We have had some queries in relation to the necessity to maintain certain disclosures related to parent entity information where the separate financial statements of the parent entity have not been included in a group’s financial report pursuant to the reforms introduced by the recent amendments to the Corporations Act.

(a) Related Party transactions between group entities

As stated at AASB 124.4, related party transactions and outstanding balances with other entities in a group are disclosed in an entity’s financial statements. However, intercompany transactions will be eliminated and will not be disclosed in the consolidated financial statements unless there are noncontrolling interests in existence. The following are disclosures that should be included in the presentations of the consolidated financial statements:-
  • Relationships between parent and subsidiaries despite the absence of transactions (see para 12)
  • Information about transactions and outstanding balances between parent and subsidiaries, or between subsidiaries within the group to the extent that they effect the financial statements (see para 17). Disclosures include amounts of transactions, terms and conditions, guarantees provided or received, debt provisioning and write offs.

For disclosing entities, additional disclosure is required of assets and liabilities recognised at the end of the reporting period in relation to transactions between parent and subsidiaries. Again, these will only be recognized where not fully eliminated on consolidation due to the existence of non-controlling interests.

(b) Audit fee disclosures relating to parent entity

This query relates to the applicability of AASB 101.Aus138.1 which requires that the entity, other than a group, disclose amounts paid or payable to the auditor of the entity for an audit or a review of the financial statements or for non audit services.

This issue was considered at a recent board meeting of the AASB where it was concluded that on the basis that the group accounts represent those of the consolidated entity as opposed to the parent entity, the disclosure of parent entity audit fees is not required. The AASB noted also that this would be among the issues to be clarified in AASB ED 200B Proposed Separate Disclosure Standards.



Contact

Rob Mackay
T +61 3 8635 1800
rmackay@moorestephens.com.au

www.moorestephens.com.au