ASIC has announced its areas of focus for 31 December 2013 financial reports of listed entities and other significant economic entities which include operating and financial reviews, new accounting standards (on consolidated reports, joint arrangements, interests in other entities and fair value measurement), revenue recognition and expense deferral policies, asset values and impairments, going concern assessments, value of non-traded financial instruments, tax accounting, non-IFRS information and related party disclosures. Directors, auditors and preparers of financial reports will need to be particularly vigilant on these issues.
ASIC has announced its focuses for 31 December 2013 reports of listed entities and other significant economic entities and has indicated that preparers of financial reports should focus in particular on:
- providing useful and meaningful analysis in the operating and financial review (in compliance with the guidance in ASIC Regulatory Guide 247 Effective disclosure in an operating and financial review) including providing underlying drivers of financial performance and position, and explaining the business model and strategies, of the entity and how business strategies are expected to impact on future financial performance;
- the impact of new Accounting Standards AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities and AASB 13 Fair Value Measurement which apply for half and full year reporting ending 31 December 2013;
- revenue recognition and expense deferral policies;
- asset values and impairment testing;
- going concern assessments;
- the value of financial instruments, particularly where the value relies on assumptions that are not based on quoted prices or observable market data;
- tax accounting, estimates and accounting policy judgments;
- reviewing the use of non-IFRS financial information against the guidance in Regulatory Guide RG 230 Disclosing non-IFRS financial information; and
- ensuring that related party disclosures are made in accordance with accounting standards.
ASIC has also indicated that its surveillance will particularly focus on public interest entities such as listed entities, disclosing entities, financial institutions and other entities of public interest with a large number and wide range of stakeholders taking into account factors such as the nature and size of the business and the number of employees.