ASIC reissues rounding and other class orders

The Australian Securities and Investments Commission (ASIC) recently reissued class orders that impact financial reporting because ‘sunset clauses’ mean that they would otherwise be repealed ten years after commencement date.

The class orders are now referred to as ‘Legislative Instruments’. The new references and commencement dates are recorded in the table below:

Legislative Instrument	Details	Commencement date	Replaces Class Order
ASIC Corporations (Exempt Proprietary Companies) Instrument 2015/840	Continuation of ‘grandfathering’ exemption from certain private companies having to lodge financial statements with ASIC (financial statements must still be audited within four months of year end)	1 October 2015	05/638
ASIC Corporations (Non-reporting Entities) Instrument 2015/841	Non-reporting entities still permitted to apply transitional provisions in accounting standards for recognition and measurement	1 October 2015	05/639
ASIC Corporations (Post Balance Date Reporting) Instrument 2015/842	Allows entities to disclose balance sheets showing financial effect of an acquisition or disposal after reporting date in the notes to the financial statements	1 October 2015	05/644
ASIC Corporations (Electronic Lodgment of Financial Reports) Instrument 2016/181	Relieves listed disclosing entities from obligation to lodge reports with both ASIC and market operator (e.g. ASX), and allows the reports to be lodged electronically	1 April 2016	00/2451 06/06 98/104
ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016/191	Allows rounding in financial statements and directors’ report for financial years or half-years ending from 30 June 2016 onwards. ASIC CO 98/100 continues to apply to financial years or half-years ending before 30 June 2016.	1 April 2016	98/100

Are there any changes?

Other than the legislative instrument dealing with rounding (2016/191) there are no substantive changes. The wording in the instruments have essentially just been ‘cleaned up’ and references to superseded accounting standards have been deleted.

Rounding changes

There are four instances where entities with total assets of more than $1 billion will be prevented from rounding to the nearest thousand dollars ($’000), even though they were previously permitted to round under CO 98/100:

s300(1)(d) – details of options granted to directors and any of the five most highly remunerated officers (directors’ report)
s300(11) – directors’ interests in shares and options of listed companies
s300(12) – directors of responsible entity of listed schemes – interests in shares and options
Paragraphs 44 and 46 of AASB 2 Share-based Payment – option reconciliations and valuation inputs (notes), however these can now be rounded to the nearest cent.

The revised class order does not permit rounding at all for s300(1)(d) disclosures and only permits rounding to the nearest one cent for all entities for the following:

s300(6)(c) - options outstanding at the date of the directors’ report – exercise price
s300(7)(d) and (e) – options exercised during the period – amounts paid and unpaid for exercised options
AASB 2, paragraphs 44 and 46 - option reconciliations and valuation inputs.

Consistent with current requirements, no rounding is permitted in the audited remuneration report.