The 2026–27 Federal Budget proposed changes to the thresholds determining whether proprietary companies must prepare audited financial reports and whether they fall within Group 3 climate reporting.
| Measure | Current | Proposed |
|---|---|---|
| Consolidated revenue | AUD 50 million | AUD 100 million |
| Consolidated assets | AUD 25 million | AUD 50 million |
| Employees | 100 | 100 |
The employee threshold would remain unchanged.
Many foreign-owned Australian subsidiaries are large proprietary companies. If enacted, the changes may allow some entities to qualify for reduced financial reporting obligations.
The same thresholds are intended to apply to Group 3 sustainability reporting, potentially reducing the number of mid-market foreign-owned entities required to prepare assured climate disclosures from the 2027–28 reporting periods.
Status: The changes were announced in the 2026 Budget but have not yet progressed to legislation.
Practical implications
Foreign-owned groups should monitor the proposals and assess their potential effect on Australian subsidiaries. Existing requirements continue to apply until the changes become law.
How we can assist
We can assess current and proposed reporting obligations, review audit and climate reporting exposure, and help subsidiaries plan for the final legislative outcome.
