australia-financial-statements

Files (1)

• SKILL.md

SKILL.md (first lines)

# Australia Financial Statements

## Australia Financial Statements Skill v1.2

## Section 1 -- Quick Reference

**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](https://standards.aasb.gov.au/aasb-1060-aug-2025))_
- **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](https://www.aasb.gov.au/news/new-standard-aasb-18-issued/); [AASB, ED 341](https://www.aasb.gov.au/news/open-for-comment-ed-341-updating-aasb-1060-to-align-with-aasb-18-classification-and-presentation-requirements/))_

## 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](https://www.asic.gov.au/for-business-and-companies/companies/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](https://www.asic.gov.au/for-business-and-companies/companies/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

From openaccountants/openaccountants, AGPL-3.0.

More from openaccountants/openaccountants