The Australian Securities & Investments Commission is highlighting asset values, provisions, solvency and going-concern assessments for reporting periods that ended 31 December.
ASIC commissioner Sean Hughes said, ‘COVID-19 conditions have continued through 2021 and companies will be affected differently depending on their industry, where they operate, how their suppliers and customers are affected, and a range of other factors.’
The commission calls on directors, financial-report preparers and auditors to focus on several key areas, including events occurring after year-end and before completing reports, and disclosures in reports.
Entities may continue to face some uncertainties about future economic and market conditions and their impact on business. Assumptions underlying estimates and assessments should be reasonable and supportable.
Uncertainties may lead to a wider range of valid judgements on asset values and other estimates. Uncertainties may also change from time to time. Disclosures in financial reports about uncertainties, key assumptions and sensitivity analysis will be important to investors.
ASIC’s FAQs on the pandemic’s effects inform on matters such as:
- Focus areas and factors to consider
- Disclosures in financial reports
- The use of non-IFRS financial information
- Loan and receivable provisioning
- Non-COVID-19 focus areas
- The extensions of time for financial reporting and AGMs, and
- Reporting by auditors
