Register / AASB 18 Presentation and Disclosure in Financial Statements / AASB 18 paragraph AusB80.1
Test expense line items against the entity operations or principal activities
When the entity applies the paragraph B80(a) test about what drives its results, it considers which line items give the most useful information about its operations or principal activities.
Why the paragraph exists
A not-for-profit does not measure profitability in the same way. The test is redirected to the work the entity actually does.
In practice
Name the operations or principal activities in the rationale. A generic reference to profitability drivers does not answer the not-for-profit version of the test.
Where the entity runs several programmes, say which line items let a reader see the cost of each. That is the practical content of the test.
The mistake to avoid
The common mistake is to copy a for-profit cost of sales rationale into a charity's expense note.
Who it binds
A not-for-profit entity applying the paragraph 78 expense presentation requirement.
What to do before the date
- Confirm the entity falls in this group: NFP private sector, NFP public sector and NFP higher education provider.
- Put the requirement into the financial statements preparation plan: test expense line items against the entity operations or principal activities.
- Open a workpaper for the first evidence item: The expense line item rationale that names the operations or principal activities and why the chosen lines inform them.
Evidence an auditor will ask for
Dates
| Date | What it means | Applies to |
|---|---|---|
| 2027-12-31 | The instrument commences for this paragraph | NFP private, NFP public sector, NFP higher education |
| 2028-01-01 | First annual periods beginning on or after this date apply the Standard | NFP private, NFP public sector, NFP higher education |
Commencement and application are separate tests.
Cross-references
- AASB 18 paragraphs 78, B80 and Aus78.2
Record note
A public sector entity that elects the Aus78.2 relief does not apply paragraph 78 or B80 to B82, so this paragraph drops away with them.
Questions
What does AASB 18 paragraph AusB80.1 require in practice?
Name the operations or principal activities in the rationale. A generic reference to profitability drivers does not answer the not-for-profit version of the test.
What is the common mistake under AASB 18 paragraph AusB80.1?
The common mistake is to copy a for-profit cost of sales rationale into a charity's expense note.
What evidence should be kept?
At least: The expense line item rationale that names the operations or principal activities and why the chosen lines inform them. The kit carries each one as a row with an owner column to complete.
Source
This page is our statement of the paragraph, cited so you can check it. Read F2026L01162 on legislation.gov.au.
Source pointer: AASB 18 paragraph AusB80.1. Record retrieved 2026-10-20.