ASIC today released a consultation paper on financial reporting by stapled securities issuers.
A stapled security is one issued by an entity whose securities are required to be traded together with the securities of another entity. Consultation paper CP 217 Presentation of financial statements by stapled entities (CP 217) seeks feedback on proposals for presenting combined financial information covering these stapled entities.
ASIC proposes to issue a class order so stapled entities can present combined financial statements covering all of the entities whose securities are stapled.
Combined financial statements covering entities in a stapled group provide investors useful information, particularly where there are interrelationships between the entities.
Combined financial statements are more relevant because the overall profit and the earnings per share figure in consolidated financial statements only includes the results for one stapled entity.
Stapled entities may be unable to present combined financial statements covering entities in a stapled group under the new Australian Accounting Standard AASB 10 Consolidated Financial Statements which applies for reporting periods beginning on or after 1 January 2013.
ASIC is seeking feedback on proposals to:
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provide class order relief to allow stapled entities to present combined financial statements
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require such statements to be audited or reviewed
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state that combined financial statements are necessary to meet the true and fair view requirement
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not relieve stapled entities from presenting the financial statements required by accounting standards, and
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continue to allow the financial statements of all stapled group entities to be presented together in a single financial report.
ASIC Commissioner John Price said, ‘Combining financial statements covering all entities in a stapled group facilitates business and enables the provision of useful and meaningful information for investors.’
Submissions close 30 November 2013.
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