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ASIC Focus Areas for 30 June 2024 Reporting

Financial Report

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The Australian Securities and Investments Commission (ASIC) provides biannual guidance to financial statement preparers and auditors on key focus areas for financial statement and audit surveillance for periods ending 30 June and 31 December. These focus areas target the most significant and common non-compliance issues with Australian Accounting Standards and audit deficiencies, as well as emerging challenges. This article will provide you with a thorough exploration of ASIC latest guidelines, spotlighting their focus areas for financial statement preparers and auditors during the reporting period ending 30 June 2024.

Understanding ASIC's Focus Areas for 30 June 2024 Reporting:

Assets Value

Impairment of Non-Financial Assets

Entities are reminded of the responsibility to conduct an annual impairment test for goodwill, indefinite useful life intangible assets, and intangible assets not yet available for use. In the current economic climate, entities facing adverse impacts are urged to assess new or continuing indicators of impairment that require impairment testing for other non-financial assets. ASIC underscores the significance of evaluating key assumptions supporting the recoverable amount of non-financial assets. The valuation method used for impairment testing should be not only appropriate but also founded on reasonable and supportable assumptions, cross-checked for reliability.

Market capitalization is cautioned as an inappropriate fair value estimate for a business. It may serve as an impairment indicator or in a cross-check. Share prices may reflect small portfolio transactions, and business sales in illiquid markets may occur. Applying market capitalization-to-revenue ratios for cross-checks is advised, but data limitations and comparable business considerations are crucial. Disclosure of estimation uncertainties, changing key assumptions, and sensitivity analysis or information on probability-weighted scenarios is emphasised.

Values of Property Assets

Property asset valuation is evolving beyond traditional metrics. Preparers are advised to consider factors such as changes in tenant office space requirements, online shopping trends, and the financial conditions of tenants. Lease accounting requirements and the impairment of lessee right-of-use assets are highlighted as areas of special attention.

Expected Credit Losses (ECLs) on Loans and Receivables

Entities are urged to focus on Expected Credit Losses (ECLs). This involves assessing the reasonableness and supportability of key assumptions, ensuring access to reliable and up-to-date information about borrowers and debtors, and considering short-term liquidity issues, financial conditions, and earning capacity. Forward-looking assumptions, accurate aging of receivables, and disclosure of estimation uncertainties and key assumptions are essential.

Financial Asset Classification

Ensuring proper measurement at amortized cost, fair value through other comprehensive income, or fair value through profit and loss is paramount. The criteria for using amortized cost, such as assets are held in a business model whose objective is to hold the assets to collect contractual cash flows and contractual terms give rise on specific dates to cash flows that are solely payments of principal and interest on the principal outstanding, should be rigorously adhered to.

Value of Other Assets

In addition to the core focus areas, entities are reminded to assess the net realizable value of inventories, the realization of deferred tax assets, and the valuation of investments in unlisted entities.


Consideration of provisions for onerous contracts, leased property makes good, mine site restoration, financial guarantees given, and restructuring is highlighted as a critical aspect.

Subsequent Events

Reviewing events occurring after year-end becomes crucial, focusing on their potential impact on assets, liabilities, income, or expenses.


Directors and preparers are advised to adopt an investor-centric approach when disclosing information in financial reports and Operating and Financial Review (OFR). Disclosures should be specific, considering changes from the previous period, and the appropriateness of asset and liability classifications should be emphasized.

The OFR should provide a comprehensive overview of the impact of economic and market conditions on the entity’s businesses, results, and prospects. Risks, management strategies, and future prospects should be transparently explained, with specific attention to climate change and cybersecurity risks.

For non-IFRS financial information, any presentation of non-IFRS profit measures in the OFR or market announcements should adhere to a standard of transparency, avoiding potentially misleading information.

Other Matters

‘Grandfathered’ Large Proprietary Companies

For financial years ending on or after 10 August 2022, large proprietary companies that were previously ‘grandfathered’ must now lodge audited financial reports with ASIC. This marks the second year of this requirement. These companies are now part of ASIC’s financial reporting and audit surveillance program.

Registrable Superannuation Entities (RSEs)

For the first time, superannuation trustees must lodge audited financial reports for most RSEs with ASIC. Reports for the 2023-24 financial year must be lodged within three months of the fund's year-end. ASIC emphasizes the importance of timely lodgement and adherence to relevant accounting standards. RSEs will also be included in ASIC’s financial reporting and audit surveillance program.


As we navigate the intricacies of financial reporting, the focus on the integrity of asset valuation remains paramount. ASIC's guidelines serve as a compass for financial statement preparers and auditors, ensuring compliance with Australian Accounting Standards and effectively addressing emerging challenges. As we approach the reporting period ending 30 June 2024, the insights shared in this newsletter aim to equip you with the knowledge needed for a robust and transparent reporting process.


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