Reduced Disclosure Requirements (RDR)

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Simpler Financial Reports

The Australian Accounting Standards Board (AASB) have introduced standards that will reduce the disclosure requirements for certain entities preparing “general purpose financial statements” (financial statements that comply with all Australian Accounting Standards).

As the name would suggest, this will enable preparers of “general purpose financial statements” to prepare financial statements that continue to comply the recognition and measurement criteria (i.e. the balances are prepared in accordance with current Australian accounting standards) whilst permitting preparers to omit certain disclosures normally required to be included in “general purpose financial statements”. This may remove disclosures in the notes to the financial statements which may not be useful to users of the financial statements. This will ensure the account balances contained in financial statements are consistently prepared whilst providing relief to certain disclosures in the notes the financial statements

Who can apply RDR?

Entities can adopt RDR if they are required to prepare of “general purpose financial statements” and they are one of the following:

  • for-profit private sector entity that does not have public accountability, or
  • not-for-profit private sector entity

Public Accountability means ”accountability to those existing and potential resource providers and others external to the entity who make economic decisions but are not in a position to demand reports tailored to meet their particular information needs.”

Some specific examples of when an entity is publicly accountable:

  • Its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (i.e. Listed on a stock exchange);
  • It holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses (i.e. Banks, insurance companies)

Decision to adopt RDR?

Where an entity meets the eligibility criteria set out above they can choose to adopt RDR whenever they like. We recommend that any decision in relation to the financial reporting framework of an entity be discussed by the Board to ensure that the financial statements continue to meet the needs of the users of the financial statements. Any decision to change financial reporting framework should be made by resolution of the Board.

Disclosure items that can generally be omitted under RDR

The Australian accounting standards have been revised to highlight (in grey) any disclosures which are not required to be included in financial statements prepared under RDR.

The following is a list of some of the key disclosures not required under RDR. There are approximately 3,000 disclosures which are not required in financial statements prepared in accordance with RDR including:

  • Detailed narrative disclosures arising from AASB 7 Financial Instruments – Disclosures such as:
    • Nature and extent of risks arising from financial instruments
    • Standards on issue but not yet effective
  • Australian disclosure additional to IFRS requirements
    • Audit fees
    • Franking credits
    • Capital commitments in year bands
  • Supplementary information regarding key transactions, balances and events:
    • Financial information about associates and joint ventures
    • Alternate presentation of profit or loss information
    • Impairment
    • Defined benefit plan liabilities
  • Most disclosures required by various Interpretations
  • Prior year comparatives for movement schedules concerning:
    • Share-based payments
    • Property, plant and equipment
    • Intangibles
    • Investment property
  • Reconciliation of net profit to operating cash flows
  • Company details

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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