Financial Reporting Changes
For some time it’s been a requirement that a ‘large’ proprietary company lodge audited financial reports with ASIC each year. Under the current definition, a large company must meet at least two of the following three thresholds:
- $25 million or more in consolidated revenue;
- $12.5 million or more in consolidated gross assets; or
- 50 or more employees.
These thresholds have not been reviewed since 2007 and the Treasury’s current view is that they need to be increased in order to “appropriately capture the level at which a company becomes economically significant”.
As a result, it is intended to double the current thresholds to:
- $50 million or more in consolidated revenue;
- $25 million or more in consolidated gross assets; or
- 100 or more employees.
The Treasury has calculated that doubling the thresholds will result in around 2,200 proprietary companies no longer being classified as ‘large’ and therefore no longer being required to comply with financial reporting obligations.
Reduced access for third parties (such as trade credit suppliers) to formally lodged financial statements will only increase their need for credit reporting and monitoring facilities as provided by NCI.