ASIC Regulatory Activity Update – December 2023

Focus areas for 30 June 2023

While ASIC has not yet released their focus areas for December 2023, they have released REP 774 Annual financial reporting and audit surveillance report 2022 – 23 which summarises their findings from reviews of financial reports and audit files for the period 1 July 2022 – 30 June 2023. This shows that ASIC reviewed 180 financial reports and contacted 55 entities raising 93 issues.  The top 10 issues were:

Operating and financial reviewImpairment and asset values
Revenue recognitionFinancial report disclosures
ProvisionsContingent liability disclosures
Non-IFRSInvestments
Off balance-sheetDebt classifications

We encourage all entities to review their accounting policies to ensure that the accounting treatment remains appropriate in the current economic climate, in particular on these items:

  • Revenue;
  • Impairment;
  • Provisions; and
  • Debt classifications

Restatements

ASIC continue to identify entities where they believe misapplication of accounting standards has occurred, the restatements since our last edition are:

Shine Justice
(23-270 MR)
ASIC required improved disclosure for accounting for unbilled disbursements and disbursement funding interest
Year ended 30 June 2023 – interest expense recognised on disbursement funding arrangements with recovery rights was $10,536,000 (2022: $11,137,000) – not previously itemised but offset against interest income
Link Group
(23-292 MR)
Restatement of 2023 half and full year reports - to be corrected in December 2023 half year and 2024 full year
ASIC had concerns that material misstatements in carrying value of Funds Solution business assets, provisions and expenses in relation to settlement with UK FCA
Restatement $50m increase in loss in 2023 half year and $169m impact in full year

For assistance with your financial reporting requirements, contact your local Bentleys audit and assurance advisor.

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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

 

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