In our December 2020 newsletter, we highlighted an essential update for businesses in Sydney. We informed you that starting from 1 July 2021 (for years ending 30 June 2022), for-profit private sector entities currently generating special purpose financial statements (SPFS) would be required to prepare general purpose financial statements (GPFS). This change is significant and will affect the accounting practises of businesses, emphasising the need for accountants in Sydney to adapt to the new regulations.
GPFS will be required for all for-profit private sector entities that:
- Are required to prepare financial statements per Australian Accounting Standards by legislation (i.e. the Corporations Act), or
- Where the constitution or other vital documents (e.g. bank loan agreement) required the preparation of financial statements per Australian Accounting Standards when such documents were created or amended on or after 1 July 2021.
The changes mean several types of for-profit entities will likely need to prepare GPFS, including:
- unlisted public companies
- large proprietary companies (including grandfathered entities)
- AFSL licensees
- small proprietary companies that have raised funding via crowd-sourcing
The framework has been further enhanced with a Simplified Disclosure regime which allows certain entities to adopt GPFS with less onerous disclosures than those of full GPFS.
Furthermore, as part of the changes, essential transitional reliefs are available for entities early in adopting the new standards that could save significant time in preparing the GPFS.
Over the coming months, we will provide further detailed guidance on preparing yourself for the changes.
If you need assistance transitioning to the new GPFS regime, please get in touch with your client manager at KSW.
Kreston Stanley Williamson Team
*Correct as of February 2021
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.
