Section 1: Objective, Scope and Application (AASB1061_04-26)

The objective of this Standard is to specify proportionate, simplified financial reporting requirements for general purpose financial statements prepared by Tier 3 entities, to require the reporting of useful, consistent and transparent information by those entities in a manner that achieves an appropriate balance of costs and benefits. 

This Standard sets out the accounting for not-for-profit private sector entities that elect or are required to prepare general purpose financial statements that comply with Tier 3: Australian Accounting Standards – Simplified Accounting reporting requirements. This Standard does not apply to public sector entities.

AASB 1053 Application of Tiers of Australian Accounting Standards sets out the application of Tiers of Australian Accounting Standards for entities preparing general purpose financial statements. AASB 1053 requires not-for-profit private sector entities that do not have public accountability and that are not prohibited from applying Tier 3 reporting requirements by legislation or their constituting document or another document to, as a minimum, apply Tier 3: Australian Accounting Standards – Simplified Accounting reporting requirements in preparing their general purpose financial statements. Such entities include some charitable organisations, co-operatives and incorporated associations. Entities eligible to apply Tier 3 reporting requirements may instead elect to apply Tier 1 or Tier 2 reporting requirements in their entirety in preparing general purpose financial statements.

Examples of the types of entities to which this Standard does not apply are: 

(a)    companies listed on a stock exchange;  

(b)    governments, as defined in AASB 1049 Whole of Government and General Government Sector Financial Reporting; 

(c)    local governments; and  

(d)    entities, including departments, controlled by those governments or local governments.

A not-for-profit private sector entity that applies the Tier 3 reporting requirements under AASB 1053 shall apply this Standard. In addition, the entity shall apply the recording, measurement, presentation and transition requirements of the following Australian Accounting Standards, and any related disclosure requirements (other than transition) in AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities: 

(a) AASB 2 Share-based Payment, in relation to share-based payment arrangements; 

(b) AASB 5 Non-current Assets Held for Sale and Discontinued Operations, in relation to non-current assets held for sale except for: 

(i) financial assets within the scope of Section 10 of this Standard; and 

(ii) investment properties measured using the fair value model in Section 14 of this Standard; 

(c) AASB 6 Exploration for and Evaluation of Mineral Resources, in relation to exploration for, and evaluation of, mineral resources; 

(d) AASB 9 Financial Instruments and other applicable Australian Accounting Standards, in relation to the financial instruments listed in paragraph 10.4 of this Standard; 

(e) AASB 17 Insurance Contracts, in relation to insurance contracts issued by the entity; 

(f) AASB 119 Employee Benefits, in relation to obligations arising under a defined benefit plan; and 

(g) AASB 141 Agriculture, in relation to biological assets except for bearer plants, and agricultural produce at the point of harvest.

For legal purposes, this legislative instrument commences on 30 June 2029.