Introduction

Australia’s first mandatory sustainability reports have now been lodged, and the early lessons are already clear. ASIC has shared some of its own observations from reviewing this first wave of reports.

Our SW Sustainability experts have also drawn on our experience supporting first-wave reporters, and we are seeing that the biggest challenges are not purely technical. They often sit at the intersection of judgement, governance, data quality, and documentation.

For organisations preparing for upcoming reporting cycles, the first wave provides a useful preview of where effort is needed most. Regulators have also started to signal their areas of focus, including the need for clear, decision-useful disclosures, defensible judgements, and reporting that aligns with the statutory framework under Chapter 2M and AASB S2.

Below are some of the practical insights we are seeing from the first wave of sustainability reporting in Australia and what they may mean for businesses getting ready to report.

Materiality is where many of the hardest judgements begin

Climate-related risks and opportunities sit at the centre of the reporting process. The challenge is not just identifying them, but assessing and documenting them in a way that is both business-relevant and reporting-ready.

One of the clearest lessons from the first wave is that education and engagement matter. For many boards, management teams, and operational stakeholders, sustainability reporting is still new.

Structured workshops can be an effective way to identify risks and opportunities. They serve a dual purpose by building management’s understanding of sustainability reporting and capturing the input needed for the report, along with the supporting documentation that underpins key disclosures.

A key lesson is the need to link climate risk to business risk. Some organisations initially conclude that they do not face significant climate risk. In practice, climate-related matters often overlap with existing business risks such as water availability, energy costs, asset resilience, and supply chain disruption. These issues may already be managed operationally, but they still need to be assessed through a climate-reporting lens.

When identifying the risk, transition risks in the value chain are also easy to overlook, even though the assessment may need to extend beyond the reporting entity itself.

Once risks are identified, the next step is to apply a clear materiality framework to determine what should be reported. That framework should evolve over time as the organisation builds capability, refines its understanding, and responds to input from stakeholders, auditors, and the market.

Materiality is not just about identifying material risks. It also requires judgement about what information about those risks matters to users. Where an organisation has already been affected by events such as flooding or bushfire, users may reasonably expect disclosure of that experience and its future implications, even if the historical financial impact was not, on its own, quantitatively material. This is consistent with ASIC’s early observations on sustainability reporting.

Greenhouse gas reporting is as much a process challenge as it is a data challenge

For many first-time reporters, greenhouse gas reporting has highlighted that the issue is not simply whether data exists, but whether it is sufficiently complete, consistent, and reliable for reporting and assurance purposes. Questions often arise around what to do when data is incomplete, how to use estimates appropriately, and how to document the basis for key assumptions.

A recurring practical issue is the need to reconcile emissions data back to underlying operational and financial records. For example, electricity data may need to be checked against site lists, invoices, or lease registers to support completeness. This is often where reporting teams discover that existing systems were not designed with external reporting in mind.

It is also important to recognise that some inputs are not static. Emission factors, global warming potential assumptions, and data sources can change over time. This means organisations need a methodology that is not only technically sound, but also documented well enough to explain changes from one reporting period to the next. AASB S2 specifically requires disclosures about greenhouse gases and the methods, assumptions, and inputs used.

Most organisations begin with manual processes, especially in the first year. That is often a practical starting point, but it quickly becomes clear that stronger internal processes and review controls are needed. Internal sense-checking is critical. In early cycles, teams are still building the experience needed to identify anomalies or challenge unusual results, so draft outputs and iterative review become an important part of getting to a robust result.

For larger groups, the complexity increases quickly. Different subsidiaries, business units and jurisdictions may rely on different source systems, definitions, and data owners. Starting early and avoiding assumptions about data availability are both critical.

Governance disclosures require more detail than many expect

Governance has emerged as one of the key focus areas in first-year reporting. While some organisations expected this section to be relatively straightforward, in practice it often requires careful drafting because the disclosures are qualitative, specific, and closely tied to how climate-related matters are actually governed within the business.

This is an area where it pays to slow down and work through the disclosure requirements carefully. Organisations need to balance the detailed requirements in AASB S2 with the broader legal and governance context under the Corporations Act, including the responsibilities of directors and those charged with governance.

