The purpose of Regulatory Guide 230 Disclosing non-IFRS financial information (RG 230) is to:
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promote more meaningful communication of non-IFRS financial information to investors and other users of financial reports;
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assist directors in ensuring that the information is not misleading; and
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provide greater certainty in the market as to ASIC's views on disclosure of the information.
Non-IFRS financial information, including non-IFRS profit measures, can be useful to investors and other users of financial information.
Non-IFRS financial information is financial information that is presented other than in accordance with all relevant accounting standards. Australian accounting standards are consistent with the International Financial Reporting Standards (IFRS).
The information can be presented in documents such as directors’ reports, market announcements, investor briefings and transaction documents, provided it is not misleading. While the presentation of the information in financial reports is subject to particular legislative and accounting standards restrictions, there is more flexibility to present the information in documents attached to financial reports and other documents.
ASIC Commissioner Michael Dwyer said: ‘Non-IFRS financial information can provide useful information to investors and other users of financial reports. However, it is important that information is not misleading. This ASIC guidance will be useful to stakeholders by providing guidance to assist in reducing the risk that information is misleading.’
Guidance to assist directors and preparers of financial information in reducing this risk includes:
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giving equal or greater prominence to IFRS financial information;
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explaining the non-IFRS information and reconciling it to the IFRS financial information;
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calculating the information consistently from period to period; and
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not using information to remove ‘bad news’.
The guidance in RG 230 is consistent with guidance in the US and Europe.
Background
ASIC issued Consultation Paper 150 Disclosing financial information other than in accordance with accounting standards (CP 150) in March 2011. ASIC received 33 written responses to CP150 which, together with meetings with interested parties, were valuable in developing RG 230. Enhancements include more guidance and examples.
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