AASB 18: Relief for NFPs and superannuation entities

In February 2026, we explained the Australian Accounting Standards Board’s proposals for applying AASB 18 Presentation and Disclosure in Financial Statements to Australian not-for-profit (NFP) entities and superannuation entities.

The proposals have now been finalised. In August 2026, the AASB issued AASB 2026-4 Amendments to Australian Accounting Standards – Application of AASB 18 and AASB 107 by Superannuation and Not-for-Profit Entities and Operating Cash Flow Reconciliation. The amending standard confirms that AASB 18 will apply to NFP and superannuation entities preparing Tier 1 general purpose financial statements, but with targeted relief for NFP public sector entities (other than higher education providers) and superannuation entities.

When do the amendments apply?

The amendments apply to annual periods beginning on or after 1 January 2028, with earlier application permitted if AASB 18 is also applied.

However, there is one amendment to clarify the starting point for the operating cash flow reconciliation in AASB 1039 Concise Financial Reports and AASB 1054 Australian Additional Disclosures, which applies to all entities. This change is effective for for-profit entities for annual periods beginning on or after 1 January 2027.

No relief for NFP private sector entities

NFP private sector entities preparing Tier 1 general purpose financial statements will apply AASB 18 without the presentation and disclosure relief available to NFP public sector entities.

This means that they will need to apply the new income and expense classification requirements, present the required subtotals and consider whether they use any measures in public communications that meet the definition of a management-defined performance measure (MPM).

Targeted relief for certain NFPs and superannuation entities

AASB 18 is a sector-neutral standard and, therefore, also applies to NFPs and superannuation entities. The targeted relief in AASB 2026-4 is available for NFP public sector entities (other than higher education providers) and superannuation entities and applies to certain aspects of AASB 18 and the related amendments to AASB 107 Statement of Cash Flows and AASB 1054 Australian Additional Disclosures.

Importantly, the amendments define what is meant by a ‘higher education provider’ because these entities are scoped out of the relief provided for NFP public sector entities. A higher education provider is a body approved under Division 16 of the Higher Education Support Act 2003, which includes a list of named Australian universities.
What target relief is available for NFP public sector (other than higher education providers) and superannuation entities?

The following table summarises how the targeted relief affects the AASB 18 requirements for NFP public sector entities (other than higher education providers) and superannuation entities.

Topic

AASB 18 requirements

NFP public sector (other than higher education providers)

Superannuation entities

Primary financial statements

Identifies the complete set of financial statements, being the statements of financial performance, financial position, changes in equity and cash flows.

AASB 18, paragraphs 10-11

No sector-specific modification.

The statement of changes in member benefits is also treated as a primary financial statement, including its comparative information.

AASB 1056, paragraph 12A

Statement of profit or loss

Requires every item of income and expense to be classified into the operating, investing, financing, income taxes or discontinued operations category.

AASB 18, paragraphs 48–68 and B29–B77

May elect not to classify income and expenses into the operating, investing and financing categories.

The income taxes and discontinued operations categories continue to apply.

AASB 18, paragraph Aus47.2

Must not classify income and expenses into the operating, investing and financing categories.
The AASB 1056 income statement format applies instead.

AASB 18, paragraph Aus47.1
AASB 1056 paragraph 10A

Specified main business activities

Requires an entity to assess whether investing in assets or providing financing to customers is a main business activity.

If it is, the entity has specified main business activities and classifies some income and expenses in the operating category that would otherwise be classified as investing or financing.

AASB 18, paragraph 49

If the entity applies the relief from classifying income and expenses in the operating, investing and financing categories (AASB 18, paragraph Aus47.2), it does not perform the specified main business activities assessment.

As the superannuation entity is not permitted to classify income and expenses into the operating, investing and financing categories, it does not perform the specified main business activities assessment.

Required subtotals

Requires the following mandatory subtotals:

Operating profit or loss
Profit or loss before financing and income taxes
Profit or loss.