The most effective governance disclosures tend to explain climate-related oversight in the context of the existing business rather than describing climate as a separate overlay. Existing board, management, and risk committee structures may already address relevant business risks. The task is often to identify where climate-related responsibilities already sit, where gaps remain, and how those roles and processes should be described clearly in the report.

Assurance readiness should start earlier than most teams think

The assurance process is still relatively new for many preparers, auditors, and boards. One practical lesson from the first wave is that organisations should allow more time than they initially expect for auditor review, challenge, and iteration. Multiple rounds of questions are common, and that needs to be built into the overall reporting timetable from the outset.

Good documentation makes a significant difference. A well-prepared internal paper trail can reduce friction during assurance by showing how conclusions were reached, what alternatives were considered, and where management judgement was applied.

In many cases, the published sustainability report is only the end product. It does not, by itself, show the underlying process, judgements, and evidence that sit behind the disclosures. That is why supporting documentation matters. This may include long lists of risks and opportunities considered, materiality assessments, rationale for inclusion or exclusion, records of scenario choices, and explanations of key assumptions. In practice, the draft report can be a useful checklist for identifying where further internal documentation is needed.

Key judgements and significant reporting decisions should also be summarised and presented to senior management and the board in a way that aligns with the organisation’s governance structure. This not only supports internal oversight, but also helps auditors understand the business context and the basis for management’s conclusions.

Key takeaway: First-year reporting does not need to be perfect, but it does need to be disciplined

One of the clearest messages from the first wave is that organisations should not let the pursuit of perfection delay progress. Sustainability reporting capability will evolve over time. What matters in the first year is establishing a proportionate, well-governed, and evidence-based process that can support the disclosures being made. In many cases, the act of drafting the report itself helps sharpen governance, data processes, and internal accountability.

ASIC’s observations

From ASIC’s media release on their initial observations from sustainability reporting, we note the following key points:

• 259 sustainability reports were lodged for the year ended 31 December 2025.
• ASIC observed a meaningful increase in both quantity and quality of climate-related financial information compared to prior voluntary disclosures.

However, some key deficiencies and areas for improvement were noted as follows:

Inappropriate disclaimers

Statements limiting reliance or responsibility (e.g. ‘not for investment decisions’) are not permitted and may mislead users.

Incomplete risk identification

Some entities failed to incorporate past events and known exposures when assessing future climate risks.

Weak disclosure of judgements/assumptions

Lack of clarity around key estimates and uncertainties reduces decision-usefulness.

Information overload risk

Excess voluntary disclosures can obscure material AASB S2 information.

Cross-referencing issues

Non-compliant references (e.g. to websites or unclear sections) were observed.

Climate-related targets

Inconsistent interpretation, entities must include targets required by law/regulation (e.g. Safeguard Mechanism).

ASIC expectations for 30 June 2026 reporters include:

• use ‘reasonable and supportable’ information, including forward-looking data
• ensure clear, proximate disclosure of key judgements and uncertainties
• maintain discipline on materiality and clarity, avoiding clutter
• ensure strict compliance with AASB S2 and RG 280, particularly for cross-referencing.

How SW can help

Whether you are just starting your sustainability reporting journey or preparing for assurance, we can support your team with:

• materiality assessments, including the identification and evaluation of climate-related risks and opportunities
• facilitated workshops that engage management and gather information, serving the dual purpose of capability building and supporting the reporting process
• greenhouse gas reporting and the drafting of sustainability reports
• preparing for assurance readiness
• targeted training for boards and management
• preparation of the internal documentation needed to support judgements and disclosures.

Contributors

Jimmy Cao

The post First-wave sustainability reporting in Australia: Practical lessons from ASIC and SW’s team of experts appeared first on SW Accountants & Advisors.

