Important reminder: Large private groups must lodge complete, consolidated financial statements

The results of recent financial reporting surveillance activities show that the Australian Securities and Investments Commission (ASIC) is paying more attention to financial reporting compliance by large private companies.

In one instance, a previously large ‘grandfathered’ proprietary company re-lodged its financial report for the year ended 30 June 2023 because the initial lodgement did not include comparatives for the 30 June 2022 financial year. Presenting comparatives is a requirement of paragraph 20 of AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities for a complete set of financial statements.

In another case, ASIC raised concerns that the entity had not complied with AASB 10 Consolidated Financial Statements. When lodging its financial report for the year ended 31 December 2023, the entity restated its 2022 comparative to include consolidated financial statements.

For financial years ending prior to 30 June 2022, many large private groups considered themselves non-reporting entities. They prepared special purpose financial statements, which were most often not consolidated financial statements.

For years ending on or after 30 June 2022, all large private entities must prepare general purpose financial statements, including consolidated financial statements where relevant. This includes previously large ‘grandfathered’ proprietary companies. Key points to note:

  • As a minimum, entities must prepare general purpose financial statements applying the Tier 2 Simplified Disclosures contained in AASB 1060
  • The ultimate Australian parent entity of an Australian group must prepare consolidated general purpose financial statements
  • The ultimate Australian parent entity is only exempt from doing so if it is an investment entity measuring its subsidiaries at fair value through profit or loss, and it has no other subsidiaries
  • There are exemptions in AASB 10 for intermediate Australian parent entities from having to prepare consolidated financial statements if all the criteria in AASB 10, paragraph 4(a) are met.

ASIC’s recent media releases remind entities to lodge general purpose financial reports with ASIC, which include consolidated financial statements, where relevant.

More information

Please check our website which contains free resources on different accounting topics. These include articles, publications, and webinars to assist in preparing general purpose financial statements. You can also subscribe to self-paced e-learning courses on our Learning Hub.

We are here to help

Please contact our IFRS & Corporate Reporting team if you need support with any financial reporting matters for your 30 June 2024 financial reports.