ASIC notes the decision by Pacific Current Group Limited (Pacific Current) to correct its accounting treatment of Aurora Trust in its financial report for the half-year ended 31 December 2017.

ASIC raised concerns with the non-consolidation of Aurora Trust (Aurora) in Pacific Current’s 30 June 2017 financial report. We were concerned that Aurora had not been consolidated from November 2014 to April 2017 when Pacific Current had rights to variable returns of Aurora and had the ability to use its power to affect the relevant activities and returns of Aurora.

As a result of, consolidating Aurora from November 2014, Pacific Current made a restatement, reducing net assets by $48.3 million at 30 June 2017 and profit after tax by $65.8 million for the year ended 30 June 2017.

As outlined in ASIC media release 17-423MR ASIC calls on preparers to focus on financial report quality and new requirements, the non-consolidation of controlled entities remains a focus area of our financial reporting surveillances.