Australia Financial Statements

Australia Financial Statements

Australia Financial Statements Skill v1.2

Section 1 -- Quick Reference

Quick Reference

Field	Value
Country	Australia (Commonwealth of Australia)
Currency	AUD
Filing authority	Australian Securities and Investments Commission (ASIC)
Primary legislation	Corporations Act 2001 (Cth), Chapter 2M
Supporting legislation	Corporations Regulations 2001; ASIC Regulatory Guides
Accounting standards	Australian Accounting Standards (AASB) — substantially IFRS-equivalent
Financial year	Usually 1 July – 30 June; any 12-month period permitted
Lodgement deadline	4 months after year-end (general); 3 months (disclosing entities)
Late lodgement penalty	Civil penalty; ASIC may impose up to AUD 1,110 per day
Digital filing	ASIC Regulatory Portal (online Form 388 lodgement)

Section 2 -- Reporting Framework

Reporting Framework by entity type

Entity type	Applicable standard
Listed entities / disclosing entities	Full AASB (Tier 1 — IFRS equivalent)
Large proprietary companies	AASB (Tier 1 or Tier 2 — Simplified Disclosures)
Small proprietary companies (reporting)	AASB (usually Tier 2 — Simplified Disclosures)
Small proprietary companies (non-reporting)	Generally no public reporting obligation
Public companies	AASB (Tier 1 or Tier 2)
Not-for-profit (large)	AASB with NFP-specific paragraphs

AASB Tier system

• Tier 1 — Full IFRS recognition, measurement, and disclosure (AASB 101–AASB 17) (AASB 101–AASB 17)
• Tier 2 — Simplified Disclosures — Same recognition and measurement as Tier 1, reduced disclosures (AASB 1060) (AASB 1060)
• Which tier applies — Whether general purpose financial statements are required, and whether Tier 2 is available, turns on public accountability and the applicable legislation, not company size alone. Calling accounts special purpose does not avoid the standards where general purpose statements are required. (AASB 1060)
• AASB 18 from 1 January 2027 — AASB 18 replaces AASB 101 for relevant for-profit Tier 1 entities for annual periods beginning on or after 1 January 2027, with earlier application permitted; the test is the start of the reporting period, not the signing date. ED 341 proposes aligning AASB 1060 with AASB 18 and is an exposure draft, not an operative standard, so do not impose the Tier 1 timetable on Tier 2 accounts. (AASB, AASB 18 issued; AASB, ED 341)

Section 3 -- Size Thresholds

Large proprietary company (s.45A Corporations Act)

• Large company test — A proprietary company is large for a financial year if it satisfies at least 2 of 3 criteria. (s.45A Corporations Act)

Large proprietary company thresholds (s.45A Corporations Act)

Criterion	Threshold (from 1 July 2019)
Consolidated revenue	≥ AUD 50,000,000
Consolidated gross assets (year-end)	≥ AUD 25,000,000
Employees (year-end)	≥ 100

• Small company fallback — If fewer than 2 criteria are met → small proprietary company. (s.45A Corporations Act)
• Measure on the statutory basis — Apply the consolidated thresholds at the statutory measurement dates with the controlled-entity rules, and record the company type, ownership and control, reporting period, fundraising history and any regulator or member direction, because each can create a reporting duty independently of size. (ASIC, Company financial reports)

Reporting obligations by entity type

Reporting obligations by entity type

Entity	Must prepare financial report?	Must lodge with ASIC?	Must audit?
Large proprietary	Yes	Yes (Form 388)	Yes
Small proprietary (general)	No (unless directed)	No	No
Small proprietary (foreign-controlled)	Yes	Yes	Yes
Small proprietary (CSF shareholders)	Yes	Yes	Yes (or review)
Public company	Yes	Yes	Yes
Disclosing entity	Yes	Yes	Yes

Section 4 -- Required Financial Statements

• Statutory basis — Under s.295 and s.296 Corporations Act + AASB standards (s.295, s.296 Corporations Act)
• Presentation choices — Include comparatives, check permitted exceptions such as the AASB 1060 option for a combined statement of income and retained earnings, and analyse functional and presentation currency under AASB 121; Australian dollar presentation is not compulsory in every case. Public companies also check the consolidated entity disclosure statement requirements. (ASIC, Company financial reports)

