Australian Financial Reporting Framework

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In Australia, there are 3 types of financial reports which can be prepared. Although some types of entities have legislative requirements which state which type of financial report they must prepare, for the most part the type of financial report prepared for each entity is determined by the requirements of the potential users of the financial report.

Users rely on General Purpose Financial Statements (i.e. Reporting Entity) Type of financial report to be prepared Accounting standards to be applied
Yes General Purpose Financial Report (GPFR) All Australian accounting standards
Yes General Purpose Financial Report – in accordance with Reduced Disclosure Requirements (RDR) Recognition and measurement criteria from all Australian accounting standards however reduced disclosure is as per AASB 1053
No Special Purpose Financial Report (SPFR) Only required to adopt the mandatory Australian accounting standards


A reporting entity is defined as an entity in respect of which it is reasonable to expect the existence of users who rely on the entity’s general purpose financial statements for information that will be useful to them for making and evaluating decisions about the allocation of resources. A reporting entity can be a single entity or a group comprising a parent and all of its subsidiaries.

It is important to understand the needs of the users of the financial report to ensure that their needs are met. It may be that the users of the financial report to not have sophisticated requirements or have readily available information about the business and therefore don’t require extensive disclosures. Alternatively, the shareholders may be isolated from the operations of the business and require detailed information about the business in order to understand its financial performance and position. In this case they may require general purpose financial statements. There may also be a requirement from your financial institution as to the type of financial report that is prepared.

Obviously, the type of financial report prepared can have a large impact on the volume of information required to be disclosed in the financial report. For example the disclosure notes in a SPFR will be significantly less than those in a GPFR.

Further questions

If you would like to discuss your entity’s audit requirements further please contact any of the following people at our office on 9551 6692, or via email:

Ryan Dummett

Director – Audit & Assurance


Andrew White

Director – Audit & Assurance


Liability limited by a scheme approved under Professional Standards Legislation Disclaimer: This publication has been prepared on the basis of information available at the date of preparation. The information is general in nature and is not to be taken as a substitute for specific professional advice. We recommend that our advice be sought on specific issues prior to acting on transactions affected.




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