For 30 June 2012 financial reports, ASIC will focus on revenue recognition and expense deferral policies and going concern assessments. Its surveillance will also to cover certain proprietary companies and companies with substantial assets held in emerging economies. Directors and auditors will need to be particularly vigilant on these issues.
After releasing the results of its reviews on financial reports for the year ending 31 December 2011, ASIC has announced its areas of focus for 30 June 2012 financial reports. The four areas of focus are:
- revenue recognition and expense deferral policies;
- asset values and the disclosure of associated assumptions, particularly in the context of current economic conditions;
- off-balance sheet arrangements; and
- going concern assessments, particularly with regard to reporting any significant uncertainties in the directors’ assessment.
ASIC has also indicated that it will extend its surveillance to selected proprietary companies and companies with substantial assets held in emerging economies.
Directors and auditors are reminded that the information disclosed should be meaningful and useful for investors and other potential users, and that non-IFRS information should also be disclosed according to ASIC Regulatory Guide 230 Disclosing non-IFRS financial information.
ASIC has stressed that in relation to asset values, directors and auditors should take care to factor in any impacts of the carbon pricing mechanism and mineral resources rent tax, both of which commenced on 1 July 2012.
See ASIC’s media release, dated 26 June 2012.