ASIC Focus Areas for Year End Financial Reports
On 30 May 2014 ASIC announced its planned surveillance program for 30 June 2014 financial reports. ASIC will examine listed entities and other entities of public interest, with a large number and wide range of stakeholders considering factors like the nature and size of the business and the number of its employees.
In conducting their review they will focus on the following key areas:
1. Impairment testing and asset values - focusing on the recoverability of goodwill intangibles and property plant and equipment
2. Amortisation of intangible assets
3. Off-balance sheet arrangements and new standards ‑ AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities and AASB 13 Fair Value Measurement
4. Revenue recognition
5. Expense deferral
6. Tax accounting
7. Disclosure of estimates and accounting policy judgments
ASIC encourages those responsible for preparing and auditing financial reports to carefully consider the following:
Impairment of goodwill and other assets focusing on assumptions used and relationship between the cash flows being used and the assets being tested.
Directors do not need to be accounting experts; however bearing in mind their knowledge of the business, its assets, and the future prospects, they should:
For further information please call your ESV Engagement Partner on 9283 1666 to arrange a consultation.
Article by Lisa Brink