The proposals respond to ongoing governance concerns and recent high-profile scheme collapses, most notably the Shield Master Fund and the First Guardian Master Fund. Together, they placed more than $1bn of investor funds at risk. The Australian government is considering reforms aimed at reducing consumer harm, strengthening responsible entity (RE) accountability, and improving Australian Securities & Investments Commission’s (ASIC) visibility over scheme activities, superannuation switching, and sector-wide risks. Treasury is seeking feedback on these proposals, with submissions due by 27 February 2026.

The paper sets out 6 consultation points for feedback from the industry

1. Strengthening the compliance framework

• Stricter compliance plan requirements, including detailed scheme descriptions and significant risk controls.
• Liability for compliance plan breaches limited to material contraventions.
• Mandatory use of existing audit and assurance standards for compliance plan audits.
• REs to notify ASIC of appointment or resignation of compliance committee members.

2. Majority of external directors on responsible entity boards

• RE boards would be required to have a majority of external directors, eliminating the alternative option of a mandatory compliance committee.

3. Prohibition on related‑party transactions (with limited exceptions)

• REs would be prohibited from investing in or lending to related entities unless an exception applies. This responds directly to identified misconduct in past MIS failures.
• A potential solution outlined would be to outsource the RE function such that it is independent of the investment manager.

4. New framework for financial resource requirements

• ASIC considering higher net tangible asset (NTA) requirements.
• Treasury is seeking feedback on whether these requirements should be set out in legislation rather than in ASIC instruments.

5. Increased ASIC MIS data collection powers

• New recurrent and event‑based data reporting to address current gaps in MIS‑level visibility.

6. Alerts to ASIC about superannuation switching

• Mandatory alerts from superannuation trustees regarding suspicious switching activity, aimed at early detection of misconduct.

Who is impacted

How SW can help

SW brings deep financial services expertise with a strong focus on funds management and regulated investment structures. We work closely with responsible entities, investment managers, and trustees to navigate complex regulatory change and evolving governance expectations.

Our team can assist in assessing the impact of the proposed reforms on your governance framework, board composition, compliance plans, and related party arrangements. We also advise on financial resource requirements, capital implications, and enhanced reporting obligations, helping you strengthen risk management and internal controls in line with heightened regulatory scrutiny.

With integrated audit, assurance, risk, and advisory capabilities, we provide practical, commercially focused guidance to help you respond effectively to these reforms.

Contributor

James Serpell

The post Enhancing safeguards & governance in the managed investment scheme sector appeared first on SW Accountants & Advisors.

The purpose of the report is for ASIC to give insights on what good operating practices look like and to share some improvements for some operators to adopt. It also highlights emerging risks and areas where greater transparency and governance are needed to protect investor interests. 

Key takeaways from the article published by ASIC 

• Private credit plays a valuable role in the Australian economy, complementing bank and public market lending 

• The market has grown significantly post-GFC, now estimated at $200 billion, with ~50% in real estate-focused finance 

• Growth is driven by superannuation inflows, institutional investment, and demand for yield. 

Key issues identified 

Conflicts of interest 

The review uncovered several critical areas where conflicts of interest and transparency challenges frequently arise. These issues are common across fee structures, valuations, related party transactions, and loan structuring. In some cases, managers retain 50–100% of borrower-paid fees, creating a clear misalignment with investor interests. Additionally, the use of special purpose vehicles (SPVs) to capture excess interest margins further reduces transparency and makes it harder for investors to fully understand the fund’s true economics. 

Fees and remuneration 

Significant concerns were raised about fee transparency and how remuneration aligns with investor interests. Often, fee structures are opaque and inconsistently disclosed, making it challenging for investors to understand the true cost of their investment. In some cases, managers earn several times the disclosed management fee through hidden borrower-paid fees. To promote transparency and comparability, best practice calls for all fees, regardless of how they are charged, to be clearly disclosed as a percentage of fund assets. 

Portfolio transparency and valuations 

The report highlighted inconsistent valuation methods and transparency issues that may mislead investors about the true performance of private credit portfolios. Valuation practices differ widely across funds, with many lacking quarterly independent valuations. For real estate-backed loans, valuations often depend on gross rent or projected completion values, which can significantly inflate asset values. Furthermore, some funds report no impairments, a practice that seems inconsistent with expected default rates and raises questions about the accuracy of their portfolio reporting. 

