Matter

Number of enquiries

Enquiries cover…

Impairment and other asset values

19

• Reasonableness of cash flows and assumptions
• Determining the carrying amount of cash generating units (CGUs)
• Treatment of leases by lessees
• Fair value determined using discounted cash flows dependent on a large number of management inputs
• Insufficient disclosures regarding:
  • Sensitivity analyses
  • Key assumptions used
  • For fair values – valuation techniques and inputs used

Operating and financial review (OFR)

8

• No information provided on the entity’s business model
• No information provided about business strategies and prospects (particularly in the context of COVID-19)
• Over-reliance on ‘unreasonable prejudice’ exemption to avoid disclosure about strategies and future prospects, even though competitors did not use the exemption
• Lack of discussion about risks that could impact the entity’s future performance (e.g. sustainability and climate risks)

Revenue recognition

7

• Variation of franchise fee arrangements as a result of COVID-19
• Commission-based revenue which relies on estimates about future sales levels (also impacted by COVID-19)

Tax accounting

4

• Probability of recovery of deferred tax assets relating to tax losses

Provisions

4

• Adequacy of provisions for possible onerous lease contracts and site rehabilitation
• Adequacy of provision for possible obligations for casual employee entitlements

Non-IFRS profit measures

4

• Use of non-IFRS profit measures and prominence of these over statutory information
• Splitting profit or loss between pre-COVID-19 and post-COVID-19, with inappropriate prominence given to pre-COVID-19 numbers in the directors’ report

Operating segments

3

• Disclosure of operating segments
• Failing to allocate significant expense items to a reportable segment

Classification of debt

2

• Current vs non-current liabilities

Other matters

7

• Various

Total

58