media release

10-165AD ASIC provides relief for parent entity financial statements

Published

ASIC has today announced the making of a new class order, [CO 10/654], to allow companies, registered schemes and disclosing entities that present consolidated financial statements to also present parent entity financial statements.

In addition to the new class order, a previous class order, [CO 05/642], has been amended to permit the issuers of stapled securities that present their financial statements in one financial report not to present single entity financial statements for those stapled entities that have consolidated financial statements.

Background

The Corporations Amendment (Corporate Reporting Reform) Act 2010(CRRA) was given Royal Assent on 29 June 2010 and became effective from 1 July 2010. CRRA amended the Corporations Act 2001 (the Act) so that those entities reporting under Chapter 2M that present consolidated financial statements are no longer required to present parent entity financial statements. This change applies for financial reports for the year ended 30 June 2010.

Australian financial services (AFS) licensees continue to be required to present parent entity financial statements under Chapter 7 of the Act. The Act now prevents entities reporting under Chapter 2M from presenting parent entity financial statements. However, some entities want to present parent entity financial statements:

  • to avoid the cost of changing their reporting formats, particularly for 30 June 2010 year ends;
  • because they are AFS licensees that are required to present parent entity financial statements under Chapter 7 of the Act; or
  • because they believe that the parent entity financial statements provide useful information to users of their financial reports.

New class order [CO 10/654]

[CO 10/654] permits entities to continue to include parent entity financial statements in their financial reports. Entities taking advantage of the relief are not required to present the summary parent entity information otherwise required by regulation 2M.3.01.

The directors’ declaration and auditor’s report must include the relevant opinions in relation to the parent entity financial statements and related notes.

Stapled securities issuers [CO 05/642]

[CO 05/642] allows a stapled security issuer to include the financial statements of the other stapled entities together in a single financial report.

The order has been amended by [CO 10/655] to allow the financial report to exclude parent entity financial statements for those stapled entities that prepare consolidated financial statements.

[CO 10/654] and [CO 10/655] commence when they are registered on the Federal Register of Legislative Instruments (FRLI) database, which is expected to occur within this week.

Editor's note:

The class orders were registered on 29 July 2010.