AASB 18, paragraph 69

If the entity applies the relief from classifying income and expenses in the operating, investing and financing categories (AASB 18, paragraph Aus47.2), it is not required to present the AASB 18 subtotals for:

Operating profit or loss
Profit before financing and income taxes subtotals.

As the superannuation entity is not permitted to classify income and expenses into the operating, investing and financing categories, it does not present the subtotals for:

Operating profit or loss
Profit before financing and income taxes subtotals.

It instead presents the net result and other line items required by AASB 1056, paragraphs 9–10A.

Meaning of operating expenses

AASB 18, paragraph 75(a)(ii) requires line items for operating expenses to be disclosed in the statement of profit or loss.

Operating expenses are expenses classified in the operating category.

AASB 18, paragraph 47(a)

If the entity applies the relief from classifying income and expenses in the operating, investing and financing categories (AASB 18, paragraph Aus47.2), references to operating expenses are treated as references to expenses presented in its statement of profit or loss.

AASB 18, paragraph Aus47.2(b)

References to operating expenses are treated as references to expenses presented in the AASB 1056 income statement.

AASB 18, paragraph Aus47.1(b)

Basis of expense presentation in profit or loss

Operating expenses are required to be presented by nature, function or a combination of both, whichever provides the most useful, structured summary.

AASB 18, paragraph 78

Permitted to classify and present expenses in line items in the statement of profit or loss based on either their nature or function (not both), whichever provides reliable and more relevant information.

AASB 18, paragraph Aus78.2

Does not present expenses by nature or function. Instead, expenses are presented in accordance with AASB 1056.
AASB 18, paragraph Aus78.1

Titles of financial statements

Entities may use alternative titles for financial statements, totals, subtotals and line items, but those labels must faithfully represent the characteristics of the items.

Example: An entity may use the title ‘balance sheet’ instead of ‘statement of financial position’.

AASB 18, paragraph 11

If the entity applies the relief from classifying income and expenses in the operating, investing and financing categories (AASB 18, paragraph Aus47.2), it may use labels for a total or subtotal defined in AASB 18, even if they have a different meaning.

Example: AASB 18 defines ‘operating profit or loss’ as the total of all income and expenses classified in the operating category. A NFP public sector entity applying the relief in Aus47.2 may use the term ‘operating profit or loss’ as the label for a total of all income and expenses.

May use labels for a total or subtotal as defined in AASB 18, even if they have a different meaning.

Management-defined performance measures (MPMs)

Required to identify and disclose information about MPMs.

AASB 18, paragraphs 117-125 and B113-B142

Not required to identify and disclose information about MPMs.

AASB 18, paragraph Aus 123.1

No relief.

Required to identify and disclose information about MPMs.

AASB 18, paragraphs 117-125 and B113-B142

Line items required by other standards

A line item required by an Australian Accounting Standard need not be presented separately if it is unnecessary for the primary financial statement to provide a useful, structured summary.

AASB 18, paragraphs 23 and B8

A government applying AASB 1049 must present all relevant line items required by AASB 1049 Whole of Government and General Government Sector Financial Reporting.

AASB 18, paragraphs Aus23.2 and AusB8.2

Must present all relevant line items required by AASB 1056, including relevant line items in the statement of changes in member benefits.

AASB 18, paragraphs Aus23.1 and AusB8.1

There is also targeted relief for NFP public sector entities (other than higher education providers) and superannuation entities preparing their cash flow statements (AASB 107) and related disclosures (AASB 1054 Australian Additional Disclosures). This is shown in the table below.

