ASIC puts COVID disclosures under microscope

Lachlan Maddock
— 1 minute read

ASIC has issued a stern warning to companies that they must “tell the story” of how their business has been impacted by COVID-19 or face the consequences.

While companies may face “uncertainties about future economic and market conditions”, proper disclosure about the impact COVID has had on their business will be “vital”, according to ASIC. 

“In the current environment, the quality of financial reports and related disclosures is more important than ever for investors and to maintain confident and informed markets,’ said ASIC chair James Shipton. “Entities with businesses adversely affected by the COVID-19 pandemic should focus on the reporting of asset values and financial position.


“Investors will expect clear disclosure about the impacts on an entity’s businesses, any risks and uncertainties, key assumptions, management strategies and future prospects.”

ASIC warned that assumptions shouldn’t be “overly optimistic or pessimistic” and that it will review the financial reports of 200 larger listed entities that have been both positively and negatively affected by COVID-19. 

“Uncertainties may lead to a wider range of valid judgements on asset values and other estimates. Disclosures in the financial report about uncertainties, key assumptions and sensitivity analysis will be important to investors,” ASIC said in a statement. “The OFR should complement the financial report and tell the story of how the entity’s businesses are impacted by the COVID-19 pandemic.”

ASIC has extended the deadline for listed and unlisted companies to lodge financial reports, but warned that where possible they should lodge within the normal statutory deadlines.


ASIC puts COVID disclosures under microscope
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