Tier 3 and Tier 4 PBEs – new standards issued

Tier 3 and Tier 4 PBEs – new standards issued

Public benefit entities (PBEs) currently reporting under Tier 3 Public Benefit Entity Simple Format Reporting – Accrual or Tier 4 Public Benefit Entity Simple Format Reporting – Cash have new reporting requirements on the way.

The External Reporting Board (XRB) has issued new standards for Tier 3 and Tier 4 PBE reporters which take effect on 15 June 2023. 

The new standards are required to be applied to accounting periods that begin on or after 1 April 2024. (Earlier application is permitted for accounting periods that end after the standards take effect on 15 June 2023.)

These new standards supersede and replace the current requirements, namely Tier 3 Public Benefit Entity Simple Format Reporting – Accrual or Tier 4 Public Benefit Entity Simple Format Reporting – Cash.

You can access the new standards on the XRB website here:

What are the differences for Tier 3 entities?

The main differences between the current requirements (under Public Benefit Entity Simple Format Reporting – Accrual) and the upcoming requirements under the Tier 3 (NFP) Standards / Tier 3 (PS) Standard are as follows:

  • Aligns the terminology related to service performance reporting more closely with PBE FRS 48
    • The terms “outcomes” and “outputs” have been removed and replaced with terms that are more aligned with the Tier 2 PBE Standards Reduced Disclosure Regime (PBE Standards RDR).
    • More guidance on service performance reporting has also been added
  • Introduce a new revenue recognition model 
    • Revenue can now be deferred when there is a “documented expectation” instead of when there is a “use or return condition”.
    • It is anticipated that this new model will make it easier to defer revenue to reflect how many Tier 3 entities operate.
    • (Note – any revenue that could be deferred under the use or return condition model will still be able to be deferred under the new documented expectation model.) 
  • Allow some assets to be revalued without opting up
    • Entities are now able to revalue their property, plant and equipment, investment property, and publicly traded financial investments without needing to apply the applicable Tier 2 PBE Standard RDR.
    •  Note – entities that previously revalued their property, plant and equipment assets using a local council valuation are able to continue using these valuations in the Tier 3 (NFP) Standard/ Tier 3 (PS) Standard. 
  • Increase the number of minimum categories
    • More categories which are more clearly defined are now included on the face of the Statement of Financial Performance.
    • Due to the increased number of categories, the option to disaggregate further on the statement of financial performance has been removed.
    • Overall, this will make it easier for entities to classify their revenue and expense items and promote consistency of reporting.
    • Note – entities are still permitted to relabel the categories to use different terminology and/or provide more disaggregation in the notes to the performance report. 
  • Require entities to disclose more information about restricted and discretionary reserves
    • Enhanced disclosures are required where entities have restricted or discretionary reserves.
    • The enhanced disclosures will increase transparency over the resources available to an entity and its future plans.  


For more on the above, please contact your local BDO representative.

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