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AFSL Financial Reporting Update: What You Need to Know



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In 2022 ASIC announced its requirements for Australian Financial Services (AFS) licensees to complete general purpose financial statements – subject to some transitional requirements. 

So how does this impact 2023 financial reporting?


Implications for AFSL Holders

For some AFS Licensees including Responsible entities of managed investment schemes, and insurance and other brokers who hold client monies on trust, this is going to result in a substantial increase in your financial reporting requirements.  As due to ASICs media release you will now need to prepare Tier 1 financial statements with all the disclosures required by full AAS. 


AFS Licensees’ financial statements should have complied with all recognition and measurement requirements of AAS, however some may have not consolidated controlled entities on the basis that they are not a reporting entity.  In addition, many prepared SPFS with limited disclosures.  All AFS Licensees are now going to have to prepare consolidated financial statements (if you have controlled entities). Transitioning to Tier 1 or Tier 2 financial statements, will also result in a significant increase in the level of disclosures required. 


AFSL Holders
AFSL Holders

Timing of Transition

AFS Licensees that also have financial reporting obligations to report under chapter 2M of the Corporations Act, the new reporting obligations are applicable for years beginning on or after 1 July 2021 (30 June 2022 year-ends).  AFS Licensees that do not have reporting obligations under chapter 2M can elect to defer the new disclosure and consolidation requirements to financial years commencing on or after 1 July 2022 (30 June 2023 year-ends).  Accordingly, you can still prepare SPFS for 30 June 2022, as long as all recognition and measurement requirements of AAS, other than consolidation are complied with.  This provides these organisations with an additional 12 months, to work through the implications on their financial statements and enhance disclosures.  


Timing of Transition
Timing of Transition

Key features of AFS licensee financial reporting

In June 2022 ASIC announced the regulator's requirements for Australian Financial Services (AFS) licensees in implementing the new Australian financial reporting framework.


The announcement required all AFS licensees to complete a form of general-purpose financial statements (GPFS), that is they can no longer prepare of special purpose financial statements (SPFS). There was limited transition relief for financial years commencing  before 24 June 2022, for example years ended 30 June 2022.  all AFS licensees to complete a form of general-purpose financial statements (GPFS), that is they can no longer prepare of special purpose financial statements (SPFS). There was limited transition relief for financial years commencing  before 24 June 2022, for example years ended 30 June 2022.  all AFS licensees to complete a form of general-purpose financial statements (GPFS), that is they can no longer prepare of special purpose financial statements (SPFS). There was limited transition relief for financial years  commencing  before 24 June 2022, for example years ended 30 June 2022.


In respect of 30 June 2023 financial years, all AFS licensees must now prepare GPFS. The transitional relief may impact the disclosures made in the 2022 comparative information disclosed in the 2023 financial statements:

financial reporting
Financial Reporting

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