Topic	AASB 107 requirements (amended as a result of the publication of AASB 18)	NFP public sector (other than higher education providers)	Superannuation entities
Dividends paid	Dividends paid are classified as cash flows from financing activities. AASB 107, paragraph 33A	Same treatment for NFP public sector entities. AASB 107, paragraph 33A	N/A as superannuation entities don’t pay dividends.
Interest paid	Entities without specified main business activities classify interest paid as cash flows from financing activities. AASB 107, paragraph 34A(a)	Permitted to classify interest paid as cash flows from operating activities. AASB 107, paragraph Aus34D.1	Permitted to classify interest paid as cash flows from operating activities. AASB 107, paragraph Aus34D.1
Interest received and dividends received	Entities without specified main business activities classify interest received and dividends received as cash flows from investing activities. AASB 107, paragraph 34A(b)	Permitted to classify interest received and dividends received as cash flows from operating activities. AASB 107, paragraph Aus34D.1	Permitted to classify interest received and dividends received as cash flows from operating activities. AASB 107, paragraph Aus34D.1
Indirect-method cash flow reconciliation starting point Note: The same starting point is used where the entity uses the direct method to present its cash flows from operating activities (see AASB 1054, paragraph 16)	Operating cash flows are to be determined by adjusting the AASB 18 operating profit or loss subtotal for various items (refer below). AASB 107, paragraph 18(b)	If the entity applies the relief from classifying income and expenses in the operating, investing and financing categories (AASB 18, paragraph Aus47.2), and does not present an operating profit or loss as defined by AASB 18, it starts with the profit or loss total presented in its statement of profit or loss. AASB 107, paragraph Aus20.1(b)	Starts with the profit or loss total presented in its AASB 1056 income statement. AASB 107, paragraph Aus20.1(a)
Reconciling items for indirect-method cash flow reconciliation	Adjust the AASB 18 operating profit or loss subtotal for: The effects of non‑cash transactions Deferrals or accruals of past or future operating cash receipts or payments (working capital adjustments) Income or expenses classified in the operating category in the statement of profit or loss for which the associated cash flows are classified as cash flows from either investing or financing activities Cash flows from operating activities for which the associated income or expenses are not classified in the operating category of the statement of profit or loss and items of income or expense associated with investing or financing cash flows. AASB 107, paragraph 18(b)	If the entity applies the relief from classifying income and expenses in the operating, investing and financing categories (AASB 18, paragraph Aus47.2), adjust the profit or loss total presented in its statement of profit or loss for: The effects of non‑cash transactions such as depreciation, provisions, deferred taxes and unrealised foreign currency gains and losses Any deferrals or accruals of past or future operating cash receipts or payments, including changes during the period in inventories and operating receivables and payables Items of income or expense associated with investing or financing cash flows. AASB 107, paragraph Aus20.1(c)-(e)	Adjust the profit or loss total presented in its AASB 1056 income statement for: The effects of non‑cash transactions such as depreciation, provisions, deferred taxes and unrealised foreign currency gains and losses Any deferrals or accruals of past or future operating cash receipts or payments, including changes during the period in inventories and operating receivables and payables Items of income or expense associated with investing or financing cash flows. AASB 107, paragraph Aus20.1(c)-(e)

What should affected entities do now?

Although the amendments do not mandatorily impact NFPs and superannuation entities until annual periods beginning on or after 1 January 2028, affected entities should start preparing now.

NFP private sector entities and higher education providers:

Assess the full effect of AASB 18 on the statement of profit or loss, cash flow statement, systems, public communications and supporting processes.

NFP public sector entities (other than higher education providers):

Decide whether to use the available presentation relief in the statement of profit or loss. This decision should be considered carefully because it will affect the structure of the financial statements, the labels used for totals and subtotals, and the starting point for the operating cash flow reconciliation.

Superannuation entities:

Assess which requirements continue to be governed by AASB 1056 and which other AASB 18 requirements apply. Also review public communications to determine whether any measures meet the definition of an MPM.

All affected entities: Consider:
- Which AASB 18 requirements apply to them
- Whether any accounting policy choices or relief will be used
- How the changes affect comparative information
- Whether charts of accounts and consolidation or reporting systems require modification
- Whether any relevant measures used in public communications are MPMs
- What information should be disclosed about the expected effect of standards issued but not yet effective?

More information

Our IFRS 18 resources provide further practical guidance on the new presentation, classification and disclosure requirements.

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