Key focus areas for ASIC’s 30 June 2026 financial reporting surveillance

The Australian Securities and Investments Commission (ASIC) conducts surveillance on the full-year financial reports of Australian entities as part of its financial reporting surveillance program. The surveillance program covers listed and unlisted companies (this includes previously ‘grandfathered’ large proprietary limited companies), registered superannuation entities (RSEs) and managed investment schemes. As a result of these risk-based reviews, ASIC conducts inquiries into matters of concern, and depending on the outcome, it may request that companies make changes to their financial reports or improve disclosures.

In its recent media release, ASIC noted for its 2026-2027 financial reporting surveillance that it will:

Monitor areas where significant judgement is required in preparing the financial report, specifically calling out revenue recognition, asset impairment, recognition and measurement of financial instruments
Review disclosures for provisions for decommissioning and site restoration costs under AASB 137 Provisions, Contingent Liabilities and Contingent Assets against the new illustrative examples regarding uncertainties in financial statements (specifically illustrative example D of AASB 137)
Continue to focus on non-lodgement of financial reports by large proprietary companies.

The media release then provides more detail on ASIC's focus areas for its surveillance of 30 June 2026 financial reports, highlighting the most significant or common instances of past non-compliance with Australian Accounting Standards, as well as emerging areas posing significant challenges for financial statement preparers.

Directors, preparers, and auditors should collectively pay particular attention to these focus areas to improve financial reporting and audit quality. They should also ensure that they have robust position papers with appropriate analysis and conclusions to support complex and judgemental areas of accounting. These should refer to Australian Accounting Standards.

Five enduring focus areas

ASIC’s Sustainability reporting, financial reporting and audit and assurance focus areas, highlights the following five enduring focus areas that apply to all reporting periods that it will focus on when it conducts its reviews:

Asset values
Revenue recognition
Provisions
Subsequent events
Disclosures in the financial report and Operating and Financial Review (OFR).

Each of the above enduring focus areas is discussed in more detail below.

Additional items highlighted in the media release

ASIC also highlights the following financial reporting matters:

Registrable superannuation entities

The trustees of registrable superannuation entities (RSEs) are required to lodge their financial report, including a remuneration report, with ASIC within three months of the end of the financial year. RSEs will be included in ASIC’s financial reporting surveillance program.

You can find more information about the financial reporting obligations of registrable superannuation entities on ASIC’s registrable superannuation entity page. Our article, specifically contains guidance on remuneration reports.

Sustainability reporting and assurance engagements

From 31 December 2025, sustainability reporting under AASB S2 Climate-related Disclosures is mandatory for Group 1 entities required to prepare and lodge financial statements under Chapter 2M of the Corporations Act 2001.

ASIC is currently reviewing 31 December 2025 Group 1 sustainability reports as part of its 2025-2026 surveillance program and will continue reviewing sustainability reports as part of its 2026-2027 program. ASIC’s preliminary observations may assist preparers in improving the quality of their sustainability reporting.

ASIC will take a proportionate and pragmatic approach to supervision and enforcement as sustainability requirements are being phased in.

Need assistance?

Please contact our IFRS & Corporate Reporting team if you need support with any financial reporting matters for your 30 June 2025 financial reports.

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. Ensure the valuation method used to test impairment is appropriate, reasonable and supportable assumptions are used, and calculations should be cross-checked for reliability against other methods. Market capitalisation is generally not considered an appropriate method of determining fair value. However, it may be an appropriate indicator of impairment or used in a valuation cross-check. When performing a valuation cross-check, an entity may compare its ratio of market capitalisation to revenue to that of other entities if the other entities have closely comparable businesses, products, markets, cost structures, funding, etc. Estimation uncertainties must be disclosed, along with any changed key assumptions. A sensitivity analysis or information about probability-weighted scenarios must also be provided in sufficient detail for users to understand the judgements applied. Note: Our Impairment web page provides more information about the complexities of performing an impairment test.
Values of property assets	Factors that could adversely affect the values of commercial and residential properties should be considered, including: Changes in the office space needs of tenants Work from home Online shopping trends Future economic or industry impacts on tenants Financial condition of tenants. Complex lease accounting requirements, including impairment of lessees’ right-of-use assets. Note: Our Lease Accounting web page provides 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 reliable and 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. Receivables ageing must be accurate. Assumptions must be forward-looking, and the entity cannot simply assume that recent debts are collectible. 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. Companies in the financial services sector should have particular regard to the impact of current economic and market conditions and uncertainties on ECLs. Need to consider: Whether there has been a significant increase in credit risk for particular groups of lenders Adequacy of data, modelling, controls, and governance in determining ECLs Disclosing uncertainties and assumptions.
Financial asset classification	Financial assets must be appropriately classified and subsequently measured at: Amortised cost Fair value through other comprehensive income, or Fair value through profit or loss. A financial asset can only be measured at amortised cost if (IFRS 9.4.1.2): The assets are held in a business model whose objective is to hold financial assets in order to collect contractual cash flows, and The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Value of other assets	Value of inventories, including whether all estimated costs of completion and costs necessary to make the sale were considered when determining net realisable value. Whether it is probable that deferred tax assets will be realised. The value of investments in unlisted entities.

Consider	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’s business, assets and financial position and performance (i.e. not boilerplate). Consider changes from the previous period and disclose accordingly.
Disclosures in the financial report	Disclose uncertainties, changing key assumptions and sensitivities. 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 Operating and Financial Review (OFR)	The OFR should complement the financial report and tell the story of how economic and market conditions have impacted the business’s results and prospects. The overall picture should be clear, understandable, and supported by information that will enable investors to understand the significant factors affecting the entity, its businesses, and the value of its assets. Explain the underlying drivers of results, financial position, risks, management strategies, and future prospects. All significant factors should be included and given appropriate prominence. The most significant business risks at the whole-of-entity level that could affect the achievement of the disclosed financial performance or outcomes should be disclosed. Risks will vary from entity to entity. Providing an exhaustive list of generic risks that may affect many entities is not helpful; these risks should be described in context. For example, it could include a discussion about: Why the risk is important or significant Potential impact of the risk Where relevant, factors that are within management’s control. Listed entities must disclose sustainability-related financial information, including climate-related financial information, in the OFR if it is information that members would reasonably require to make an informed assessment of the entity’s operations, financial position, business strategies and prospects for future financial years (see section 299A of the Corporations Act 2001).
Non-IFRS financial information	A company should not present any non-IFRS measures in a misleading manner (refer to Regulatory Guide 230 for more information) in the OFR or within any market announcements.