OCBOA Explained: Other Comprehensive Basis of Accounting in Australia (2025 Guide)

OCBOA—or Other Comprehensive Basis of Accounting—is a mouthful, but it’s a term every Australian business owner or finance professional should understand in 2025. As regulatory pressure and reporting expectations continue to evolve, OCBOA is back in the spotlight for SMEs, not-for-profits, and even family trusts seeking alternative ways to present their finances. But what exactly is OCBOA, and how does it fit into Australia’s accounting landscape?

What Is OCBOA, and Why Does It Matter?

At its core, OCBOA refers to accounting methods that differ from generally accepted accounting principles (GAAP)—in Australia, that means anything outside the Australian Accounting Standards Board (AASB) framework. OCBOA encompasses bases like cash-basis accounting, tax-basis accounting, and even modified cash or accrual methods. These alternative frameworks can be attractive for entities not required by law to use full AASB standards, offering simplicity and cost savings.

In 2025, OCBOA is getting renewed attention due to two main factors:

• Regulatory Modernisation: ASIC and the ATO continue to tighten reporting requirements for larger entities, but smaller enterprises (especially those under revenue thresholds) can still opt for OCBOA where allowed.

• Technology Adoption: Cloud accounting software now supports multiple bases, making OCBOA more accessible and auditable.

OCBOA vs. AASB: Key Differences and Use Cases

OCBOA is often chosen by entities that want to:

• Avoid the complexity and cost of full AASB-compliant financials

• Meet specific user needs (like banks or stakeholders who prefer tax-basis statements)

• Comply with trust deeds or partnership agreements that specify non-GAAP reporting

Here’s how OCBOA stacks up against standard Australian accounting frameworks:

| Aspect | OCBOA | AASB/GAAP | |

| Complexity | Lower | Higher | |

| Cost | Lower—less need for external consultants | Higher—requires professional advice | |

| Auditability | Acceptable for some users (e.g. lenders) | Universal acceptance | |

| Suitability | SMEs, trusts, not-for-profits | Listed companies, large enterprises | |

For example, a family trust managing residential property in Victoria may keep its books on a tax-basis OCBOA, aligning with its annual tax return and trustee reporting requirements. Meanwhile, a small charity might use cash-basis OCBOA for its donor reports, as permitted by the Australian Charities and Not-for-profits Commission (ACNC) for certain revenue thresholds.

2025 Policy Updates: What’s New for OCBOA?

This year, several developments are shaping how OCBOA is used across Australia:

• ASIC’s Reporting Thresholds: As of July 2025, the revenue threshold for simplified reporting under ASIC has been indexed, meaning more small companies can opt for OCBOA-compliant financials (subject to their stakeholders’ needs).

• ACNC Reporting Relief: The ACNC has reaffirmed that charities with annual revenue under $500,000 may use cash accounting, a common OCBOA method, for their annual information statements.

• Tax Office Guidance: The ATO’s 2025 guidance clarifies that entities preparing special purpose financial statements (SPFS) for tax lodgment may use OCBOA, provided disclosures are clear and consistent.

• Digital Transformation: Leading cloud platforms like Xero and MYOB now offer explicit OCBOA reporting templates, making it easier for accountants to generate compliant statements.

However, it’s not a free-for-all. If your business grows or attracts investors, you may eventually need to migrate to AASB standards. That’s why it’s crucial to document your basis of accounting and stay across policy updates.

Pros, Cons, and Practical Tips for Using OCBOA

Is OCBOA right for your business or organisation? Consider these:

• Pros: Cost-effective, simpler reporting, tailored to users’ needs, and often sufficient for small-scale lending or compliance.

• Cons: Limited comparability, not suitable for public accountability, and may not satisfy all lenders or government grant programs.

Practical tips for 2025:

• Always clearly state your basis of accounting in financial reports.

• Consult your stakeholders (bank, ATO, charity regulators) before switching bases.

• Use modern accounting software to maintain accurate OCBOA records—many now automate cash/tax-basis reconciliations.

• Review your reporting requirements annually, as regulatory thresholds and expectations can change quickly.

The Bottom Line

OCBOA offers a practical, flexible alternative for smaller Australian entities, trusts, and not-for-profits. With regulatory changes in 2025 and improved tech tools, it’s never been easier to adopt OCBOA—just make sure it fits your situation and is clearly communicated to those who rely on your financials.