The Corporations Amendment (Corporate Reporting Reform) Bill 2010 has been passed by Parliament
The key measures include:
- reducing the regulatory obligations of companies limited by guarantee, which typically have a not-for-profit purpose, by introducing a three-tiered differential reporting framework: Small companies limited by guarantee will be exempt from reporting and auditing requirements and other companies limited by guarantee will have streamlined assurance requirements and simplified disclosures in the directors’ report. In addition, the process for companies to distribute the annual report to their members will be streamlined;
- streamlining parent-entity reporting;
- providing greater flexibility for companies to pay dividends, by replacing the profits test with a solvency-type test; and
- allowing companies to more easily change their year-end date to minimise the burden on companies and their auditors during peak reporting periods.
The reforms will also implement refinements to the regulatory framework, including:
- improving disclosure of non-financial information in the directors’ report;
- refining the statement of compliance with International Financial Reporting Standards contained in the directors’ declaration; and
- clarifying the circumstances in which a company can cancel its share capital.
The main provisions of the Bill will come into effect for the financial year ending 30 June 2010, subject to Royal Assent. Associated Regulations are scheduled to be considered at an Executive Council meeting on 29 June 2010.
