australia-bookkeeping

Section 1 -- Quick Reference

Quick Reference

Field	Value
Country	Australia (Commonwealth of Australia)
Currency	AUD ($) only
Financial year	1 July – 30 June (standard); substituted accounting period available for companies
Accounting standards	AASB (full IFRS-based); AASB 1060 Simplified Disclosures (Tier 2); Special Purpose for non-reporting entities
Governing body	Australian Accounting Standards Board (AASB)
Tax authority	Australian Taxation Office (ATO)
Key legislation	Corporations Act 2001 (financial reporting Ch.2M); Income Tax Assessment Act 1936/1997; A New Tax System (GST) Act 1999
GST registration threshold	$75,000 turnover ($150,000 for non-profits)
Small business entity threshold	Aggregated turnover < $10 million
BAS lodgement	Quarterly (most small businesses) or monthly ($20m+ turnover)

Section 2 -- Standard Chart of Accounts

Australian software (Xero, MYOB, QuickBooks) typically uses 3–4 digit codes. The structure below follows common Australian practice.

Assets (1000–1999)

Assets (1000–1999)

Code	Account	Type
1000	Cash on Hand / Petty Cash	Current asset
1010	Business Bank Account	Current asset
1020	Savings Account	Current asset
1030	Term Deposits (< 12 months)	Current asset
1050	Undeposited Funds	Current asset
1100	Accounts Receivable (Trade Debtors)	Current asset
1110	Other Debtors	Current asset
1120	Prepayments	Current asset
1150	GST Receivable (Input Tax Credits)	Current asset
1200	Inventory / Stock on Hand	Current asset
1300	Land	Non-current asset
1310	Buildings	Non-current asset
1311	Accumulated Depreciation — Buildings	Contra asset
1320	Plant and Equipment	Non-current asset
1321	Accumulated Depreciation — Plant & Equipment	Contra asset
1330	Motor Vehicles	Non-current asset
1331	Accumulated Depreciation — Motor Vehicles	Contra asset
1340	Office Equipment	Non-current asset
1341	Accumulated Depreciation — Office Equipment	Contra asset
1350	Computer Equipment	Non-current asset
1351	Accumulated Depreciation — Computer Equipment	Contra asset
1360	Furniture and Fittings	Non-current asset
1361	Accumulated Depreciation — Furniture & Fittings	Contra asset
1400	Small Business Pool	Non-current asset

Liabilities (2000–2999)

Liabilities (2000–2999)

Code	Account	Type
2000	Accounts Payable (Trade Creditors)	Current liability
2010	Other Creditors	Current liability
2020	Accrued Expenses	Current liability
2050	GST Payable (Collected)	Current liability
2060	GST Clearing / Control	Current liability
2100	PAYG Withholding Payable	Current liability
2110	Superannuation Payable	Current liability
2120	Provision for Annual Leave	Current liability
2130	Provision for Long Service Leave	Current liability
2140	Provision for Income Tax	Current liability
2200	Credit Card	Current liability
2300	Short-Term Loan (< 12 months)	Current liability
2400	Long-Term Loan (> 12 months)	Non-current liability
2410	Hire Purchase Liability	Non-current liability
2500	Director's Loan Account	Non-current liability

Equity (3000–3999)

Equity (3000–3999)

Code	Account	Type
3000	Share Capital / Owner's Equity	Equity
3010	Owner's Drawings	Equity
3020	Owner's Contributions	Equity
3100	Retained Earnings	Equity
3200	Current Year Profit/Loss	Equity
3300	Reserves	Equity

Revenue (4000–4999)

Revenue (4000–4999)

Code	Account	Type
4000	Sales Revenue — Taxable (GST 10%)	Revenue
4010	Sales Revenue — GST-Free	Revenue
4020	Sales Revenue — Input Taxed	Revenue
4030	Sales Revenue — Export (GST-Free)	Revenue
4100	Service Revenue	Revenue
4200	Interest Income	Revenue
4300	Rental Income	Revenue
4400	Government Grants / Subsidies	Revenue
4500	Other Income	Revenue
4900	Discount Allowed	Contra revenue

Cost of Goods Sold (5000–5999)

Cost of Goods Sold (5000–5999)

Code	Account	Type
5000	Purchases — Trading Stock	COGS
5010	Purchases — Materials / Components	COGS
5020	Freight Inward	COGS
5030	Direct Labour	COGS
5040	Subcontractor Costs	COGS
5100	Opening Stock Adjustment	COGS
5110	Closing Stock Adjustment	COGS
5200	Import Duty and Customs	COGS

Operating Expenses (6000–6999)

Operating Expenses (6000–6999)

