Proposed changes to financial reporting thresholds

On 16 November, an exposure draft of the Corporations Amendment (Proprietary Company Thresholds) Regulations 2018 was released proposing to increase the thresholds that determine a large proprietary company under section 45A of the Corporations Act 2001 (Cth).
Under the current regulations and section 45A, a company will be a large proprietary company if it meets two of the following criteria:
• $25 million or more in consolidated revenue;
• $12.5 million in gross assets; or
• 50 or more full-time equivalent employees.
Simply, the proposed regulation doubles the existing thresholds, meaning a company will only be a large proprietary company if it meets two or more of the following criteria:
• $50 million or more in consolidated revenue;
• $25 million in gross assets; or
• 100 or more full-time equivalent employees.
The obvious benefit of the proposed changes is that the significant costs involved in satisfying the reporting requirements of the Corporations Act, namely the preparation of general purpose financial statements, will no longer be imposed upon companies affected by the changes.
Significantly, the Federal Treasurer estimated the annual cost of preparing audited financial statements to be approximately $36,950 per company, with the proposed changes reportedly relieving $81.3 million in administrative costs annually.
If you believe the changes will affect you, please contact Roberts & Morrow to discuss the changes further.

Recent Articles

Act before 7 September 2020 to qualify for super guarantee amnesty

11th August 2020

The Government's Super Guarantee amnesty legislation, the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 received Royal Asset on... Read More

Significant changes made to the JobKeeper 2.0 package

10th August 2020

JobKeeper 2.0 turnover tweak and change for the start date for employees, with those hired as of 1 July... Read More

JobTrainer skills package explained

04th August 2020

On 16 July, 2020 the Morrison Government announced a $2 billion dollar package to invest in the access and... Read More

An important notice for MYOB clients using AccountRight

04th August 2020

On 21 August, AccountRight 2020.1 will be decommissioned. Please ensure you have updated to the latest version of AccountRight (2020.2),... Read More