Our monthly Clarity in financial reporting newsletter informs you of key focus areas in financial reporting for the month: actions, developments, and dates
Consider and address ASIC’s focus areas in 30 June 2023 financial reports.
ASIC’s focus areas for 30 June 2023 financial reports call on directors, preparers and auditors to assess the impact of uncertain market and economic conditions on reporting for full and half-years endings on 30 June 2023.
ASIC expects investors to be properly informed about “the impact of changing and uncertain economic and market conditions, ‘net zero’ targets and other developments on financial position and future performance”.
Changes from the prior period include:
Include the impacts of the recently finalised IASB ‘Pillar Two’ amendments in June 2023 financial reports.
The IASB released International Tax Reform – Pillar Two Model Rules in late May 2023, addressing accounting implications of the OECD ‘Pillar Two’ global minimum tax being implemented by over 130 countries globally, including in Australia and New Zealand. We expect the AASB to make equivalent amendments before the end of June 2023.
The amendments prohibit the recognition or disclosure of information about deferred taxes related to Pillar Two income taxes. This exception to the recognition and disclosure of deferred taxes applies immediately on issue on a retrospective basis.
Entities must disclose that they have applied the exception, including at 30 June 2023. Once Pillar Two legislation is substantively enacted, additional disclosures about the impact of Pillar Two on the entity will be required until such time as the legislation applies to the entity. The entity will then separately disclose the amount of current tax arising from Pillar Two taxes.
Read our Clarity publication Responding to Pillar Two to help you to understand and apply the amendments. The publication explains the amendments, outlines how they relate to the Pillar Two transition process, and provides illustrative disclosures for financial reports around the impacts of Pillar Two.
Review existing disclosures in light of recently introduced requirements and prepare for their mandatory introduction in 2024-25.
Amendments to IFRS® Accounting Standards issued by the IASB in late May 2023 introduce additional disclosure requirements around supplier finance arrangements in financial reports. The amendments are designed to extend and enhance the disclosures discussed in a December 2020 agenda decision of the IFRS Interpretations Committee.
The amending standard, Supplier Finance Arrangements, makes amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to introduce a new disclosure objective focused on user assessment of the effects of supplier finance arrangements on an entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.
We expect the AASB to make equivalent amendments before the end of June 2023. The amendments are applicable to annual reporting periods beginning on or after 1 January 2024.
Supplier finance remains a significant focus of users, regulators and standard-setters. Given the market interest in this topic, entities may consider adopting some or all of the new disclosure requirements in the June 2023 and December 2023 reporting periods, even though the disclosures are not mandatory for these reporting periods. Tier 1 financial reports will need to include disclosure about any material impacts of the amending standard where it is not early adopted.
Access the following new resources on www.deloitte.com/au/models shortly: