New wholly-owned subsidiary reporting relief

On 29 September 2026, the Australian Securities and Investments Commission (ASIC) published

ASIC Corporations (Wholly-owned Companies) Instrument 2026/533, a remake of its previous legislative instrument 2016/785, which sunsetted on 1 October 2026.

Instrument 2026/533 provides financial reporting relief to wholly-owned entities in a reporting group when certain conditions are met.

Effective date

The new Instrument applies to financial years ending on or after 1 January 2027.

The previous instrument 2016/785 continues to apply to financial years ending before 1 January 2027 (so will continue to apply for 31 December 2026 year-ends).

What’s changed?

The new Instrument largely retains the existing relief available to wholly-owned entities under a deed of cross guarantee. The fundamental relief framework is unchanged, with ASIC primarily using the rewrite to modernise and simplify the requirements.

The most significant changes include:

• The supplementary ‘additional consolidation information’ required for deed of cross guarantee disclosures must be prepared using the presentation and disclosure requirements in AASB 18 Presentation and Disclosure in Financial Statements rather than the corresponding requirements in AASB 101 Presentation of Financial Statements.
   

  This change may have practical consequences for entities with year-ends on or after 1 January 2027 that are still applying AASB 101, or early adopters of AASB 18 with year-ends before 1 January 2027.

• The relief conditions have been simplified by removing the distinction between reporting entities, non-reporting entities and exempt entities, given that the holding entity (parent) must prepare general purpose financial statements, including consolidated financial statements.
• Removal of a number of outdated provisions, such as temporary COVID-19 extensions. The Instrument now reverts to the standard four-month lodgement deadline.

What stays the same?

The instrument exempts certain wholly-owned entities in a corporate group from having to prepare, have audited, and lodge financial reports with ASIC where:

• The wholly-owned companies are party to a deed of cross guarantee with the holding entity and certain other wholly-owned entities (collectively referred to as the ‘closed group’), and
• The holding entity has prepared consolidated financial statements covering the closed group, and any other bodies controlled by the holding entity that are party to the deed of cross guarantee
• The relevant financial year of the company relying on the relief and the holding entity must end on the same date:

Wholly-owned entities must also meet all the other conditions in section 8, which essentially remain the same as LI 2016/785.

Can the holding entity be a foreign entity?

Yes. Section 8(s) outlines the reporting requirements where the holding entity is a foreign entity. The consolidated financial statements required will depend on whether the holding entity is controlled by an Australian entity, or whether the law in the place of origin of the foreign entity requires consolidated financial statements. In the former case, Chapter 2M consolidated financial statements are required (including a directors’ declaration), and in the latter case, consolidated financial statements must be prepared in accordance with the law in the place of origin. If neither of these two situations applies the foreign holding entity must prepare consolidated financial statements under Chapter 2M as if the foreign holding entity were an Australian public company.

Need assistance?

Please contact our IFRS & Corporate Reporting team if you would like further information, or if you require assistance with any financial reporting matters.