Our monthly Clarity in financial reporting newsletter informs you of key focus areas in financial reporting for the month: actions, developments, and dates
Why does it matter? Our new model special purpose statements can assist entities preparing special purpose financial statements.
We’ve released the 17th edition of our model special purpose financial statements, which includes illustrative examples and discussion of:
These disclosures will assist entities completing their special purpose financial statements for the June 2022 and later financial reporting periods.
More information: Model special purpose financial statements
Why does it matter? The reissued Form FS70 codifies ASIC’s intention that intermediate parent entities holding an Australian financial services (AFS) licence are not required to prepare consolidated and parent entity financial statements under Chapter 7 of the Corporations Act 2001.
AFS licensees are required to report under Chapter 7 of the Corporations Act 2001 in addition to any financial reporting requirements under Chapter 2M of the Act. The requirements for these entities are outlined in Form FS70 Australian financial services licensee profit and loss and balance sheet.
Form FS70 was reissued on 1 July 2022 and effectively required any licensee that had "control of an investee" within the meaning of AASB 10 Consolidated Financial Statements to present both parent entity and consolidated financial statements.
ASIC subsequently clarified (through a FAQ document) that Form FS70 was "not intended to override the exemption" in AASB 10 where it would otherwise apply. The updates to Form FS70 released on 19 September 2022 completed the process of implementing this intention and removes any doubt in interpretation.
ASIC also published Financial reporting and audit: Frequently asked questions (FAQs) on its website providing responses to a number of frequently asked questions about the changes (among other topics).
We have updated our Clarity publication New financial reporting requirements for AFS licensees to incorporate the effect of these developments. We recommend AFS licensees refer to this updated publication.
Why does it matter? Important deadlines are coming up in relation to the requirements for all directors to obtain a director identification number (Director ID).
As discussed in our November 2021 newsletter, a person appointed as a director of a body corporate registered under the Corporations Act 2001 or the Corporations (Aboriginal and Torres Strait Islander) Act 2006 must apply to Australian Business Registry Services (ABRS) for a Director ID.
Where a person became a director under the Corporations Act 2001 on or before 31 October 2021, the deadline to apply for a Director ID is 30 November 2022. All directors appointed under the Corporations Act 2001 after 31 October 2021 must already be registered and new directors must obtain a Director ID prior to being appointed.
The requirement to register includes executives acting as directors of subsidiaries within groups, directors of charities and not-for-profit entities incorporated as companies limited by guarantee (or otherwise), directors of companies that are responsible for managed investment schemes, and directors of entities that do not have a reporting obligation under the Corporations Act 2001 (e.g. certain small proprietary companies).
Registrations of a person who is a director under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 is subject to a transitional process:
More information: Australian Business Registry Services website.
Why does it matter? Being aware of recent developments allows a timely and informed response.
A summary of recent developments: