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Clarity in financial reporting – October 2021 monthly newsletter

Further guidance on JobKeeper announcement requirements and more

Our monthly Clarity in financial reporting newsletter informs you of key focus areas in financial reporting for the month: actions, developments, and dates

Key actions

Further guidance on JobKeeper announcement requirements

Key actions: Australian listed entities that participated in the JobKeeper scheme should make disclosure to the ASX or other market operators using the newly released ASIC template and guidance and ASX requests.

New ASIC form and guidance

Further to our September 2021 newsletter, ASIC has released a notice and guidance to help listed entities comply with their new obligation to disclose information about JobKeeper payments to the market which was introduced into the Corporations Act 2001 by the Treasury Laws Amendment (2021 Measures No. 2) Act 2021.

As a result of the amendments, s.323DB of the Corporations Act 2001 requires Australian listed entities to announce prescribed information to the market about JobKeeper payments.

ASIC has provided:

  • A JobKeeper payments notification form – This online form permits a listed entity to fill in all the necessary information which will then generate a PDF of the JobKeeper s.323DB notice, which can then be given to the relevant market operator (e.g. ASX)
  • Frequently asked questions – This information sheet provides a summary of common questions about complying with s.323DB of the Corporations Act 2001 and completing the form.

ASX guidance

In Listed@ASX Compliance Update 09/21, the ASX asks entities listed on the ASX use the ASIC form to provide the required information on JobKeeper payments. The Jobkeeper disclosure should be released to the market as a standalone announcement and the header/title of the announcement should clearly state that it is a ‘Jobkeeper payments notice’.

The ASX notes that listed entities that have received a Jobkeeper payment in a prior financial year and lodged their annual report for that year before 14 September 2021, have until 13 November 2021 to give their notice to the ASX. Other entities have 60 days from when their annual financial statements are lodged.

Key takeaways

Entities should be aware of the following:

 The ASIC FAQs note that use of the online form is not mandatory, but it is recommended to ensure compliance with s.323DB. In addition, the ASX has requested that entities use the form (as noted above)

Using the ASIC form does not result in the information being automatically lodged with the ASX or other relevant market operator. The form generates a PDF of the notice which must then be given by the submitter to the market operator in the same manner as other market announcements

 The ASIC FAQs and legislation both refer to the disclosure of payments received for a JobKeeper fortnight that ended in an entity’s relevant financial year. In effect, this means the disclosure is made on a cash basis. This may be different to an entity’s treatment in profit or loss, but should be consistent with the entity’s cash flow statement disclosure. However, repayments are disclosed in respect of each relevant financial year regardless of when those repayments are made

ASIC notes that if an entity wishes to disclose information that is additional to that required by s.323DB, the entity should make a separate announcement to the market operator. For instance, if the entity wishes to reconcile amounts disclosed in the JobKeeper s.323DB notice to prior released financial information, a separate announcement should be made

 Where a notice given to a market operator becomes out of date or is otherwise not correct, the entity is required to provide an updated notice to the market operator within 60 days. For example, if an entity makes the necessary announcement and then subsequently makes a voluntary repayment of JobKeeper amounts received, it would be required to provide an updated notice to the market operator.

More information: ASIC 21-271MR ASIC issues Jobkeeper notice and guidance.

Key developments

Two minute update

Why does it matter? Ensure you are aware of the latest developments.

A summary of recent developments:

Updated Task Force on Climate-related Financial Disclosures (TCFD) materials available

The TCFD was established by the Financial Stability Board (FSB) in December 2015 and released its widely accepted recommendations on climate-related financial disclosures in 2017. The TCFD has recently published three documents:

  • A 2021 status report which notes that disclosure of climate-related financial information aligned with the TCFD recommendations has accelerated over the past year and highlights that further progress is needed
  • Guidance on metrics, targets, and transition plans to support preparers in disclosing decision-useful information and linking those disclosures with estimates of financial impacts
  • Updated Implementation guidance on its recommendations, replacing guidance initially published in 2017.

For more information, see the TCFD announcement and our Clarity publication Disclosure of climate-related risks.

ASIC updates FAQs to deal with bed licences

ASIC has updated its frequently asked questions on COVID-19 implications for financial reporting and audit to include additional commentary on proposed changes to aged care bed licences.

Under the proposals announced in the 2021-22 Federal Budget, aged care bed licences would be discontinued from 1 July 2024 as part of a series of reforms. The Federal Department of Health subsequently released a discussion paper in September 2021 dealing with the proposed transition to the new regime.

New commentary added to the end of ASIC FAQ 9D notes that entities with bed licence intangible assets should consider a number of factors, including:

  • Whether to change the amortisation period
  • Whether to impair the licences
  • Whether to disclose judgements and uncertainties.

Extended reporting and AGM relief for entities under external administration

ASIC has released amendments to ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251 that provide:

  • A deferral of financial reporting and any continuing obligations under Part 2M.3 of the Corporations Act 2001 for a minimum period of six months and a maximum period of 24 months after the appointment of a voluntary administrator, managing controller or provisional liquidator (previously this was set at a fixed six month period)
  • A deferral of the requirement to hold an AGM under s.250N of the Corporations Act 2001 during the relevant deferral period, so long as the entity holds an AGM within 2 months of the end of the deferral period and lays before the AGM all outstanding financial reports deferred under the Corporations Instrument.

The amendments are effective from 6 October 2021. More information can be found in ASIC 21-263MR ASIC provides relief for companies in external administration.

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