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Navigating ASIC's Focus Areas for Dec 2023 Reporting


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In the latest development from the Australian Securities and Investments Commission (ASIC), significant guidelines have been issued, shedding light on key focus areas for financial statement preparers and auditors until the conclusion of the reporting period on 31 December 2023. This regulatory update underscores ASIC's commitment to ensuring transparency and accuracy in Australian financial reporting. The biannual release of guidelines strategically addresses historical instances of non-compliance and proactively anticipates emerging challenges faced by preparers, providing a comprehensive approach to the evolving financial landscape.

Understanding ASIC's Focus Areas for 31 December 2023 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. 

amortized cost

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.

New Insurance Accounting Standard

Insurers with years or half-years ending 31 December 2023 are reminded to adhere to the recognition and measurement requirements of the new standard, incorporating necessary disclosures on changes in accounting policies upon adoption.

Other Matters

Consideration of off-balance sheet exposures, recognition of assets, liabilities, income, and expenses in registered scheme balance sheets, and obligations for large proprietary companies previously 'grandfathered' are underscored. 


In conclusion, ASIC's guidelines for the 31 December 2023 reporting period highlight critical areas in financial reporting. From asset valuation to credit losses and disclosure practices, these guidelines address key aspects of the evolving landscape. Stay tuned to our official social media accounts for continuous updates, and we appreciate your attention and collaboration as we navigate these important reporting requirements together.


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