ASIC gives further reporting guidance under COVID-19 conditions

ASIC has provided additional information for companies as they prepare for the reporting period.

In a statement issued on [INSERT DATE],  the Chair of ASIC, James Shipton introduced the new detail saying, ‘In the current environment, the quality of financial reports and related disclosures is more important than ever for investors and to maintain confident and informed markets.’.

ASIC highlighted the critical reporting areas this year, advising directors, preparers and auditors to focus on:

  • asset values;
  • provisions;
  • solvency and going concern assessments;
  • events occurring after year-end and before completing the financial
  • report; and
  • disclosures in the financial report and Operating and Financial Review
  • (OFR).

Whilst companies face uncertainties about the future economic and market conditions and impact on their businesses, ASIC advised assumptions should be realistic, reasonable and not overly optimistic or pessimistic. Useful and meaningful disclosures about the business impacts and potential uncertainties will be vital.

This year OFRs should complement the financial report and tell the story of how the COVID-19 pandemic is impacting businesses. The underlying drivers of the results and financial position should be explained, as well as risks, management strategies and prospects.

To read the latest ASIC statement and attachments, please click here