Code	Account	Type
6000	Rent — Business Premises	Expense
6010	Rates and Body Corporate	Expense
6020	Electricity and Gas	Expense
6030	Water	Expense
6040	Insurance — Business	Expense
6050	Repairs and Maintenance	Expense
6100	Wages and Salaries	Expense
6110	Superannuation Guarantee (11.5% from Jul 2025)	Expense
6120	Workers' Compensation Insurance	Expense
6130	Payroll Tax (state-based)	Expense
6140	Staff Training	Expense
6200	Advertising and Marketing	Expense
6210	Website and Hosting	Expense
6220	Printing and Stationery	Expense
6230	Postage and Delivery	Expense
6300	Motor Vehicle — Fuel	Expense
6310	Motor Vehicle — Registration and Insurance	Expense
6320	Motor Vehicle — Repairs	Expense
6330	Travel — Domestic	Expense
6340	Travel — International	Expense
6350	Meals and Entertainment (50% deductible FBT)	Expense
6400	Accounting and Tax Agent Fees	Expense
6410	Legal Fees	Expense
6420	Bank Charges	Expense
6430	Merchant / Payment Processing Fees	Expense
6440	Interest Expense	Expense
6500	Telephone and Internet	Expense
6510	Software Subscriptions (SaaS)	Expense
6520	Professional Subscriptions and Memberships	Expense
6600	Depreciation — Buildings	Expense
6610	Depreciation — Plant and Equipment	Expense
6620	Depreciation — Motor Vehicles	Expense
6630	Depreciation — Office/Computer Equipment	Expense
6700	Bad Debts Written Off	Expense
6800	General and Sundry Expenses	Expense

Other Income / Expenses (7000–7999)

Other Income / Expenses (7000–7999)

Code	Account	Type
7000	Gain on Sale of Assets	Other income
7010	Loss on Sale of Assets	Other expense
7020	Foreign Exchange Gain/Loss	Other income/expense
7100	Extraordinary Items	Other expense

Tax (8000–8999)

Tax (8000–8999)

Code	Account	Type
8000	Income Tax Expense	Tax
8010	Deferred Tax Liability	Tax
8020	Deferred Tax Asset	Tax

Section 3 -- Revenue Recognition

Cash vs Accrual Rules

Cash vs Accrual Rules

Criterion	Cash Basis (Sole Traders / Small Business)	Accruals Basis
Eligibility	Aggregated turnover < $10m (small business entity)	All entities; mandatory for reporting entities
Income recognised	When cash received	When earned (invoice raised or goods delivered)
Expenses recognised	When cash paid	When incurred (liability arises)
Trading stock	Simplified: exempt from stock-take if change < $5,000	Required: opening/closing stock adjustments
Prepaid expenses	Immediate deduction if < 12 months and under $1,000 or business turnover < $10m	Spread over benefit period

AASB 15 Revenue from Contracts with Customers

Applies to reporting entities using Tier 1/Tier 2. Five-step model:

1. Identify contract
2. Identify performance obligations
3. Determine transaction price
4. Allocate price to obligations
5. Recognise when obligation satisfied

Small businesses using simplified reporting typically recognise on delivery/completion.

Section 4 -- Expense Classification

ATO Individual Tax Return Categories (Sole Trader — Business Schedule)

ATO Individual Tax Return Categories (Sole Trader — Business Schedule)

Item	Category	Nominal Codes
A	All other business income	4000–4500
B	Cost of sales	5000–5200
C	Contractors and commission	5040
D	Superannuation	6110
E	Bad debts	6700
F	Lease expense (plant/equipment)	6000
G	Interest expense — Australia	6440
H	Depreciation (excluding SB pool)	6600–6630
I	Motor vehicle expenses	6300–6320
J	Repairs and maintenance	6050
K	All other expenses	6000–6800 (remainder)

Non-Deductible Expenses (ATO)

• Entertainment (not subject to FBT election) — non-deductible portion
• Capital expenditure — must be depreciated or written off via SB pool
• Private portion of mixed expenses — must be apportioned
• Fines and penalties — not deductible
• Clothing (non-compulsory, non-protective) — not deductible
• Traffic infringements — not deductible

GST Classification for BAS

GST Classification for BAS

GST Code	Description	BAS Label
GST (10%)	Standard taxable supply	G1, 1A
GST-Free	Food (basic), medical, education, exports	G1 (no 1A)
Input Taxed	Financial supplies, residential rent	G1 (no credit)
BAS Excluded	Wages, drawings, loan principal, private	Not reported
No ABN Withholding	Payments to suppliers without ABN (49% w/h)	Separate