Terminology 

Inconsistent use of key terms such as “investment grade,” “senior debt,” and “LVR” contributes to investor confusion and risks misrepresenting the true level of risk. This lack of clarity can lead to misunderstandings about the quality and safety of investments, making it harder for investors to make informed decisions. 

Investor protection concerns 

Several investor protection concerns were identified, particularly affecting retail and wholesale investors relying on sophisticated investor exemptions who face higher risks due to a lack of transparency. The report also highlights that real estate construction and development finance is a high-risk, concentrated sector, which may pose potential systemic risks. Additionally, distributions in some real estate funds may be paid from capital rather than income, raising further concerns about the sustainability and safety of returns. 

Recommended good practices  

ASIC recommends several good practices to enhance transparency and investor protection, including quarterly fund composition reporting that covers impairments, PIK loans, and distribution sources. Independent quarterly valuations should be conducted to ensure accuracy, while full and transparent fee disclosure, including all borrower-paid fees, is essential. Clear definitions of key investment terms are important to reduce confusion, alongside comprehensive disclosure of leverage, liquidity mechanics, and governance structures to provide investors with a complete understanding of the fund’s operations. 

Regulatory issues for ASIC’s consideration 

The lists below highlight key areas for ASIC’s attention, identifying market practices and operational issues where enhancements can benefit both the market and investors. Raising standards and improving disclosure in these areas are essential steps toward strengthening trust and confidence in Australia’s private credit sector. 

Priority issues 

• remuneration and fee disclosure 

• related party transactions and governance 

• valuation frequency and independence. 

Secondary issues 

• liquidity mismatch 

• investment reporting standards 

• terminology clarity 

• sector concentration risks. 

International comparisons 

• Australia lags behind the US and Europe in transparency and regulation 

• overseas markets are moving toward greater disclosure, especially for retail investors 

• examples include the UK LTAF, EU ELTIF, and Singapore MAS initiatives. 

Systemic risk 

• not currently a major concern, but real estate development and retail investor exposure are areas to monitor 

• ASIC could consider a reporting framework to track systemic risks and market integrity. 

At SW we regularly assist private credit providers to structure their operations in a way that is transparent, tax effective, and protects investors. Our financial services team can also offer insights into the most effective systems to use as well as provide accounting and assurance services. 

In our experience, private credit providers face several complex challenges during the start-up phase. These include setting up systems, establishing tax structures, ensuring compliance, and building the right relationships and support networks. Addressing these areas early is crucial for enabling business growth and maximising its potential. 

More mature private credit funds tend to encounter increasingly complex issues, often related to compliance, sustaining growth, and maintaining the quality of their loan portfolios. Navigating these challenges requires robust operational frameworks and ongoing oversight. 

Putting good operating structures in place, such as those recommended by ASIC, not only positions private credit providers for long-term success but also protects investors, creditors, and directors from compliance risks and financial setbacks. 

How SW can help 

Our financial services team has deep experience working with private credit providers across all stages of maturity. We offer tailored solutions to help start-ups establish strong foundations and support mature funds in managing growth, regulatory compliance, and portfolio quality. From designing transparent fee structures to implementing governance frameworks and performing independent valuations, we provide end-to-end support that promotes operational excellence and investor confidence. 

The post ASIC publishes new report on private credit in Australia appeared first on SW Accountants & Advisors.

The reforms are designed to improve investor protection within an emerging sector as some platforms have ineffective risk management as well as being largely unregulated in Australia. It aims to strengthen governance and align crypto with the standards already applied to traditional financial services. 

Bringing crypto in line with AFSL is expected to create consolidation within the sector and targets crypto exchanges rather than at the token level.   

