ASX 100 response to ASIC's disclosing non-IFRS information guide

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Monday 2 July - An EY report has found that ASX 100 companies have made significant changes to their December 2011 financial reports in response to the Australian Securities and Investments Commission’s (ASIC) regulatory guidance about non-IFRS information. However, there is diversity in how the Guide has been implemented.

ASIC’s Regulatory Guide 230: disclosing non-IFRS information (the Guide) was issued last year with the intention of promoting more meaningful communication of non-IFRS financial information to investors and other users of financial reports, assisting directors in ensuring that the information is not misleading and providing greater certainty in the market about ASIC's views on disclosure of the information.

EY’s National IFRS Leader, Lynda Tomkins says 92% of ASX 100 companies continue to use non-IFRS information to discuss performance in documents other than their financial statements.

“As expected, all companies that disclosed non-IFRS information included reconciliation to statutory profit, although there were varying levels of detail included in the reconciliations. There was also diversity in where the reconciliation was included, with only 36% of companies including it in all documents.”

Seventy-eight percent, up from 34% in the December 2010 reporting period, of companies explicitly stated why non-IFRS information was used.

“We believe companies that didn’t include a specific statement felt that it was explained within the reconciliation and was therefore ‘self-explanatory’. However shareholders would be more informed if an explicit statement was made,” Ms Tomkins said.

Ms Tomkins said the first application of the Guide has lead to a change in practice of ASX 100 companies however further changes are likely to be needed to fully implement the Guide.

“The June reporting season will give companies the opportunity to further refine their reporting in line with the Guide,” Ms Tomkins said.

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