ASIC notes the decision by ASX-listed Chapmans Limited (Chapmans) to restate its results for the year ended 31 December 2016. The restatement was announced to the market on 18 August 2017.

ASIC raised concerns with not consolidating subsidiaries and not equity accounting associates in the financial report for the year ended 31 December 2016.  Chapmans treated itself as an investment entity for accounting purposes and recognised subsidiaries and an associate as investments at fair value. 

Chapmans has restated and will reissue its financial report for the year ended 31 December 2016 to consolidate and equity account the investments.  This will reduce net assets as at 31 December 2016 by $3.2 million.  Chapmans released its financial report for the half-year ended 30 June 2017 on 5 September 2017, and note 4 includes a summary of the adjustments.

More information about current areas of focus for company directors and auditors in their financial reporting is outlined in ASIC media release 17-162MR ASIC calls on preparers to focus on the quality of financial report information.