Law Compliance Report - current edition - Report - Page 3
August 2024 Edition
Commonwealth Update
Treasury Laws Amendment (Making Multinationals Pay Their Fair
Share – Integrity and Transparency) Act 2024 (Cth)
On 9 April 2024, relevant provisions of the Treasury Laws Amendment (Making
Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024 (Cth) (the
Amending Act) amended the Corporations Act 2001 (Cth) (the Act).
The Amending Act has amended the Act to require Australian public companies to disclose information
about their subsidiaries in a consolidated entity disclosure statement as part of their annual financial
reporting obligations under the Act. This new change is discussed further below.
New requirement for Australian public
companies to provide consolidated entity
disclosure statement
By way of background, organisations that are
Australian public companies will be aware that
existing section 292(1)(b) of the Act requires that
public companies must prepare a financial report
each year. Section 295(2)(b) also states that that
public companies must prepare a financial
statement in relation to a consolidated entity if the
accounting standards require them to do so.
From 9 April 2024, newly introduced section
295(1)(ba) of the Act requires Australian public
companies (both listed and unlisted) to also disclose
information about their subsidiaries in a
consolidated entity disclosure statement as part of
their annual financial reporting obligations under
the Act.
A consolidated entity disclosure statement is a
statement that includes information about the
entities within that consolidated group as of the end
of the financial year, including such information as
the name of each entity, whether an entity is a trust,
partnership or body corporate, and whether the
entity was a trustee of a trust within the
consolidated entity, a partner in a partnership within
the consolidated entity, or a participant in a joint
venture within the consolidated entity etc. The full
list of required details to be included in a
consolidated entity disclosure statement is set out
in section 295(3A) of the Act.
It is important to note that if the accounting
standards do not require the public company to
prepare financial statements in relation to a
consolidated entity, the public company’s
consolidated entity disclosure statement must state
that fact.
In addition, we note that the director’s declaration
must also include a statement about whether, (in
the director’s opinion), the consolidated entity
disclosure statement is true and correct.
Finally, we note that the requirement to include a
consolidated entity disclosure statement applies to
public companies in relation to financial years
commencing on or after 1 July 2023.
Conclusion
If your organisation is an Australian public company,
your organisation’s relevant executive and/or
finance staff should be made aware of the new
requirement to disclose information about your
subsidiaries in a consolidated entity disclosure
statement, (in relation to financial years
commencing on or after 1 July 2023), as discussed
above and as set out in the NATIONAL - Financial
Reporting for Corporations topic.
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