The federal government will ask private schools to declare their income, but they will not be required to disclose the wealth they hold in assets, trusts or foundations.

As revealed in the Herald this year, schools are accumulating up to $8 million in annual surpluses, including income from trusts and donations.

Under the federal plan, schools will not be required to report any income held in the form of assets, trusts or foundations on the My School website when it is relaunched in December.

The Herald understands that Ms Firth took part in a robust discussion with her state and federal colleagues behind closed doors in Canberra on Friday. She expressed strong opposition to schools not being required to declare surpluses and money held in trusts and foundations.

The Australian Curriculum Assessment and Reporting Authority will report each school's income from state and federal governments. It will also report other sources of income.

Cranbrook School in Bellevue Hill, which advocates transparency and reports all sources of income to the Australian Securities and Investments Commission, last year reported a surplus of $3.3 million from its operations. It also reported a consolidated surplus of $8 million which included donations and bequests that would not need to be reported on the My School website.

Geoff Newcombe, the executive director of the Association of Independent Schools, NSW, said private schools should not have to report income from all sources.

''I don't think there is a lot of relevance in disclosing a school's assets,'' he said. ''It would be almost impossible to compare. We are looking at the recurrent costs of educating children.''

Angelo Gavrielatos, the federal president of the Australian Education Union, said millions of dollars kept in trusts, foundations, bequests, share portfolios and property portfolios will not be included in the financial reports on My School, presenting a ''distorting and misleading'' account of the financial resources of private schools.

He said this fell short of the level of transparency promised by Julia Gillard in 2008, when she had told Parliament: ''Only by understanding the total amount of funds at the disposal of individual schools is it possible to understand the relationship between resourcing and educational outcomes.''

The Ascham Foundation said it was able to give the Ascham School in Edgecliff $1 million for its library, building and endowment funds in 2007. Contribution to the funds are tax deductible and would not need to be declared on the My School website.

The Sydney Grammar School Foundation recorded a company profit of $652,268 in the year ended June 2009 from donations and interest income. It transferred $1.5 million to the school. Any money transferred from the foundation to the school in future would need to be declared on the My School website, but money held over would not.