Key changes 

• New categories under the Corporations Act 2001 will recognise digital asset platforms (DAPs) and tokenised custody platforms (TCPs) 

• These entities will be required to obtain an AFSL and meet obligations consistent with traditional financial service providers 

• The draft framework sets out obligations relating to custody, settlement, tokenisation, staking, governance, disclosures and consumer protection standards 

• Significant penalties will apply for operating without a licence, with some exemptions proposed for smaller operators 

What the draft law proposes 

The proposed changes amend the Corporations Act 2001 to introduce two new categories of financial service providers: 

1. Digital Asset Platforms (DAPs): Operators of trading platforms for crypto assets. 

2. Tokenised Custody Platforms (TCPs): Custodians of digital assets on behalf of clients. 

Entities falling into these categories will be required to: 

• hold an AFSL, with obligations largely aligned to those already imposed on traditional financial services providers. 

• implement and maintain controls for custody and settlement of digital assets. 

• comply with requirements on tokenisation, staking, governance, disclosures and consumer protection. 

• submit to ASIC oversight, including reporting obligations and enforcement measures. 

The regime proposes threshold exemptions for smaller operators. For example, platforms with client holdings below $5,000 per person or with annual transaction values under $10 million may not need to hold a licence. However, these exemptions are tightly defined and will not apply to most exchanges operating at scale. 

Penalties for non-compliance 

The penalties set out in the draft legislation are significant. Operating without an AFSL could attract fines up to $16.5 million, or a percentage of turnover or profit derived from unlicensed activities. This brings crypto regulation into line with other parts of the financial services sector where strong deterrence measures apply. 

Implications for the industry 

For many crypto exchanges and custodians, this will be the first time they are required to meet obligations such as: 

• annual and continuous reporting to ASIC. 

• preparation of audited financial statements in line with Australian Accounting Standards. 

• maintenance of sufficient financial resources to comply with licence conditions. 

• demonstration of effective internal processes, controls and governance frameworks. 

• the draft legislation also highlights areas of focus for regulators, including consumer protection, asset segregation, valuation of digital assets, cyber security, and the robustness of custody arrangements. 

Audit considerations 

The changes carry significant implications for AFSL audits. Crypto entities will be required to obtain assurance over governance structures, custody processes and financial resource requirements. Auditors will need to assess the operating effectiveness of internal controls, review the accuracy of financial projections, and test compliance with both the AFSL framework and guidance such as GS003 issued by the Auditing and Assurance Standards Board.  

There will also be an increased focus on digital asset risks, transparency, and the robustness of control environments. For many operators who have not previously prepared financial statements under Australian Accounting Standards, complex financial reporting matters are likely to arise which will require a high level of skill and experience in the sector to address. 

How can SW help?  

We recommend that organisations begin preparing now by assessing whether the regime applies to their business, reviewing current practices against the proposed obligations, and developing compliance plans well ahead of implementation. Engaging advisors early will be key to identifying gaps and reducing the risk of non-compliance, while staying across ongoing consultation and ASIC guidance will be essential as the regulatory detail develops. 

SW has a dedicated financial services team that advises cryptocurrencies, banks, fund managers, superannuation providers and brokers, and we meet regularly to share insights on emerging regulatory issues and industry trends. Our focus is on conducting efficient audits that address the risks of material misstatement, ensure compliance with Australian Accounting Standards, and provide clear reporting on governance and control effectiveness in line with GS003. 

With extensive experience in AFSL audits, our team is ready to help digital asset businesses understand and prepare for the new licensing environment. 

The post Crypto exchanges to require AFSL licences  appeared first on SW Accountants & Advisors.

Our experts provided topical content of relevance as well as an update on what’s new in financial reporting, including information about the following topics:

• Accounting standard changes and EDs
• International Financial Reporting Interpretations Committee update
• Key focus areas for 30 June reporting
• ASIC update
• Sustainability standards
• Other regulatory changes

Session 1

Session 2

Expert speakers

Tom Mullarkey
Partner
SW

René Muller 
Partner
SW

Jimmy Cao
Associate Director
SW

The post Financial Reporting webinar series appeared first on SW Accountants & Advisors.

我们为2023年最后一场全中文税务与会计更新讲座准备了丰富的内容。
We have a lot to share at our final Mandarin Tax & Accounting Update for 2023.

