ASIC has released its areas of focus for 30 June 2022 reporting. ASIC urges greater focus on material, entity specific business risk disclosures in the Operating and Financial Review (OFR).

ASIC encourages listed entities to consider adopting recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) as their primary framework for voluntary climate change-related disclosures. Such disclosures may be included in the OFR as they relate to material business risks.

Uncertainties and changing market conditions

ASIC included a non-exhaustive list of factors to be considered in the circumstances of individual entities:

Government & geopolitical

  • Evolving COVID-19 restrictions in different jurisdictions
  • Commitments and policies on climate and carbon emission
  • Discontinuation of financial support
  • Russia/Ukraine conflict

Financial & commodity prices

  • Impact of rising interest rate on future cashflow and discount rates used in the valuation of assets and liabilities
  • Increases in oil prices

Market & customers

  • Customer preferences and purchasing trends
  • Technological changes and development


  • Shortage of skilled staff
  • Use of virtual meetings
  • Flexible working arrangements

Uncertainties and market conditions may change from period to period and may lead to a wide range of valid judgements on asset values and other accounting estimates. Directors should ensure that the circumstances in which judgements and forward-looking information have been made, and the underlying assumptions and rationale for those judgements, are properly considered, documented and appropriately disclosed due to their value and importance to investors.

ASIC has also highlighted the importance of the OFR in complementing the financial report to tell users how the entity’s business has been impacted by both COVID-19 and non-COVID-19 factors. The OFR should explain the underlying drivers of the results and financial position, as well as the material business risks that may affect achievement of the entity’s strategies and future prospects.

Many entities are facing uncertainties about future economic and market conditions and the impact on their businesses. These uncertainties place increased pressure on many judgements, estimates and assessments made for financial reporting purposes.

We agree with the importance of documenting the process and results of consideration by those charged with governance of key judgements on estimates and forward looking information.

Disclosures in the financial report about uncertainties, key assumptions and sensitivity analysis will continue to be important to investors.

We encourage directors to take the time to critically consider the uncertainties they may face and how these have been reflected in the financial report.

Michael Voogt

Focus areas for 30 June 2022

The areas of focus identified by ASIC are broad, with the five major themes being:

  • Asset values
  • Provisions
  • Solvency and going concern assessments
  • Events occurring after the reporting date
  • Disclosures (in the financial report and the OFR)

Read further discussion on each of these areas, including guidance for preparers to consider in addressing the focus areas, in our Reporting Update.

Download Reporting Update

Find out more