Section 5 -- Asset vs Expense Thresholds

Instant Asset Write-Off (IAWO)

Instant Asset Write-Off (IAWO)

Period	Threshold	Eligibility
1 Jul 2023 – 30 Jun 2026	< $20,000 per asset	Aggregated turnover < $10m, using simplified depreciation
Permanent (from 1 Jul 2026)	< $20,000 per asset	Announced in 2026 Budget — made permanent

Small Business Pool (Simplified Depreciation)

Small Business Pool (Simplified Depreciation)

Pool	Rate	Notes
Year 1 (first use)	15%	On cost (or adjustable value if added later)
Subsequent years	30%	On opening pool balance
Pool balance < IAWO threshold	Write off entire pool	End-of-year check

General (Non-SB) Depreciation

General (Non-SB) Depreciation

Method	Application
Diminishing value	rate = days held ÷ 365 × (200% ÷ effective life)
Prime cost (straight-line)	rate = days held ÷ 365 × (100% ÷ effective life)

Common Effective Lives (ATO TR 2025/1 basis)

Common Effective Lives (ATO TR 2025/1 basis) (ATO TR 2025/1)

Asset	Effective Life	DV Rate	PC Rate
Desktop computers	4 years	50%	25%
Laptops	4 years	50%	25%
Printers/Scanners	5 years	40%	20%
Office furniture	10 years	20%	10%
Motor vehicles	8 years	25%	12.5%
Air conditioning	10 years	20%	10%
Buildings (general)	40 years	5%	2.5%

Car Limit

• Car cost limit for depreciation (2025–26) — $69,674 AUD (Only the business-use portion of this amount can be depreciated)

Section 6 -- P&L Format

Income Statement (AASB Simplified / Tier 2)

STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 20XX
                                            $           $
Revenue                                               xxx
Cost of sales                                        (xxx)
                                                     ────
Gross profit                                          xxx

Other income                                          xxx

Expenses:
  Employee benefits expense               (xxx)
  Depreciation and amortisation           (xxx)
  Finance costs                           (xxx)
  Other expenses                          (xxx)
                                                     (xxx)
                                                     ────
Profit before income tax                              xxx
Income tax expense                                   (xxx)
                                                     ────
Profit for the year                                   xxx
                                                     ════

Sole Trader — ATO Business Schedule Format

BUSINESS INCOME
  Gross payments subject to withholding       xxx
  All other business income                   xxx
  TOTAL BUSINESS INCOME                       xxx

BUSINESS EXPENSES
  Cost of sales                              (xxx)
  Contractor/subcontractor/commission        (xxx)
  Superannuation expenses                    (xxx)
  Bad debts                                  (xxx)
  Lease expenses within Australia            (xxx)
  Interest expenses within Australia         (xxx)
  Depreciation expenses                      (xxx)
  Motor vehicle expenses                     (xxx)
  Repairs and maintenance                    (xxx)
  All other expenses                         (xxx)
  TOTAL BUSINESS EXPENSES                    (xxx)

NET INCOME OR LOSS FROM BUSINESS              xxx

Section 7 -- Balance Sheet Format

Statement of Financial Position (Vertical — AASB Tier 2)

STATEMENT OF FINANCIAL POSITION
As at 30 June 20XX
                                            $           $
CURRENT ASSETS
  Cash and cash equivalents                           xxx
  Trade and other receivables                         xxx
  Inventories                                         xxx
  Other current assets                                xxx
                                                     ────
Total current assets                                  xxx

NON-CURRENT ASSETS
  Property, plant and equipment                       xxx
  Intangible assets                                   xxx
  Other non-current assets                            xxx
                                                     ────
Total non-current assets                              xxx
                                                     ────
TOTAL ASSETS                                          xxx
                                                     ════

CURRENT LIABILITIES
  Trade and other payables                            xxx
  Current tax liabilities                             xxx
  Provisions (annual leave, etc.)                     xxx
  Short-term borrowings                               xxx
                                                     ────
Total current liabilities                             xxx

NON-CURRENT LIABILITIES
  Long-term borrowings                                xxx
  Provisions (long service leave)                     xxx
                                                     ────
Total non-current liabilities                         xxx
                                                     ────
TOTAL LIABILITIES                                     xxx
                                                     ════

NET ASSETS                                            xxx
                                                     ════

EQUITY
  Issued capital                                      xxx
  Retained earnings                                   xxx
  Reserves                                            xxx
                                                     ────
TOTAL EQUITY                                          xxx
                                                     ════

