On Wednesday, ASIC announced the results after reviewing 85 listed entities, revealing the largest numbers of matters related to impairment of non-financial assets.
“Many companies have continued to make useful and meaningful disclosures on the impact of COVID-19 conditions. However, we still identify some entities with businesses adversely affected by the pandemic that did not appear to give sufficient attention to the reporting of asset values and financial position,” ASIC said in a statement.
“We recognise COVID-19 conditions may create uncertainties which necessitate the use of probability weighted scenarios. Disclosure of assumptions is key in this context.
“We continue to make inquiries where companies appear to have made unrealistic and unsupportable assumptions about future cash flows, and where disclosures did not clearly identify the impacts of COVID-19 conditions on the business.
“Our findings emphasise that directors and auditors need to focus on impairment of non-financial assets, particularly as businesses navigate through the continuing impacts of the COVID-19 pandemic.”
Another matter inquired about was operating and financial review; in one instance, no information had been provided about business strategies and the impacts of COVID-19 on key assumptions, while another entity indicated that the impacts of the pandemic on its business could not be determined.
Other matters addressed by ASIC included consolidation accounting, lease accounting, off-balance street arrangements, revenue recognition and provisions.
