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Blanket extension to reporting deadlines

Building on earlier relief announced for unlisted entities with 31 December 2019 to 31 March 2020 financial year ends, today’s announcement is welcome news – now providing blanket relief for the first time to both listed entities and entities with balance dates up to and including 7 July 2020 (the 7 July 2020 date accommodates entities that use a provision in the Corporations act enabling their financial year to be changed plus or minus 7 days each year).

Unlisted entities will now have one additional month to lodge financial reports for year ends from 31 December 2019 to 7 July 2020, while listed entities will be able to take one additional month to report for full year and half-year financial reports for 21 February 2020 to 7 July 2020 balance dates.

Importantly, listed entities will be required to inform the market when they rely on the extended period for lodgement. ASIC has also indicated there will be an expectation that entities explain the reasons for relying on the extension period, with an instrument extending the deadlines expected to be registered on the Federal Register of Legislation by 22 May 2020.

ASX listed entities required to lodge their preliminary final report (Appendix 4E) under ASX Listing Rules 4.3A and 4.3B by 31 August 2020 (for 30 June 2020 year ends) that do not have audited accounts by that date, will need to lodge unaudited accounts with their preliminary final report.

ASIC has also updated its FAQs on reporting and audit issues during COVID-19, in response to its announcement (see here for details).

Extension of ‘no action’ position for AGMs

Similarly, in earlier announced relief, ASIC adopted a ‘no action’ position for public companies with 31 December 2019 financial year ends that were required to hold their AGMs within five months – providing a two-month extension by which they can hold their AGM.

In today’s announcement, ASIC has extended its ‘no action’ position so that public companies with balance dates up to and including 7 July 2020 may also postpone their AGM by two months due to COVID-19.

Notably, for public companies with 1 June 2020 to 7 July 2020 year ends, the ‘no action’ position will also apply where holding an AGM in January or February 2021 results in the requirement to hold an AGM in the 2020 calendar year not being met.

ASIC’s decision also follows the Treasurer’s announcement last week to use his COVID-19 emergency powers to amend the Corporations Act to allow online annual general meetings for six months from 6 May. The extension of ASIC’s ‘no action’ position to provide a two-month extension will continue to assist entities that need additional time to prepare for holding an online meeting, particularly to ensure that shareholders are afforded a reasonable opportunity to participate in accordance with the Corporations Act requirements.

For reporting periods ending after 7 July 2020, ASIC will continue to monitor how market conditions and COVID-19 developments are affecting financial reporting and AGM obligations for balance dates.

More guidance to follow

The AICD has welcomed ASIC’s extension of the reporting relief and ‘no action’ position on AGMs. In particular, we have led calls to extend reporting deadlines, recognising the range of complex issues posed by COVID-19 means directors need additional breathing space to work through (see here for details).

We expect that the accounting and audit standard-setting bodies will release further guidance in mid to late May with regards to going concern assessments. In addition, the AICD is collaborating with Chartered Accountants Australia New Zealand and CPA Australia to provide additional support to directors and auditors on disclosure obligations during the pandemic, which we intend to publicly release by late June.

ASIC’s announcement can be found here.