Section 8 -- Bank Reconciliation Patterns

Common Australian Bank Formats

Common Australian Bank Formats

Bank	Export Format	Key Fields
Commonwealth Bank (CBA)	CSV, OFX, QIF	Date, Amount, Description, Balance
ANZ	CSV, OFX	Date, Description, Amount, Type
Westpac	CSV, OFX, QIF	Date, Narration, Debit, Credit, Balance
NAB	CSV, OFX	Date, Narration, Amount, Type, Balance
Macquarie	CSV	Date, Description, Amount, Balance
Bendigo Bank	CSV, OFX	Date, Description, Debit, Credit, Balance
Up Bank / Neobanks	CSV	Date, Description, Amount, Category

Common Transaction Descriptions

Common Transaction Descriptions

Pattern	Likely Classification
DIRECT CREDIT, BPAY CREDIT	Income — customer payment
EFTPOS, VISA PURCHASE, DEBIT CARD	Expense — check merchant
DIRECT DEBIT, D/D	Regular expense (insurance, subscription, utility)
BPAY	Expense — bill payment (utilities, ATO, rates)
TRANSFER, INT TFR	Internal transfer or payment — check counterparty
ATM WITHDRAWAL	Drawings (sole trader) or petty cash replenishment
INTEREST CHARGED	Interest expense (6440)
INTEREST PAID	Interest income (4200)
ATO PAYMENT, ATO IAS, ATO BAS	Tax payment — not a P&L expense
PAYROLL, WAGES	Staff costs (6100)
SUPER STREAM, SUPER CLEARING	Superannuation (6110)
XERO, STRIPE, SQUARE PAYOUT	Platform payout — match to invoices

Section 9 -- Micro-Entity / Small Business Simplifications

Small Business Entity Concessions (turnover < $10m)

Small Business Entity Concessions (turnover < $10m)

Concession	Detail
Simplified depreciation	Instant write-off < $20,000; pool balance at 15%/30%
Simplified trading stock	No stock-take if estimate change ≤ $5,000
Prepaid expenses	Immediate deduction if < 12 months and service period ends before next year
Simpler BAS	Report only G1, 1A, 1B (no G2, G3, G10, G11)
Two-year amendment period	ATO can only amend assessments within 2 years (not 4)
Cash accounting for GST	Report GST when paid/received, not invoiced
PAYG instalments	Option to pay quarterly amount the ATO calculates

Reporting Tiers

Reporting Tiers

Tier	Who	Standards	Required Statements
Tier 1 (Full AASB / IFRS)	Large proprietary companies, public companies, registered schemes	Full recognition + full disclosure	All 5 statements + notes
Tier 2 (AASB 1060 Simplified)	Non-publicly accountable entities electing Tier 2	Full recognition, reduced disclosure	All 5 statements + reduced notes
Special Purpose (legacy)	Non-reporting entities (winding down)	Flexible	Varies (being phased out by 30 Jun 2023 for large)
No statutory reporting	Sole traders, small partnerships (non-company)	None mandated	Prepare for ATO/tax purposes only

Large Proprietary Thresholds (must be reporting entity)

• Large Proprietary Thresholds — Meet 2 of 3: Revenue ≥ $50m, assets ≥ $25m, employees ≥ 100.

Section 10 -- Interaction with Tax Skills

Income Tax Return

• Sole traders: business schedule in individual return (myTax or tax agent)
• Companies: Company Tax Return (form with labels mapped to financial statements)
• Tax rate: individuals at marginal rates; companies at 25% (base rate entity, turnover < $50m) or 30%
• Franking: company tax paid generates franking credits for shareholder dividends
• Losses: carried forward indefinitely, subject to continuity of ownership test (companies) or non-commercial loss rules (individuals)

BAS / GST Return

BAS / GST Return

BAS Label	Description	CoA Mapping
G1	Total sales (incl. GST-free and input taxed)	4000–4500
1A	GST on sales	2050
1B	GST on purchases (Input Tax Credits)	1150
W1	Total salary/wages and other payments	6100
W2	Amounts withheld from payments (PAYG-W)	2100
T1	PAYG instalment income	4000–4500
T2	PAYG instalment raised	2140

Superannuation Guarantee

• Rate: 11.5% of ordinary time earnings (from 1 Jul 2025); rising to 12% from 1 Jul 2026
• Due: 28 days after end of quarter
• Nominal: 6110 (expense) / 2110 (payable)
• SG Charge: if late, lose deduction and pay additional penalties

Fringe Benefits Tax (FBT)

• FBT year: 1 April – 31 March
• Rate: 47% (top marginal + Medicare levy)
• Common items: car fringe benefit, entertainment, loan fringe benefit
• Meals/entertainment: 50/50 method available — 50% deductible for income tax, 50% subject to FBT

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