New Requirements For 30 June 2025 Financial Reporting
As noted in our December 2024 update, there are no significant new standards for the current financial reporting period. As a recap, below is some high level guidance to remind you of the new / revised standards and actions which you should consider in relation to adoption.
We anticipate that the only new standard likely to have impact for our client base is the changes to AASB 101 Presentation of Financial Instruments relating to current / non-current classification of liabilities. This means that the presentation of liabilities may change between current and non-current which could affect bank covenants and other performance measures.
The changes require an entity to gain a more thorough understanding of their terms and conditions of their financing arrangements, including:
- Testing dates for covenants
- Expiration date of financing facilities
- Ability to roll-over arrangements in an existing facility
Where an entity has identified any of the following then actions should be taken to ensure that appropriate presentation can be achieved:
| CIRCUMSTANCE | PRESENTATION OF LIABILITY | ACTION | POTENTIAL OUTCOME |
|---|---|---|---|
| A potential breach is likely to be in place at reporting date. | Current (if actual breach) | Speak to financial institution prior to year end to obtain a waiver / period of grace if the breach occurs. | Liability may be classified as non-current depending on the terms and conditions of the waiver / period of grace. |
| Financing facilities are due to expire within 12 months of the reporting date. | Current | Speak to the financial institution to finalise paperwork for a new facility prior to year end. | Liability can be classified as non-current. |
| An actual breach of covenant occurred at the reporting date and no documentation received from the financial institution pre year-end. | Current | Speak to financial institution in relation to actions arising from the breach. | Disclosure of an event after the reporting date since the right to defer settlement didn’t exist at year-end. |
| Refinancing agreement signed after reporting date for facility due to expire within 12 months of the year end. | Current | N/A | Disclosure of an event after the reporting date since the right to defer settlement didn’t exist at year-end. |
| Right to defer settlement of the liability for at least 12 months at the year-end date. | Non-current | No action required. | N/A |
Other standards
The other new standards for 30 June reporters are:
- AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback
- AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements (AASB 2024-1 is Tier 2 version)
- AASB 2022-10 Amendments to Australian Accounting – Fair Value Measurement of Non-Financial Assets of Not-For-Profit Public Sector Entities.
Further information on each of these is included in the December 2024 update article.
Want to know more about how Bentleys can help you?
For assistance with your financial reporting requirements, contact your local Bentleys audit and assurance advisor. We’re here to help you get where you want to be.
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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