Australian Securities and
Investments Commission update - financial reporting relief
ASIC Class Order CO 07/505 Variation and revocation of
financial reporting instruments, has recently been released to
reflect recent changes in the Corporations Act.
Following amendments contained in the Corporations Legislation
Amendment (Simpler Regulatory System) Act 2007, a company is now
classified as large proprietary company if it meets two of the
following three criteria:
- consolidated revenue for the financial
year of the company and the entities that it controls exceeds
$25 million;
- the value of the consolidated gross
assets of the company and the entities that it controls is $12.5
million or more; and
- the company and the entities that it
controls have 50 or more employees at the end of the financial
year.
If the company does not meet two of these criteria it is
classified a small proprietary company.
Under Class Order CO 98/98 Small proprietary companies which
are controlled by a foreign company but which are part of a large
group, relief is provided to such companies to prepare and lodge
a financial report provided that the company is not part of a large
group. The large group definition applies the large/small
proprietary company test to an aggregation of proprietary companies,
its sister companies in Australia and their controlled entities.
Class Order CO 07/505 has amended the large group test to be
consistent with the large/small test.
Under Class Order CO 98/98, relief is normally available when the
directors of the company have passed resolutions that relief has
been obtained under the class order and that this relief has been
obtained three months prior to the commencement of the year to which
it relates, and that the resolutions have been lodged with ASIC
using Form 384. This relief has been amended to permit companies
with year-ends between 28 June 2007 and 30 June 2008 to lodge Form
384 four months after year-end or 31 October 2007, whichever is
earlier.
Class Order CO 02 /1432 Registered foreign companies - financial reporting requirements, which was issued in 2002,
provided relief to small registered foreign companies that are
subject to similar requirements of small proprietary companies to
lodge financial statements including the large group test. The large
group test in Class Order CO 02/1432 has been amended by Class Order
CO 07/505, consistent with the new criteria for large/small
companies.
Class Order CO 07/505 has also made a number of consequential
amendments to Class Order CO 98 /96 Synchronisation of financial
year with foreign parent company to reflect the large/small test
amendments.
In addition, Class Order CO 05/83 Timing of auditor's
independence declaration and Class Order CO 05/910 Auditor's
independence declaration - exemption have been revoked as their
contents were reflected in the recent amendment to the Corporations
Act.
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