Latest regulatory requirements for 30 June 2021
The Australian Securities and Investment Commission (ASIC) continues to update its areas of focus and requirements. Here, we provide an outline of recent activities relevant to Australian businesses, including:
- Financial reporting relief
- Chapter 7 exemptions – Australian Financial Services Licence
- ASIC restatements
- AFSL and right of use assets
- Australian Charities and Not-for-Profit Commission
- The Treasury
Financial reporting relief
ASIC has announced extension relief for lodgement of annual financial statements for 30 June 2021 – 7 July 2021 reporters as follows:
| Type of entity | Chapter 2M deadline | Extended deadline |
|---|---|---|
| Listed entity | 3 months | 4 months |
| Unlisted disclosing entity | 3 months | 4 months |
| Unlisted registered scheme | 3 months | 4 months |
| Other unlisted public company | 4 months | 5 months |
| Proprietary company | 4 months | 5 months |
Chapter 7 exemptions
Australian Financial Services Licence (AFSL) — Reporting periods from 23 June 2021 to 7 July 2021
| Type of entity | Chapter 7 deadline | Extended deadline |
|---|---|---|
| Unlisted AFS licensee – body corporate that is disclosing entity or registered scheme | 3 months | 4 months |
| Unlisted AFS licensee – body corporate - NOT disclosing entity or registered scheme | 4 months | 5 months |
| AFS licensee – NOT body corporate | 2 months | 3 months |
An extension of one month has also been granted to half-year financial reports for periods from 30 June – 7 July 2021.
ASIC restatements
The restatements to entities financial statements arising from ASIC queries over the previous six months are shown below. These are useful to understand the areas where the corporate regulator is finding incorrect accounting or inappropriate assumptions in financial reporting, additional information can be found in the relevant media release.
| Ainsworth Game Technology Limited (21-068MR) |
|---|
| - Non-financial assets of its Latin American business impaired by $23.1 million. - ECL provision increased by $6.0 million. - Inventory write-downs of $3.4 million. |
- Media release: 21-068 Ainsworth writes down assets
| LawFinance Limited (21-052MR) |
|---|
| - Impairment writedowns: -- Goodwill $40.9 million -- Deferred tax assets $12.6 million - ASIC had made inquiries on the recoverability of goodwill and deferred tax assets in LawFinance's financial report for the year ended 31 December 2019 and half-year financial report for the period ended 30 June 2020. |
Australian Financial Services Licence (AFSL) and right of use assets
ASIC have recently announced (21-088MR) that ASFL holders are now able to include the carrying amount of right-of-use assets in the calculation of their net tangible assets since right-of-use assets is no longer deemed to be an excluded asset.
This should assist many AFSL holders as previously the lease liability was included in the calculation but was not able to be ‘offset’ by the right-of-use asset.
Australian Charities and Not-for-profit Commission (ACNC)
The ACNC have released some best practice disclosures for registered entities to include within their financial statements in relation to government funding. The disclosures relate to three areas:
The Treasury
In February 2021, Federal Treasury released a consultation paper Increasing harmonised financial reporting thresholds for ACNC registered charities which proposed increasing the thresholds for charities registered with the ACNC as follows:
| Size | Current revenue threshold | Proposed revenue threshold |
|---|---|---|
| Small Preparation of Annual Information Statement only | < $250,000 | < $500,000 |
| Medium Preparation of financial statements - option for audit or review | Between $250,000 and $1 million | Between $500,000 and $3 million |
| Large Preparation of financial statements - audited | > $1 million | > $3 million |
Treasury received a number of submissions and are in the process of considering the outcome of the proposal, therefore if you are an ACNC registered entity you may see some changes in the reporting requirements once a decision has been reached. We note that the feedback from constituents was mixed in the submissions.
Contact your local Bentleys audit and assurance expert for assistance with your financial reporting.
We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.
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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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