Regulatory Reset: Large Company Thresholds to Double by 2027

What is changing?

• Revenue threshold: Doubling from $50 million to $100 million

• Asset threshold: Doubling from $25 million to $50 million

• Employee threshold: Staying at 100

These changes would come into effect for financial years starting on or after 1 July 2027. For many, this could mean less red tape and more room and free cash flow to focus on growth.

Why does it matter?

Fewer proprietary companies would have to prepare audited annual financial reports, directors' reports and sustainability reports. The same thresholds decide which companies fall within mandatory sustainability reporting, so some smaller public companies would also leave that regime, although those public companies would still have to do financial reporting.

Groups with deeds of cross guarantee

Many corporate groups use a deed of cross guarantee so their subsidiaries don't have to lodge their own audited accounts. In return, each company guarantees the debts of the others in the group. This relief is only available to public companies and large proprietary companies.

Under the new thresholds, some subsidiaries will become small. They will no longer need the deed to avoid reporting, but they stay liable under the guarantee until they are formally released. Groups will need to decide whether to release them, or keep them in the deed if they expect to grow back above the thresholds.

What should you be thinking about?

1. Run the numbers now. Test each group entity against the new $100 million revenue and $50 million asset thresholds, using FY2027-28 forecasts.

2. Remember the tests are consolidated. Revenue and assets include the entities a company controls, so the result may differ between a holding company and its subsidiaries.

3. Review your deed of cross guarantee. Identify which entities will no longer need relief. Then decide whether to keep them in the closed group, given that the guarantee exposure continues, or release them by revocation deed.

4. Revisit sustainability reporting plans. Some entities preparing for climate reporting may no longer be caught.

5. Have your say. Submissions to Treasury close on 2 November 2026.