arXiv:2610.21588v1 Announce Type: cross Abstract: Audio-visual large language models (AV-LLMs) have made strong progress in multimodal understanding, yet most treat audio as monaural semantic content, limiting their ability to reason about where sounds originate and how they relate to the visual scene. Recent spatial audio-visual studies address parts of this problem, but often focus on specific abilities, such as spatial correspondence or direction and distance reasoning. In this work, we introduce HLR-AVSceneQA, a comprehensive benchmark with a hear-localize-reason hierarchy that evaluates whether models can recognize what is heard, localize sound sources in egocentric and allocentric views, and use these localized sources to reason about how they relate to the visual scene. We further introduce HLR-LLM, which augments a strong audio-visual foundation model with a binaural spatial audio branch alongside its monaural semantic audio pathway. We train HLR-LLM with a curriculum that incorporates final-stage chain-of-thought supervision for multi-step spatial reasoning. Experiments show that existing AV-LLMs remain limited in spatial grounding and relational reasoning, while HLR-LLM substantially improves spatial audio-visual scene understanding without compromising semantic audio-visual perception.