In preparation for the mandatory adoption of the new Australian for-profit financial reporting framework ASIC has released its requirements for the types of financial statements that ASF licensees will need to prepare for financial years beginning on or after 1 July 2021 – for example, 30 June 2022.
Current state of play
In early June 2022 ASIC issued a media release announcing the regulators requirements for Australian Financial Services (AFS) licensees in implementing the new Australian financial reporting framework.
The Australian Accounting Standards Board (AASB) introduced a new Australian private sector financial reporting framework which first mandatory applies for financial years beginning on or after 1 July 2021, for example years ended 30 June 2022. The new framework effectively brings an end to special purpose financial statements (SPFS) for a number of entities – that is the removal of the ‘reporting entity framework’ which has been in place for the last 30 old years.
Further materials on the new Australian private sector financial reporting framework can be found on the KPMG website.
The change requires all AFS licensees to complete a form of general purpose financial statements (GPFS), that is they can no longer prepare SPFS. There is limited transition relief for financial years commencing before 24 June 2022, for example years ended 30 June 2022.
ASIC Form FS 70 is the instrument which gives legal effect of the changes announced by ASIC. ASIC issued the updated form on 1 July 2022. In addition, ASIC has issued some frequently asked questions which support ASIC Form FS 70. The attached PDF has been updated for the revised ASIC Form FS 70 and supporting frequently asked questions
KPMG comment
AFS licensees that hold client monies or assets will now need to ensure they prepare GPFS-Tier 1. As will those licensees classified as having a ‘greater market impact’ – that is, those on the large or sophisticated list. Other licensees can no longer prepare SFPS. This is consistent with the requirements of the new Australian financial reporting framework.
Michael Voogt
Director, Department of Professional Practice
Further detail on the above measures can be found in the PDF version of the Reporting Update.