税务与会计主题汇总 Summary of tax & accounting topics

• 客观看待税籍 | An objective view of tax residency
• 统一报告标准现在进行时 | The common reporting standards current and in force
• 浅谈海外构架的基本逻辑 | Ideas that underpin overseas structures
• 税务构架的三个角度 | Three aspects of tax structuring
• 高净值人士个税审计的步骤与常见问题 | Steps of individual income tax audit for high-net-worth individuals and frequently asked questions
• 会计准则与ASIC新动态以及可持续发展报告 | Accounting standards and ASIC updates and sustainability reporting
• 税收改革 – 经合组织“支柱二”全球反税基侵蚀规则与资本弱化 | Tax Reform – OECD Pillar Two GloBE rules & Thin Capitalisation

专家团队 | Your experts

时炜淞 Vincent Shi
董事 Director

张洋 Bessie Zhang 
合伙人 Partner

秦建乐 Michael Qin
合伙人 Partner

陈泓洋 Michael Chen
高级经理 Senior Manager

联系我们 | Contact us

若您有任何疑问或想了解更多详情，欢迎通过 marketing@sw-au.com 联系本事务所市场部团队。
If you have any queries or would like more information, please contact the Marketing team via marketing@sw-au.com.

请关注我们的微信公众号，了解更多动态资讯和线上讲座。 
Follow our WeChat account to stay updated on insights and our other webinars.  

The post 全中文税务与会计更新讲座 | Mandarin Tax and Accounting Update appeared first on SW Accountants & Advisors.

The ASIC media release on 6 June 2023 outlined its key areas of focus for this reporting season, stressing the need for directors, preparers of financial reports and auditors to evaluate the potential impact of shifting circumstances, uncertainties, and risks.

Key areas of focus

Asset values

Considerations for directors, preparers, and auditors regarding asset values include:

• impairment of non-financial assets
• appropriate valuation methods
• factors affecting property values
• expected credit losses
• asset classification
• inventory valuation
• deferred tax assets
• investments in unlisted entities.

Provisions

Financial statement preparers need to provide sufficiently for potential expenses or obligations relating to onerous or loss-making contracts, property leases, restoring mining or other sites, providing financial guarantees, and making changes to your business.

Solvency and going concern assessments

In a growing interest rate market, debt can become very expensive to manage and covenant breaches more common resulting in solvency and going concern issues. Inflation is also an issue for many entities to manage. Our advice is to ensure that projections are reasonable and realistic and going concern disclosures are made with sufficient detail in the financial statements if there are material uncertainties surrounding going concern.

Events occurring after year end and before completing the financial report

It is important to review any events that happen between the end of the year and the completion of the financial report. This review should determine if these events have any impact on the assets, liabilities, income, or expenses at the end of the year or if they involve new conditions that need to be disclosed. Covenant breaches post year-end need to be identified. Adjustments or disclosures relating to relevant events post-year end is important to investors and other stakeholders. Omission of such material information could be problematic, in particular in an uncertain economic environment.

Disclosures in the financial report and Operating and Financial Review (OFR)

Disclosure of information is important to investors and other stakeholders. Directors must ensure disclosures are specific to the entity’s circumstances and highlight changes from the previous period. Address uncertainties, classify assets and liabilities correctly, and explain the impact of economic conditions in the Operating and Financial Review. Discuss risks, strategies, and consider climate change and cybersecurity risks. Present non-IFRS profit measures accurately and disclose significant developments since end of last year in half-year reports.

Impact of uncertainty

Market and economic conditions are particularly uncertain this year, which impacts financial reporting in areas where significant estimates and judgements are required in the financial statements.

The impact will be different depending on industry, geography, markets, suppliers and customers but very few industries are not facing significant uncertainty.

Directors and financial statement preparers should take into account what the entity’s current performance is, what the future holds and how those factors impact on values of assets, provisions and business strategies.

