The fruitbody is a mushroom with a cap atop a central stem. The cap, up to 2 centimetres in diameter, is initially almost hemispherical and flattens with age but often retains a central hump (or umbo). The cap is dry, with radial fibrils and brown but when young is covered by a layer of white fibrils. Those tend to disappear with age, except near the margin which often stays whitish. The gills are cinnamon brown. The stem is up to 3 centimetres long and 3 millimetres wide. Its underlying colour is brown but it may have a white coating. However, handling the the stem can easily make the coating disappear.
There is a partial veil (which leaves almost no traces once the cap has expanded). There is no universal veil.
Spore print: brown.
The mushrooms appear on the ground in eucalypt forests or woodlands.
The species Inocybe serrata was first described by J.B. Cleland in 1933 (based on material collected at Mount Lofty, Adelaide) and he used the epithet serrata because of the serrate gill edges he'd seen in his specimens. He described two other species that were similar to Inocybe serrata in some features. Matheny & Bougher (see below) say that more work needs to be done to determine the number of (and differences between) the serrata-like species, hence the use of 'serrata complex' on Canberra Nature Map. They add that that the fungi in this complex "are among the most commonly collected species of Inocybaceae in Australia".
Look-alikes
Small, brown mushrooms can be found in a number of genera and a look through the many colour photographs in Matheny & Bougher's monograph shows a few Inocybe species that are somewhat similar.
Reference
Matheny, P.B. & Bougher, N.L. (2017). Fungi of Australia: Inocybaceae, ABRS, Canberra & CSIRO, Melbourne.
Inocybe 'serrata complex' is listed in the following regions:
Canberra & Southern Tablelands
Maps
Mount Painter