In this blog, we summarise Queensland Treasury’s major changes in its 2024–25 Financial Reporting Requirements for Queensland Government Agencies (FRRs) and its Non-Current Asset Policies for the Queensland Public Sector (NCAPs) for this year. Treasury released these on 28 June 2025. This advice is for the preparers of the financial statements for whole-of-government reporting entities, those charged with governance at those entities, and users of their financial statements.

Departments and statutory bodies, including hospital foundations, must comply with the FRRs and NCAPs, which are now available on Treasury’s website. It also includes a summary of noteworthy changes.

The FRRs, illustrative financial statements, and NCAPs are good resources even if your entity doesn’t need to follow them (for example, local governments, government owned corporations, or universities). This is because they demonstrate how to apply the accounting standards in a public sector environment.

Accounting policies and estimates

There are a few new material accounting standard and policy changes that Queensland Treasury requires entities to implement this financial year.

AASB 2022-10 Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities (AASB 13) is now in effect. This amendment provides additional guidance for public sector entities when they apply the replacement cost valuation approach. Agencies should ensure they follow the updated guidance when undertaking their valuations.

Queensland Treasury has issued updated NCAPs, and the substantive policy change relates to third-party costs (NCAP section 1.4.4.).

We want to highlight 2 key changes for entities that are constructing assets for another public sector entity. The constructing agency can capitalise its constructions costs where either:

1. there is genuine uncertainty about who will have ultimate ownership and control of the asset being constructed. The constructing agency is permitted to capitalise the third-party construction costs as work-in-progress pending a future decision around ownership and control being made, or
2. the recipient entity who controls the asset is not a Queensland Government entity consolidated into whole-of-government financial statements, but the constructing agency has obtained approval from Queensland Treasury to capitalise construction costs as work-in-progress.

We encourage agencies to consider the intent of the construction project. Major capital projects undertaken in the public sector are for the benefit of the public. It is appropriate that there is clarity on the difference between operational expenditure and capital expenditure; and that readers of the financial statements can understand the difference. In many instances, expensing these costs does not provide more useful information to readers of the financial report on the entity’s operations.

If you are undertaking a capital project that includes constructing assets for other entities, please review the changed policy to determine the effect on you and talk to your QAO engagement leader. This includes whether the construction is for another entity within whole-of-government or outside such as local government.

Queensland Treasury has made a minor amendment to FRR 4C – Employee Benefits to address the updates to AASB 101 Presentation of Financial Statements. These updates to the standard no longer require the right to defer settlement of the liability beyond 12 months to be unconditional for it to be classified as non-current (for example, employees’ long service leave). 

Climate reporting and climate-related risks

FRR section 1.5 Climate-Related Risks and Financial Reporting has been updated for the latest international and Australian developments around climate-risk reporting, as well as Queensland Treasury’s reporting requirements.

At the Queensland Audit Office’s (QAO) client technical update event in February this year, and consistent with its approach last year, Queensland Treasury reiterated that agencies are not to publish any sustainability or climate reports without first consulting Queensland Treasury. Nor are they to adopt sustainability/climate standards that the Australian Accounting Standards Board (AASB) has issued, or to adopt other international sustainability/climate frameworks by other global organisations (including standards the International Sustainability Standards Board has issued).

Agencies required to report under the Corporations Act 2001 should contact Queensland Treasury ahead of publishing any information.

We encourage all Queensland government entities to:

• understand their reporting requirements
• follow any Queensland Treasury developments, including any relating to the measurement and reporting of greenhouse gas emissions
• consider the potential impacts on their financial statements and operations.

New accounting standards affecting future financial years

FRR section 1.4 includes new or updated sections for future financial years:

• AASB 17 Insurance Contracts and AASB 2022-9 Amendments to Australian Accounting Standards – Insurance Contracts in the Public Sector, which commences financial years beginning on or after 1 July 2026.
• AASB 18 Presentation and Disclosure in Financial Statements will be effective for the public sector from 1 January 2028 for not-for-profit entities, and 1 January 2027 for for-profit entities. The AASB is currently undertaking outreach on application to the public sector and may amend what has been issued. Queensland Treasury will provide further updates to agencies that the new standards and any changes impact on.

You should consider whether these changes are likely to affect your agency.

We hope this blog provides a useful overview on the latest FRRs and NCAP changes.

Resources

• Queensland Treasury: Financial Reporting Requirements for Queensland Government Agencies and Summary of noteworthy changes
• Queensland Treasury: Non-Current Asset Policies for the Queensland Public Sector and Summary of noteworthy changes