Required Financial Statements (s.295, s.296, s.298–300, s.295(4) Corporations Act)

Document	Tier 1 (Full AASB)	Tier 2 (Simplified)
Statement of Financial Position (Balance sheet)	Required	Required
Statement of Profit or Loss and Other Comprehensive Income	Required	Required
Statement of Changes in Equity	Required	Required
Statement of Cash Flows	Required	Required
Notes to the Financial Statements	Required (full IFRS)	Required (reduced — AASB 1060)
Directors' Report (s.298–300)	Required	Required
Directors' Declaration (s.295(4))	Required	Required
Auditor's Report	Required	Required

Section 5 -- Year-End Adjustments Checklist

Year-End Adjustments Checklist

#	Adjustment	Australia-specific notes
1	Depreciation	AASB 116; systematic allocation; annual review of useful life and residual value
2	Provisions	AASB 137; present obligation, probable outflow, reliable estimate
3	Employee benefits	AASB 119; annual leave, long service leave (probability-weighted for LSL < 7 years)
4	Impairment	AASB 136; compare carrying amount to recoverable amount
5	Expected credit losses	AASB 9; simplified approach for trade receivables (lifetime ECL)
6	Inventory	AASB 102; lower of cost (FIFO/weighted average) and NRV; no LIFO
7	Deferred tax	AASB 112; temporary differences; company rate 25% (base rate entity) or 30%
8	Lease accounting	AASB 16; right-of-use asset + lease liability (exemptions for short-term/low-value)
9	Revenue recognition	AASB 15; five-step model; performance obligations
10	Financial instruments	AASB 9; classification and measurement; hedge accounting
11	Foreign currency	AASB 121; monetary items at closing rate
12	Government grants	AASB 120; recognised when reasonable assurance of compliance

• Reconcile and support each adjustment — Reconcile the trial balance to ledgers and external evidence, and review revenue cut-off, inventories, receivables, leases, asset values, provisions, employee benefits, tax, related parties, subsequent events and going concern against the relevant standard rather than copying tax depreciation or deductibility into the accounts. For each adjustment retain the calculation, evidence, accounting conclusion and disclosure effect, and reconcile opening balances to the approved prior report and closing cash to the cash flow statement.

Section 6 -- Statement of Profit or Loss Format

AASB 101 permits classification by nature or function. By function (most common for corporates):

Revenue
Cost of sales
  ─── Gross profit ───
Other income
Distribution expenses
Administrative expenses
Other expenses
  ─── Operating profit ───
Finance income
Finance costs
Share of profit of associates/JVs
  ─── Profit before income tax ───
Income tax expense
  ─── Profit from continuing operations ───
Profit from discontinued operations (net of tax)
  ─── Profit for the year ───

Other comprehensive income:
  Items that will not be reclassified to profit or loss
  Items that may be reclassified to profit or loss
  ─── Total comprehensive income for the year ───

Section 7 -- Statement of Financial Position Format

AASB 101 — current/non-current distinction:

ASSETS

Current assets
  Cash and cash equivalents
  Trade and other receivables
  Inventories
  Current tax assets
  Other current assets

Non-current assets
  Property, plant and equipment
  Right-of-use assets
  Investment properties
  Intangible assets
  Goodwill
  Investments in associates
  Deferred tax assets
  Other non-current assets

Total assets

─────────────────────────────────────

LIABILITIES

Current liabilities
  Trade and other payables
  Borrowings (current portion)
  Lease liabilities (current)
  Current tax liabilities
  Provisions (current)
  Other current liabilities

Non-current liabilities
  Borrowings
  Lease liabilities
  Deferred tax liabilities
  Provisions (non-current)
  Other non-current liabilities

