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Are you ready for your first year of mandatory General Purpose Financial Reporting?

Are you ready for your first year of mandatory General Purpose Financial Reporting?

As reported in our past articles in February 2021 and September 2021, the ability for various for-profit entities to produce special purpose financial statements (SPFS) has been removed from 1 July 2021.

Many entities are now required to produce General purpose financial statements under the new Tier 2 Simplified disclosure standards regime (SDS).

  • unlisted public companies;
  • large proprietary companies (including grandfathered entities);
  • AFSL licensees;
  • small proprietary companies that have raised funding via crowd sourcing.

Some companies had early adopted these changes – however, there remain many that will be needing to adopt these changes for the first time from 1 July 2021 mandatorily.

We have seen from advising the early adopters, as well as those that are currently preparing for the transition, the changes under the new requirements are far from simply disclosures and formats – there are complicated considerations that require adequate time and resources to produce financial statements to adequately meet these requirements.

Examples of the complexities and the questions that are needing to be addressed include:

  • Do I need to prepare a consolidation and produce consolidated financial statements?
  • How does a deed of cross guarantee impact my reporting requirements?
  • Do I need to account for and disclose deferred tax positions?
  • Will I need to update comparative disclosures?
  • How, and to what extent, should I be disclosing related party transactions?
  • What is required for the key management personnel disclosure?
  • What is the impact on disclosure requirements for AASB 15 Revenue from contracts with customers, AASB 16 Leases, AASB 9 Financial instruments?
  • How do I explain the changes from SPFS to SDS in my report?

Chances are you will be answering “Yes” or “I need to understand this more” to many questions such as those above.

Our experience has shown that the implementation of the new requirements are not to be taken lightly and we strongly recommend careful attention is given to these reporting considerations as part of all companies currently preparing for their year end accounting and tax reporting considerations.

Your team at Kreston Stanley Williamson is experienced in guiding you through these significant changes – please do get in touch with a member of our team should you require assistance.

Kreston Stanley Williamson

Author – Kamal Thakkar

*Correct as of 19 April 2022

*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to 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 contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.

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