What are the thresholds for Group 1, Group 2 and Group 3?

Group 1 is two of $500 million revenue, $1 billion gross assets and 500 employees. Group 2 is two of $200 million, $500 million and 250 employees, and Group 3 is two of $50 million, $25 million and 100 employees. All figures are consolidated and you test them every year.

Do we count revenue, assets or employees, and how many of the three?

Two of the three. Revenue is consolidated revenue for the financial year, while gross assets and employee numbers are measured at the end of the financial year, with part-time employees counted as a fraction of a full-time equivalent. All three tests cover the entity and every entity it controls.

We just crossed the threshold this year. Do we report this year or next?

You test the thresholds for each financial year on its own. There is no grace year and no consecutive-year requirement. If you meet two of the three tests for this financial year and your group's start date has already passed, you report for this financial year.

Glossary›Regulation, capture and thresholds / Regulation, capture and timing›Reporting thresholds (revenue / gross assets / employees)

Glossary term

Cluster B · B5

Tier 1 · differentiator

Reporting thresholds (revenue / gross assets / employees)

Definition

The reporting thresholds decide whether an entity is captured and in which group. An entity must meet at least two of three tests: consolidated revenue for the financial year, the value of consolidated gross assets at the end of the year, and the number of employees at the end of the year. All three are measured on a consolidated basis.

Corporations Act 2001

· section 292A ·

In force

On this page

In practice
What the assurer does with it
Sources
Related terms
Related questions

Cluster

B · Regulation, capture and thresholds / Regulation, capture and timing, 26 terms

In practice

The full set, all measured for the entity and the entities it controls:

Group

Consolidated revenue

Consolidated gross assets

Employees

Periods commencing on or after

Group 1

$500m or more

$1bn or more

500 or more

1 January 2025

Group 2

$200m or more

$500m or more

250 or more

1 July 2026

Group 3

$50m or more

$25m or more

100 or more

1 July 2027

Four points that decide real cases.

Two of three, not all three. An asset-light services business with $600 million of revenue and 700 staff is Group 1 even with a small balance sheet.

Consolidated means the whole group. Revenue, assets and headcount include controlled entities, measured under the accounting standards. A group of small operating companies under a common parent is tested as one entity.

Gross assets, not net assets. Debt does not reduce the figure.

The gateway comes first. Section 292A applies only to entities already required to prepare a financial report under Chapter 2M. Meeting the size test does not create a reporting obligation on its own.

How “employees” is measured for this test (headcount against full-time equivalent, and the treatment of casuals, contractors and labour hire) is not settled in public guidance and it decides marginal cases. An entity sitting near the threshold on the employee limb should get advice rather than assume a basis, because the two measures can land on opposite sides of the line.

What the assurer does with it

The threshold calculation is tested at engagement acceptance, not in fieldwork, because it determines whether an engagement exists at all and at what assurance level. The assurer expects consolidated revenue and consolidated gross assets agreed to the audited consolidated financial statements, and employee numbers agreed to a dated payroll extract with the counting basis stated on its face. They accept a calculation on consolidated audited figures with the control determinations documented. They reject single-entity figures, management accounts, an unconsolidated aggregation that adds the members without eliminations, and a headcount with no stated basis. Where the entity sits within a few per cent of a limb, expect a request for the advice on which the basis was settled.