Financial reports

What's new in financial reporting

In accordance with s286 of the Corporations Act 2001 (Corporations Act), a company, registered scheme or disclosing entity must keep written financial records that:

correctly record and explain its transactions and financial position and performance, and
would enable true and fair financial statements to be prepared and audited.

What is a financial report?

The financial report for a financial year consists of:

(a) the financial statements for the year, which generally consist of:

(i) a statement of financial position (balance sheet)

(ii) a statement of comprehensive income (profit and loss)

(iii) a statement of cash flows, and

(iv) a statement of changes in equity

(b) the notes to the financial statements, and

the directors' declaration about the statements and notes.

Who has to prepare a financial report?

Section 292 of the Corporations Act 2001 requires the following entities to prepare a financial report and a directors' report for each financial year:

public companies (except small companies limited by guarantee, unless they have been directed by ASIC or by their members to prepare financial reports)
disclosing entities
large proprietary companies
managed investment schemes
small proprietary companies that are foreign-controlled
small proprietary companies that have been directed by ASIC
small proprietary companies that have been directed by members.

Are there any exemptions from having to lodge financial report?

In limited circumstances, some companies are exempt from the requirement to lodge financial reports. For example:

if the entity is listed on the Australian Stock Exchange (ASX), and the entity has lodged their financial reports with the ASX
if the entity has been granted individual relief by ASIC under s340, from the requirement to lodge a financial report
if the entity can claim relief under a class order issued by ASIC, or
small proprietary companies or small companies limited by guarantee that prepare a report at the request of ASIC under s294 or s294B, or their members under s293 or s294A.

Don’t assume that you would qualify for any exemption. Generally, it is the minority of cases that qualify for some form of relief.

In most cases, relief is not granted for financial reports that were due in the past.

I know I have to lodge reports—how do I go about it?

What documents must I lodge?

Form 388 Copy of financial statements and reports should always be completed and lodged together with the documents listed in the table below.

Document	Sections of the Corporations Act
Statement of financial position as at the end of the year	295(2) & 296(1)
Statement of comprehensive income (which may include a separate income statement) as at the end of the year	295(2) & 296(1)
Statement of cash flows for the year	295(2) & 296(1)
Statement of changes in equity for the year	295(2) & 296(1)
Notes to financial statements (disclosure required by the regulations, notes required by the accounting standards, and any other information necessary to give a true and fair view)	295(3)
Directors’ declaration (that the financial statements comply with the accounting standards, give a true and fair view, there are reasonable grounds to believe the company/scheme/entity will be able to pay its debts, and the financial statements have been made in accordance with the Corporations Act)	295(4)
Directors’ report, including the auditor’s independence declaration	298–300BA
Auditor’s report	301 & 308

When must I lodge?

Section 319 of the Corporations Act requires a disclosing entity or registered scheme to lodge their financial report within three months after the end of the financial year. All other companies must lodge their financial reports within four months after the end of the financial year.

If the company has not made a profit or traded during the financial year, financial reports are still required even if it is necessary to show figures as ‘zero’ or 'nil'.

Where a company, registered scheme or disclosing entity has been given a direction by ASIC under s321 of the Act to lodge a copy of reports, the direction will specify the period for lodgement.

How can I lodge financial reports?

As noted above you lodge your financial reports with a copy of Form 388 Copy of financial statements and reports.

You can lodge online either through:

The ASIC website (www.asic.gov.au) and the company officeholder, registered agent and auditor portals once you have registered for access. See www.asic.gov.au/onlinelodgement for more information; or
Standard Business Reporting (SBR) enabled accounting software. For generic information about SBR refer to www.sbr.gov.au; for information specific to SBR lodgement with ASIC, refer to www.asic.gov.au/sbr

Otherwise you can lodge the reports on paper using Form 388 Copy of financial statements and reports. You can download this form from www.asic.gov.au/forms.

Where can I get more information?

Other information sheets that you may find useful include:

Your company and the law (INFO 79)
What books and records should my company keep? (INFO 76)
Checklist for registered companies and their officers (INFO 20)
Companies limited by guarantee—simplified obligations (INFO 131)

For more information contact ASIC on 1300 300 630.

Important notice

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice.

You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.

This is Information Sheet 31 (INFO 31). Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.

ASIC Website: Printed 09/09/2010

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