ASIC focus areas for 30 June 2022 financial reports

The Australian Securities and Investments Commission (ASIC) recently issued a Media Release highlighting its focus areas for 30 June 2022 reporting. It is urging directors and preparers of 30 June 2022 annual and half-year financial reports to assess whether these provide useful and meaningful information for investors and other users.

Five focus areas

As part of its financial reporting surveillance program, ASIC reviews financial reports of a selection of listed and other public interest entities. The Media Release  highlights five areas that ASIC will focus on when it conducts these reviews:

While the immediate effects of COVID-19 may have subsided, entities continue to face changes in circumstances and uncertainties about future economic and market conditions, which may impact their business strategies and future financial performance. These uncertainties should be factored into the assumptions used for financial reporting purposes, and should be reasonable and supportable. Examples of changes in circumstances, uncertainties, and risks to be considered when preparing 30 June 2022 financial reports include those listed in the diagram below. This list is not exhaustive.

Examples of changes in circumstances, uncertainties, and risks

Asset values

ASIC’s focus on asset values relates to the following areas.

Financial statement area

Focus areas

Impairment of non-financial assets

  • Must conduct an annual impairment test for goodwill, indefinite-life intangible assets, and intangible assets not yet available for use.
  • Ensure impairment tests are conducted for other non-financial assets if there are new or continuing indicators of impairment.
  • Ensure key assumptions used to determine recoverable amounts are appropriate.
  • Estimation uncertainties must be disclosed, together with sensitivity analyses on probability-weighted scenarios.

Values of property assets

  • Factors that could adversely affect values of commercial and residential properties should be considered, including:
    • Changes in the office space needs of tenants due to more flexible work arrangements
    • Online shopping trends
    • Future economic and industry impacts on tenants
    • Financial condition of tenants
    • Restructured lease agreements.
  • Complex lease accounting requirements, treatment of rent concessions by lessors and lessees, and impairment of lessees’ right-of-use assets.

Note: Refer to our Lease Accounting webpage for more information about the complexities of lease accounting, including software solutions, training materials, and publications.

Expected credit losses (ECL) on loans and receivables

  • Appropriateness of key assumptions used to determine ECL, which should be reasonable and supportable.
  • The need for more up-to-date information about borrowers’ and debtors’ circumstances.
  • Short-term liquidity issues for some borrowers and debtors, as well as their financial condition and earnings capacity.
  • Past models and experience may not be representative of current expectations and probability-weighted scenarios may be needed.
  • Disclosure of estimation uncertainty and key assumptions.

Value of other assets

  • Value of inventories, including whether all estimated costs of completion and costs necessary to make the sale have been taken into account when determining net realisable value.
  • Whether probable that deferred tax assets will be realised.
  • The value of investments in unlisted entities.


While the need to consider adequacy of provisions for onerous contracts, financial guarantees given, and restructuring are consistent with focus areas noted previously, ASIC has added the following provisions to its list:

  • Leased property make good provisions
  • Mine site restoration provisions.

Solvency and going concern assessments

Entities should consider factors affecting the business which could impact the entity’s solvency and going concern assessment. These were highlighted in the diagram above.

Subsequent events

Entities should review events occurring after the end of the reporting period, in order to determine whether these are ‘adjusting’ or ‘non-adjusting’ post-balance date events.

Disclosures in the financial report and OFR

Lastly, entities should focus on ensuring adequate disclosures as outlined in the table below.


Focus areas

General considerations

  • Put yourselves in the shoes of investors and consider what information investors would want to know.
  • Disclosures should be specific to the entity (i.e. not boilerplate).
  • Consider changes from the previous period and disclose accordingly.

Disclosures in financial report

  • Disclose uncertainties and sensitivity analyses for key assumptions.
  • Explain where uncertainties have changed since the previous full-year or half-year financial report.
  • Consider appropriate current versus non-current classification of assets and liabilities in the balance sheet, having regard to maturity dates, payment terms, and compliance with debt covenants.

Disclosures in OFR

  • The OFR should complement the financial report and ‘tell the story’ of how the business has been impacted by the COVID-19 pandemic and changing circumstances.
  • Explain underlying drivers of results and financial position, as well as the risks, management strategies, and future prospects.
  • The most significant business risks at the whole-of-entity level. Refer to the note below for more information.
  • Climate change risk could have a material impact on future prospects. Directors should consider disclosing information under recommendations of the Task Force on Climate-Related Financial Disclosures.

Note: The Media Release notes that disclosing an exhaustive list of genetic risks that might potentially affect a large number of entities is not helpful. It emphasises that the OFR should include a discussion on environmental, social and governance (ESG) risks, and these risks should be described in context. For example, it could include discussion about:

  • Why the risk is important or significant
  • Potential impact of the risk
  • Where relevant, factors that are within management’s control.

Assistance and support by government and others (e.g. lenders and landlords)

  • Prominently disclose in the financial report and OFR:
    • Material amounts
    • Duration of support
    • Impact of its discontinuance.
  • For example: JobKeeper, land tax relief, loan deferrals and restructuring, and rent deferrals and waivers.

Non-IFRS financial information

  • Should not be presented in a misleading manner.
  • If asset impairment losses were excluded from a non-IFRS profit measure in a previous year, then reversals of impairment should also be excluded from the non-IFRS profit measure in subsequent years.

Disclosure in half-year financial reports

  • May need to include disclosure about significant developments and changes in circumstances since the 31 December 2021 half-year financial reports.

Need assistance?

Please contact our IFRS Advisory team if you need support with any financial reporting matters for your 30 June 2022 financial reports.