ASIC announce extension for unlisted entity financial reports due to COVID-19

ASIC announce extension for unlisted entity financial reports due to COVID-19

In further measures to ease pressure on businesses struggling due to COVID-19, ASIC have granted additional time for unlisted entity financial reporting and will extend particular deadlines by one month for balance dates from 31 December 2019 to 31 March.

The aim of extending such deadlines is to assist entities whose reporting processes take additional time due to changes to work protocols including remote working procedures, travel restrictions and other impacts of COVID-19.

ASIC has encouraged entities to continue lodging within statutory deadlines where there are requirements for information relevant to needs of shareholders, creditors and other users of their financial reports, or to meet borrowing covenants or other obligations.

Please note:

  • The extended deadlines will not apply for 31 December 2019 balance dates if the reporting deadline has already passed.
  • An instrument extending the deadlines is expected to be registered on the Federal Register of Legislation by the end of next week.

Below details the specific updates from ASIC:

For Listed Entities:

  • ASIC is continuing to monitor the possible impacts on listed entities that may affect financial reporting, talking to market participants and auditors, and considering possible impacts and responses.
  • Currently they do not recognise widespread indications of any significant issues for the relatively small number of listed entities with 31 March 2020 balance dates in meeting their full-year and half-year financial reporting obligations.
  • However, ASIC will consider specific applications for extension of deadlines for individual listed entities providing that apply 14 days before the deadline and provide sufficient information on the impacts of COVID-19

For non-listed (proprietary/unlisted public) entities:

The extended deadlines for the lodgement of financial reports, directors’ reports and audit reports for unlisted entities are summarised below. The deadlines are calculated as periods after balance dates and references to Chapters are to Chapters of the Corporations Act:

Lodgement deadline of: Full year financial reports, directors’ reports and auditors’ reports extended (under chapter 2M)

  • From 3 to 4 months for unlisted disclosing entities and for unlisted registered schemes
  • From 4 to 5 months for all other unlisted entities (and applies to public and proprietary companies that are not disclosing entities or registered schemes)

Note: an extension of the deadline for unlisted registered schemes to lodge compliance plan audit reports will automatically occur as a result of the extension for registered schemes. The period for auditors to complete the compliance plan audit report will be extended from 3 months to 4 months.

Lodgement of half year financial reports, directors’ reports and audit/review for unlisted disclosing entities (chapter 2M):

  • Extension of 1 month (normally 75 days – now 75 days plus 1 month)

Lodgement of profit and loss and balance sheets (+ associated information) extended (chapter 7):

  • From 3 months to 4 months for unlisted Australian Financial Services (AFS) licenses that are bodies corporate and are also disclosing entities or registered schemes
  • From 4 months to 5 months for unlisted AFS licensees that are body corporates and are not disclosing entities or registered schemes
  • From 2 months to 3 months for AFS licenses that are not bodies corporate

E.g. If the normal deadline for an unlisted public company that is not a disclosing entity to lodge its reports for year ended 31 March 2020 is 31 July 2020 – it is now extended to a 31st August 2020 deadline under these new changes.
(n.b. this only applies where normal reporting deadline has not already elapsed)

Regarding sending reports to members
Similar extended deadlines will be available for sending reports to members but note some of those deadlines also operate by reference to the date of the next AGM. ASIC media release 20-068MR Guidelines for meeting upcoming AGM and financial reporting requirements provides information on the ASIC ‘no action’ position for Annual General Meetings of public companies with 31 December 2019 year ends.

For grandfathered Proprietary companies:
Where a grandfathered proprietary company uses the extended deadline relief, it will continue to retain its grandfathered status. The directors’ report must disclose that the company has applied ASIC relief to report to members no later than 1 month after the normal reporting deadline.

ASIC has not yet announced any extensions for 31 May 2020 or 30 June 2020 year ends.

We strongly encourage companies to attempt to meet the existing deadlines and only rely of the extension if necessary. If you have any further questions or individual queries please feel free to get in touch with the Walker Wayland NSW Audit & Assurance team.