ASIC has released its focus areas for 31 December 2018 financial reports with a call to focus on new accounting standards.
ASIC has called on companies to focus on new requirements that can materially affect reported assets, liabilities and profits.
Both full and half-year reports at the end of year must comply with new accounting standards on revenue recognitions and financial instrument values, including hedge accounting and loan loss provisioning.
The reports must disclose the future impact of new lease accounting requirements as well as the definition and recognition criteria for assets, liabilities, income and expenses.
ASIC commissioner John Price said it was important for directors and management to ensure that they were prepared for the new standards.
“We are concerned that some companies may not have adequately prepared for the impact of new accounting standards that can significantly affect results reported to the market by companies, require changes to systems and processes, and affect businesses.
“We will monitor these areas closely and will take action where required.”
The changes may significantly affect how and when revenue can be recognised, the values of financial instruments and other issues warns ASIC.
ASIC, in its release, said that any company that has not already done so should determine the extent of the new standard’s impact and reminded them that a timely implementation is important for investors.
The commission reminded directors that they are primarily responsible for the quality of the report, which included ensuring it was produced on a timely basis.
ASIC will review more than 85 full year reports at 31 December 2018 and selected half-year reports.
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