ASIC today announced the results from a review of the 31 December 2014 financial reports of 100 listed and other public interest entities.
Following a review, ASIC has made enquiries of twenty three entities on thirty six matters seeking explanations of accounting treatments.
ASIC Commissioner John Price said: ‘The largest number of our findings continue to relate to impairment of non-financial assets and inappropriate accounting treatments. Preparers of financial reports should particularly focus on impairment in coming 30 June 2015 financial reports.’
ASIC recently issued Information Sheet 203 Impairment of non-financial assets: Materials for directors (INFO 203) to assist directors and audit committees in considering whether the value of non-financial assets shown in a company’s financial report continues to be supportable.
Our risk based surveillance of the financial reports of public interest entities for reporting periods ended 30 June 2010 to 30 June 2014 has led to material changes to 4 per cent of the financial reports of public interest entities reviewed by ASIC. The main changes related to impairment of assets, revenue recognition and expense deferral.
Enquiries made by ASIC relate to the following matters:
| Matter | Number of enquiries |
|---|---|
| Impairment and other asset values | 10 |
| Off-balance sheet arrangements and business combinations | 8 |
| Revenue recognition | 5 |
| Tax accounting | 5 |
| Non-IFRS financial information | 4 |
| Treatment of expenses | 3 |
| Other matters | 1 |
| Total | 36 |
Enquiries of individual entities will not necessarily lead to material restatements. Matters involving seven of the entities have been concluded without any changes to their financial reporting.
ASIC does not pursue immaterial disclosures that may add unnecessary clutter to financial reports.
Public announcements of material changes Individual releases
From 1 July 2014, ASIC commenced publicly announcing when, following contact from ASIC, a company makes material changes to information previously provided to the market. These announcements are intended to make directors and auditors of other companies more aware of ASIC’s concerns so that they can avoid similar issues. To date, the total adjustments to profit for these entities was over $630 million.
Further information
More information about the findings from ASIC’s recent reviews of the financial reports of listed entities and of unlisted entities with larger numbers of users is provided in the Attachment to this release.
ASIC's focus areas for 30 June 2015 financial reports can be found in Focus areas for 30 June 2015 financial reports (refer: 15-139MR).