Preparing for 30 June for not-for-profits
Preparing for 30 June for not-for-profits
Not-for-profit (NFP) National leader Elizabeth Blunt recently hosted a webinar bringing together practical guidance and regulatory updates to help NFP organisations prepare for 30 June year-end financial reporting. Joined by BDO experts Fridrich Housa, Aletta Boshoff, and Stefanie Merlino, the webinar focused on Australian Accounting Standards Board (AASB) updates and regulatory changes, sustainability and impact reporting, and payroll and compliance changes including the incoming Payday Super regime.
What to focus on for financial year 2026
As 30 June approaches, regulatory expectations continue to sharpen, with a growing emphasis not just on compliance, but on the quality and clarity of financial reporting. Regulators such as ASIC continue to focus on familiar areas we have seen in the past, however expectations around quality, transparency and consistency are increasing. Key areas mentioned by ASIC include:
- Judgement and estimation disclosures
- Investment valuation methodologies
- Provisions, including restoration and decommissioning
- Consistency between financial narratives and broader reporting.
Organisations should ensure financial reporting is not only technically compliant, but also clearly articulated and aligned across all disclosures. Strong documentation, supported by robust position papers, particularly in areas requiring judgment, is becoming increasingly critical.
Challenges in NFP financial reporting
Many common financial reporting challenges in the sector remain unchanged but continue to require careful attention.
Revenue recognition remains one of the most complex areas for NFPs, particularly where funding arrangements involve multiple transfers, which also raise a matter of identifying performance obligations or where determining whether the organisation is acting as principal or agent requires significant judgement.
While not new, other key challenges include ensuring related party disclosures are complete and up to date, and accounting for mergers or collaborations which may become more common in a constrained funding environment.
ACNC findings in practice
Most recent Australian Charities and Not-for-profit Commission (ACNC) observations show while overall financial reporting quality across the sector is strong, there are still areas for improvement.
Common issues include inconsistencies between financial statements and Annual Information Statements, and the review resulted in correction of reported revenue for a number of charities. These observations and issues reinforce the importance of strengthening internal controls and review processes, validating data across reporting outputs and revisiting fundamental accounting treatments, rather than assuming prior approaches remain appropriate.
Accounting standards and future reforms
While from a technical perspective, FY26 is a relatively stable period with limited new applicable standards, there are two standards to keep in mind:
- AASB 2023-5 Amendments to Australian Accounting Standards – Lack of Exchangeability
- AASB 2026-1 Amendments to Australian Accounting Standards – Disclosures about Uncertainties in the Financial Statements.
These changes may not dramatically alter financial results for many entities, however they may increase the depth and precision of disclosures expected.
AASB 18 Presentation and Disclosure in Financial Statements
AASB 18 will introduce a shift in how financial performance is presented. It is expected to impact beyond financial statements, and may require changes to:
- General ledger structures
- Chart of accounts
- Internal reporting processes.
Although application for AASB 18 has been deferred for NFPs until 2028, organisations should not underestimate the scale of the change and start preparing for the process now.
AASB 1061 General Purpose Financial Statements – Not-for-Profit Private Sector
AASB approved the Not-For-Profit Sector Financial Reporting Framework change in relation to Tier 3 reporting, which will come into effect from 1 July 2029, with the expectation of simplified and streamlined reporting options for smaller private sector NFPs. However, the reform will also limit the ability to prepare special purpose financial statements for certain NFPs. It is time for NFP entities to now assess the potential impact of the reform and plan ahead for the mandatory application date, while monitoring the work of the AASB with regulators on the implementation of the changes.
Sustainability and why ESG is increasingly relevant for NFPs
Sustainability or environmental, social and governance (ESG) reporting, is becoming an increasingly important consideration for NFPs. While not all organisations are subject to mandatory sustainability reporting, many ESG considerations are already embedded in NFP activities, particularly across social impact and governance.
Importantly, stakeholder expectations are evolving. Donors, government bodies, and corporate partners are increasingly seeking evidence of sustainability practices and their measurable impact.
For many NFPs, the decision to focus on sustainability is no longer about compliance, but about maintaining access to funding, partnerships and talent, meaning a shift to sustainability becoming a critical part of organisational strategy.
A practical approach to getting started
Rather than attempting to address all aspects of sustainability at once, NFPs should take a focused, stakeholder-driven approach, working through the steps below:
- Assess current policies and practices
- Engage stakeholders to understand expectations and priorities
- Identify gaps between current state and priorities, and commit to meaningful steps to fill the gaps
- Measure the most relevant metrics
- Report outcomes in a clear, fit-for-purpose way.
For NFPs, the key is to prioritise what matters most - attempting to report on everything is unlikely to deliver meaningful value. Many organisations are formalising their approach through impact reporting, providing a structured way to demonstrate outcomes and communicate value to stakeholders. Effective impact reporting helps build trust, strengthen stakeholder relationships, and clearly articulate organisational purpose, our sustainability resources are available to help.
Payday Super begins 1 July 2026
From 1 July 2026, the introduction of Payday Super will move superannuation payments from a quarterly cycle to a seven business day window following each payday. This change is one of the most significant changes to superannuation compliance in decades, applying to all employers.
The reform is designed to address underpayment and delayed payment of superannuation, improving retirement outcomes for employees. For organisations, it introduces new compliance requirements and operational complexity.
The shift to Payday Super will have several impacts for NFPs, including increased administrative workload due to more frequent payments, changes to payroll and finance processes, potential cash flow implications and broader coverage, including certain contractor arrangements. This shift will also increase ATO visibility of an employer’s superannuation compliance through real-time data reporting, therefore, there is increased detection risk in the event of non-compliance.
The ATO has published guidance for employers which sets out its compliance approach during the first 12-months. This is detailed in Practical Compliance Guideline (PCG) 2026/1. While PCG 2026/1 provides a level of leniency during the 12-month transition period, which recognises the significant system and process changes required as part of implementation of payday super requirements, organisations should ensure systems, processes, and teams are prepared ahead of the 1 July commencement date.
How BDO can help
While the regulatory and reporting environment continues to evolve, the direction is clear: greater transparency, stronger governance, and more meaningful communication of impact. Organisations investing early in robust reporting processes, stakeholder engagement and operational preparedness will be better positioned for both 30 June reporting and the challenges and opportunities ahead. If your organisation is looking for assistance in navigating and preparing for reporting, contact BDO's not-for-profit team. Watch the full webinar.
This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such. The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read. The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances.
Each BDO member firm in Australia, their partners and/or directors, employees and agents do not give any warranty as to the accuracy, reliability or completeness of information contained in this publication nor do they accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it, except in so far as any liability under statute cannot be excluded.
A.C.N. 050 110 275 Ltd ABN 77 050 110 275, an Australian company limited by guarantee, is a member of BDO International Ltd, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO member firms.
© 2026 A.C.N. 050 110 275 Ltd. All rights reserved.