Total liabilities

─────────────────────────────────────

NET ASSETS

EQUITY
  Issued capital
  Reserves
  Retained earnings
Total equity

Section 8 -- Notes to Financial Statements

Notes to Financial Statements

#	Disclosure	Tier 1 (Full)	Tier 2 (Simplified)
1	Basis of preparation and accounting policies	Required (AASB 101)	Required (AASB 1060)
2	Revenue disaggregation	Required (AASB 15)	Simplified
3	Employee benefits	Required (AASB 119)	Simplified
4	Income tax	Required (AASB 112)	Simplified
5	Property, plant and equipment	Required (AASB 116)	Simplified
6	Leases	Required (AASB 16)	Simplified
7	Financial instruments	Required (AASB 7)	Significantly reduced
8	Related party transactions	Required (AASB 124)	Required
9	Contingencies and commitments	Required (AASB 137)	Required
10	Subsequent events	Required (AASB 110)	Required
11	Key management personnel compensation	Required (AASB 124)	Required
12	Segment information	Required (AASB 8) — listed only	Not required

Section 9 -- Filing (Lodgement) Requirements

Filing (Lodgement) Requirements (s.340)

Item	Detail
Filing authority	ASIC
Filing form	Form 388 (Copy of Financial Statements and Reports)
Lodgement method	ASIC Regulatory Portal (online)
Deadline — disclosing entities	3 months after financial year-end
Deadline — all others	4 months after financial year-end
Documents lodged	Financial report + directors' report + auditor's report
Fee	No filing fee for Form 388
Late lodgement	Civil penalty provisions; ASIC may impose administrative penalties
Annual review fee	Separate from lodgement (AUD 310 for proprietary companies, 2024)
Extension	Possible by application to ASIC under s.340

• Half-year and sustainability reports — Disclosing entities also lodge half-year reports, generally within 75 days of the half-year end. Screen separately for mandatory climate-related sustainability reporting under Chapter 2M, which commences in phases and is a separate statutory report. (ASIC, Users of financial reports; ASIC Regulatory Guide 280)

Small proprietary companies — exceptions requiring lodgement

• Foreign-controlled — Foreign-controlled (s.292(2)(b)) (s.292(2)(b))
• ASIC direction — ASIC direction (s.294) (s.294; s.294))
• Shareholder direction — Shareholder direction (≥5% vote, s.293) (s.293; s.293))
• CSF shareholders — CSF shareholders (s.292(2)(c)) (s.292(2)(c))
• CSF audit threshold — A proprietary company with CSF shareholders prepares annual financial and directors' reports; the audit requirement applies once it has raised $3 million or more through CSF offers, and a review is not a general substitute for that audit. (ASIC, Crowd-sourced funding)
• Companies limited by guarantee and charities — Public companies limited by guarantee and ACNC-registered charities follow their own reporting rules, and foreign-controlled company relief has conditions and procedural requirements. Retain the legal basis and evidence for any exemption relied on. (ASIC, Company financial reports)

Section 10 -- Audit Requirements

Audit Requirements (s.292)

Category	Requirement
Large proprietary company	Mandatory audit
Small proprietary (general)	No audit required
Small proprietary (foreign-controlled)	Audit required (unless ASIC relief)
Public company	Mandatory audit
Disclosing entity	Mandatory audit
Registered scheme	Mandatory audit
Small proprietary (CSF shareholders)	Audit or review (s.292)

ASIC relief instruments

• ASIC Corporations (Audit Relief) Instrument 2016/784 — Allows certain large proprietary companies controlled by a foreign parent to obtain audit relief if consolidated accounts of the foreign parent are lodged (ASIC Corporations (Audit Relief) Instrument 2016/784)
• ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204 — Relief for certain small foreign-controlled proprietary companies (ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017/204)

Auditor qualification

• Registered company auditor — Registered company auditor under Part 9.2 of the Corporations Act (registered with ASIC). For audit of disclosing entities, the auditor must meet additional independence requirements under Part 2M.4 Division 3. (Part 9.2 Corporations Act; Part 2M.4 Division 3 Corporations Act; s.292))
• Appointment and sign-off sequence — Confirm the auditor's appointment and engagement early, resolve audit adjustments before the directors approve the report, and retain the signed report, directors' approval, audit report, member delivery evidence and lodgement receipt. Do not describe an unaudited draft as audited, and confirm that the lodged document is the approved version.

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.

Contributed by Ryan Duguid.