“We have seen ASIC take more action against Directors in recent times and recommend that Directors are across all the significant estimates and judgements in their financial reports, including ensuring material disclosures are appropriate, complete and accurate. In an uncertain economic environment, more estimates and judgements are required in financial reporting particularly when incorporating forward-looking information,”

Rene Muller, Partner SW Assurance and Advisory Division

The particular market conditions highlighted by ASIC as those representing changing circumstances, uncertainties and risks are:

• availability of skilled staff and expertise, which can impact on revenue and costs
• impact of rising interest rates on future cash flows and on discount rates used in valuing assets and liabilities
• inflationary impacts that may differ between costs and income
• increases in energy and oil prices
• geopolitical risks, including the Ukraine/Russia conflict
• impacts of climate change, climate related events and transitioning to ‘net zero’
• technological changes and innovation
• COVID-19 conditions and restrictions during the reporting period
• changes in customer preferences and online purchasing trends
• discontinuation of financial and other support from governments, lenders and lessors
• legislative and regulatory changes
• other economic and market developments.

How SW can help

Our team of audit and assurance experts are fully informed of the ASIC focus areas and can assist with providing guidance for your year-end financial reporting, as well as keeping you abreast of developments from an Australian reporting context.

Reach out to our key contacts here for a conversation.

Key contacts

Jimmy Cao

The post ASIC focus areas for 30 June 2023 reporting appeared first on SW Accountants & Advisors.

This year, the series was delivered online with a focus on topics of particular relevance and importance to our clients in 2023, and also provided a general update on what’s new in financial reporting.

Series details

Webinar 1: Financial Reporting update for 30 June 2023

Our experts provided insight and an update on:

• Accounting standard changes
• Key focus areas for 30 June 2023 reporting
• ASIC update
• Corporate governance update
• Sustainability standards
• Other regulatory changes

Webinar 2: Financial Reporting update for 31 December 2023

Our experts covered:

• Accounting standard changes
• Key focus areas for 31 December 2023 reporting
• ASIC update
• Corporate governance update
• Sustainability standards
• Other regulatory changes

Series experts

Tom Mullarkey
Partner, Assurance and Advisory Services
SW 

René Muller
Partner, Assurance and Advisory Services
SW 

Jimmy Cao
Associate Director, Assurance and Advisory Services
SW 

James Serpell
Senior Manager, Assurance and Advisory Services
SW 

Contact us

If you have any queries or would like more information, please contact the Marketing team via marketing@sw-au.com.

The post Financial Reporting Webinar Series appeared first on SW Accountants & Advisors.

This announcement on Friday 3 June effectively removes annual special purpose financial statements as an option for AFSL holders.

Under the new reporting requirements, many AFS licensees’ annual financial reports must be prepared in accordance with the disclosure requirements of all Australian Accounting Standards as set by the Australian Accounting Standards Board (AASB). Some AFS licensees will be able to apply a simplified disclosure regime.

Some AFSL holders will also be able to choose to defer these changes by one year, if they meet the requirements described below.

Changes to AFSL reporting requirements

From financial years commencing 1 July 2021, entities preparing financial statements in accordance with the Corporations Act 2001 (the Act) can no longer prepare special purpose financial reports (SPFRs) that do not contain all disclosures required by the accounting standards set by the AASB.

All entities must apply the full recognition and measurement requirements for assets, liabilities, income and expenses. Accounting standards, however, allow entities that do not have public accountability to use a simplified disclosure regime.

Entities that have public accountability must comply with the disclosure requirements of the full standards.

An entity has public accountability where:

• its debt or equity instruments are currently, or in the process of being, traded in a public market, or
• it holds assets in a fiduciary capacity e.g. entities that hold client monies.

ASFL entities with Public Accountability

For the avoidance of doubt of ‘Public Accountability’, ASIC has also stated that the following entities will be required to comply with the disclosure requirements of all AASB standards:

• Large or sophisticated licensees with greater market impact
• Regulated by the Australian Prudential Regulatory Authority
• Participants in a licensed market
• Participants in a clearing and settlement facility
• Retail over-the-counter derivative issuers
• Wholesale electricity dealers
• Corporate advisors that deal in financial products
• Over-the-counter derivative traders
• Wholesale trustees
• Responsible entities of a registered scheme
• Corporate directors of a corporate collective investment vehicle
• Providers of a custodial or depository service
• Operators of an investor directed portfolio service.

