ASIC today released the results of its reviews of financial reports for years and half-years ended 31 December 2011 and announced its areas of focus for 30 June 2012 financial reports.

ASIC Commissioner John Price said: ‘This year a new focus will be revenue recognition and expense deferral policies. These are very important for accurate reporting of earnings and could influence reporting in challenging economic circumstances.

‘Our proactive surveillance of financial reports of listed entities and other entities with larger numbers of users will also be extended to selected proprietary companies and companies with substantial assets held in emerging economies.’

At 30 June 2012, directors and auditors should focus particularly on:

• revenue recognition and expense deferral policies;

• asset values and the disclosure of associated assumptions;

• off-balance sheet arrangements; and

• going concern assessments.

Directors and auditors should also focus on disclosures of useful and meaningful information for investors and other users. This includes the disclosure of non-IFRS financial information in accordance with ASIC Regulatory Guide 230 Disclosing non-IFRS financial information (RG 230)

ASIC’s reviews at 31 December 2011 covered 120 financial reports of listed entities and those unlisted entities with larger numbers of users. While financial reporting in Australia is generally of a high standard, we continue to identify some deficiencies in key areas. ASIC has made enquiries of a number of entities and a number of material adjustments have been made.

More information about focuses for 30 June 2012 financial reports and the findings of ASIC’s reviews of the financial reports for the periods ended 31 December 2011 are provided in the attachment to this release.