACNC) while retaining obligations under its state or territory law.

Record the legal name, ABN, registration number and reporting period. Then match the client to the appropriate route.

Client	Reporting route to establish	Further obligations to check
Registered charity	ACNC annual reporting, subject to exemptions or approved arrangements	Entity law, governing document and funding agreements
Company without charity registration	Australian Securities and Investments Commission (ASIC) requirements for its company type	Member directions, deductible gift recipient status and applicable revenue tests
Incorporated association	Its state or territory associations regulator	Member reporting, assurance and any ACNC reporting arrangement

ASIC’s registered-charity guidance explains which company obligations move to the ACNC. Charity registration does not remove every ASIC obligation.

For a non-charitable company limited by guarantee, use ASIC’s separate reporting rules. Its small-company test differs from the ACNC’s charity-size test. The entity and registration guide explains the entity and registration route.

For associations, identify the jurisdiction before applying a revenue threshold or accepting a reviewer. For example, Western Australia’s association rules prescribe qualifications and independence for reviewers and auditors. Do not apply those qualifications nationally.

ACNC Financial Reporting Requirements

ACNC financial reporting generally requires an Annual Information Statement each reporting period, with a financial report for medium and large charities. The ACNC charity-size categories use annual revenue, not surplus or bank receipts alone.

Charity size	Annual revenue	Annual financial report	ACNC assurance requirement
Small	Under $500,000	Optional	None for the optional report
Medium	$500,000 or more, under $3 million	Required	Review or audit
Large	$3 million or more	Required	Audit

These are the general rules. A constitution or grant agreement can require accounts or an audit even where the ACNC does not. Confirm any approved exception before using it.

Basic Religious Charities still submit an Annual Information Statement but are exempt from its financial questions and the annual financial report requirement. Charitable Indigenous corporations regulated by ORIC have different reporting arrangements. Schools can also have special arrangements. Use the ACNC Annual Information Statement guidance to identify the applicable exception.

Separate the Annual Information Statement from its attachments. The statement covers activities and other organisational information as well as financial figures. It does not replace the financial statements, notes or assurance report.

Agree who supplies the activity answers, who prepares the accounts and who submits the completed statement. Reconcile its financial answers to the approved report. The usual lodgement period is six months after reporting-period end, subject to applicable arrangements or extensions.

Prepare the Not-for-Profit Financial Report

Choose the reporting framework before converting the trial balance into financial statements. Document the legal requirements and the information needs of users who cannot demand their own reports.

Under the ACNC’s reporting-entity guidance, reporting entities prepare general purpose financial statements. A charity that is not a reporting entity can prepare special purpose statements under the applicable requirements. A small revenue figure alone does not establish that choice.

Tier 2 general purpose statements use AASB 1060 simplified disclosures, with the same recognition and measurement requirements as Tier 1. Special purpose statements still have mandatory standards and disclosures. Record the basis of preparation and the accounting policies actually applied. The broader financial reporting guide covers the preparation work for company accounts.

The Australian Accounting Standards Board (AASB) has issued AASB 1061 for eligible not-for-profit private sector Tier 3 entities. This is a separate classification from ACNC size or an association’s statutory tier. The package also limits special purpose reporting for certain entities.

Before adopting Tier 3, establish that the regulator and governing document permit it. Early adoption requires the related AASB 2026-2 amendments for the same period. Use the AASB preparers’ factsheet for the operative-period boundary and transition choices. Do not mix Tier 3 accounting with selected Tier 1 or Tier 2 requirements.

Build the working papers from records that explain the balances.

• Reconcile bank accounts, receivables and payables. Tie opening balances to the prior approved report and explain every adjustment.
• Obtain donation records and grant agreements. Record restrictions, repayment clauses and outstanding performance obligations.
• Reconcile each restricted fund from opening balance through receipts and spending to its closing balance. Separate external restrictions from a committee’s own allocation of funds.
• Obtain related-party declarations and reconcile transactions and outstanding balances. Record the relationship and approvals, including transactions for which nothing is charged.
• Support asset values and lease balances. Reconcile employee entitlements to payroll records. Assess going concern and events after reporting-period end before finalising disclosures.

Under AASB 15, an enforceable grant with sufficiently specific performance obligations generally recognises revenue as those obligations are satisfied. Other grants require assessment under AASB 1058, including related liabilities and exceptions for acquiring or constructing non-financial assets. The ACNC’s standards guidance explains these distinctions.

In a fictional example, a charity receives funding restricted to training. Unspent cash remains at year-end. The restriction alone does not justify deferring all income. Read the agreement and determine the accounting treatment under the chosen framework before recording a liability.

Use a related-party register to prepare the disclosures and Annual Information Statement answers. ACNC related-party reporting differs by charity size, including reportable transactions for small charities.

Approval and Assurance Before Submission

The governing body takes responsibility for the financial report and approves the final version. Your preparation work does not transfer that responsibility to your practice.

Agree the required assurance before starting the job. A compilation engagement under APES 315 assembles financial information and does not provide assurance. A review provides limited assurance. An audit provides reasonable assurance through more extensive procedures.

For ACNC reporting, a medium charity can choose a review or audit unless another obligation requires an audit. A large charity requires an audit. Appoint an eligible independent provider and obtain the required independence declaration. The ACNC assurance guidance sets out provider qualifications and report requirements.

Use this handoff checklist before the authorised person submits the report.

1. Confirm the legal entity, registration identifiers and reporting period across the statement and every attachment.
2. Check the framework, comparative figures and basis-of-preparation note against the documented reporting decision.
3. Reconcile Annual Information Statement financial answers to the appropriate entity figures. A parent charity lodging consolidated statements uses its individual figures in the statement. Resolve unexplained differences before approval.
4. Attach the complete financial statements and notes, governing-body declaration and required assurance report.
5. Retain the approval resolution and signed documents for that exact report version. If figures change, obtain the necessary renewed approval and assurance.
6. Save the submission receipt and submitted files. Confirm which reporting obligations the lodgement satisfies and which remain open.

Take Over an Existing Reporting File

Collect the prior reporting file before accepting responsibility for unfinished obligations. Ask for the governing document, regulator records and previous financial reports, including assurance reports and lodgement receipts.

Obtain the opening trial balance and supporting reconciliations. Add grant agreements, related-party records and minutes approving prior reports. Request unresolved audit findings, regulator correspondence and details of missed reporting obligations.

Create an outstanding-work register with a specific owner and completion point for each item.

Issue	Responsible party	Evidence needed to close it
Missing grant agreement	Client’s authorised officer	Complete agreement and variations
Unreconciled opening balance	Preparer, with client records	Reconciliation and approved adjustment
Prior audit qualification	Assurance provider, with client corrective work	Evidence addressing the cause and effect on this report
Missing approval or lodgement	Governing body and authorised submitter	Approval record, submitted files and receipt

A prior special purpose report is not evidence that the same framework remains appropriate. Reassess the client’s obligations and any reporting changes for the new period.

Define the work your practice accepts in the engagement letter, including preparation, unresolved prior work and coordination with the assurance provider. Start with a recorded reporting decision and a named owner for every outstanding item.