All licensees will be required to prepare a cash flow statement. In addition to single entity financial statements, consolidated financial statements must be presented where the licensee has controlled entities.

Option to defer by 12 months

AFS licensees that prepared SPFRs last year, and that do not prepare reports under Chapter 2M, can choose to defer the new disclosure requirements to financial years commencing on or after 1 July 2022, i.e. until 30 June 2023.

In deciding whether to defer adoption of this standard, AFSL holders should consider the costs and benefits of adopting the new reporting framework from 1 July 2021 vs deferring to 1 July 2022.

Investors, lenders and other stakeholders may have an expectation of the entity to comply with disclosure requirements of Australian Accounting Standards and might have concerns about the quality of the entity’s financial reporting if the entity continues to prepare special purpose financial statements in FY22. However, adopting a new financial reporting framework is likely to incur additional compliance costs.

We recommend that AFSL holders reach out to their trusted SW advisor to discuss the most suitable approach for 30 June 2022.

Transitional relief

Comparative information need not contain the new disclosures in the first report prepared under the new requirements.

Update form FS70

We are expecting ASIC to release an amended version of form FS70 in late June

Action to Be Taken

Consider whether the entity would be required to comply with the full disclosure requirements of all AASB standards (Tier 1); or can apply simplified disclosures (Tier 2)

• Consider whether the entity qualifies for a 12 month deferral and whether deferring would be beneficial
• Update the financial statement template as soon as possible to avoid last minute problems

Reference

ASIC media release 3 June 2022: 22-128MR ASIC announces financial reporting changes for AFS licensees

Important Dates

Annual reporting periods beginning before 1 July 2021 i.e. financial year ending 30 June 2022

How SW can assist

Contact René, Rami or your trusted SW expert for assistance to:

• assess whether deferral of adoption is beneficial or detrimental to the company
• migrate and prepare new reports under AASB reporting requirements.

The post ASIC announces financial reporting changes for AFS licensees appeared first on SW Accountants & Advisors.

This year, the series will be delivered online, and sessions are spread across the year with a focus on topics of particular relevance and importance to our clients in 2022, and also provide you with a general update on what’s new in financial reporting.

Series details

Webinar 1 (28 April 2022): Share-based payments

This session delved into the key tax and accounting issues surrounding share-based payments with insightful worked examples. The webinar covered:

• Overview and background
• Recent changes to tax legislation
• What is a share-based payment?
• Vesting conditions
• Recognition and measurement – worked example
• Valuation methodologies

Webinar 2 (19 May 2022): Financial services

Our experts focused on financial services and provided an update on:

• Regulatory update – accounting standards, regulatory bodies
• SIV fund compliance update
• AFSL compliance update including transition to general purpose financial reporting
• Tax update for financial services

Webinar 3 (9 June 2022): Financial Reporting update for financial year end 30 June 2022

Our experts provided insight and an update on:

• Accounting standard changes
• Key focus areas for 30 June 2022 reporting
• ASIC update and focus areas
• Corporate governance update
• Other regulatory changes

Webinar 4 (17 November 2022): Financial Reporting update for financial year end 31 December 2022

Our experts will cover:

• Accounting standard changes
• Key focus areas for 31 December 2022 reporting
• ASIC update and focus areas
• Corporate governance update
• Other regulatory changes

Series experts

René Muller
Partner, Assurance and Advisory Services
SW 

Tom Mullarkey
Partner, Assurance and Advisory Services
SW 

Jimmy Cao
Associate Director, Assurance and Advisory Services
SW 

Justin Batticciotto
Associate Director, Tax
SW

Vikas Nahar
Director, Corporate Finance 
SW

Bessie Zhang
Partner, Assurance and Advisory Services
SW

Rami Eltchelebi
Partner, Assurance and Advisory Services
SW 

Simon Tucker
Director, Tax 
SW

Brent Sheers
Senior Manager, Assurance and Advisory Services
SW

Mark Smit
Associate Director, Assurance and Advisory Services
SW 

Contact us

If you have any queries or would like more information, please contact the Marketing team via marketing@sw-au.com.

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