ASIC Corporations (Non-Reporting Entities) Instrument 2015/841
About this compilation
Compilation No. 1
This is a compilation of ASIC Corporations (Non-Reporting Entities) Instrument 2015/841 as in force on 29 October 2021. It includes any commenced amendment affecting the legislative instrument to that date.
This compilation was prepared by the Australian Securities and Investments Commission.
The notes at the end of this compilation (the endnotes) include information
about amending instruments and the amendment history of each amended provision.
Contents
Part 1—Preliminary
1 Name of legislative instrument
3 Authority
4 Definitions
Part 2—Order
5 Relief for entities that are not reporting entities
Endnotes
Endnote 1—Instrument history
Endnote 2—Amendment history
Part 1—Preliminary
1 Name of legislative instrument
This instrument is ASIC Corporations (Non-Reporting Entities) Instrument 2015/841.
3 Authority
This instrument is made under subsection 341(1) of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
measurement requirement means a requirement in an accounting standard that is relevant to working out the cost or other value to be attributed to an asset, liability, revenue, expense or other item that is covered by a recognition requirement.
recognition requirement means a requirement in an accounting standard that an asset, liability, revenue, expense or other item is to be expressly reported on, or incorporated in amounts expressly reported on, in a financial statement to which the standard relates.
reporting entity has the same meaning as in Accounting Standard AASB 1057 Application of Australian Accounting Standards.
Part 2—Order
5 Relief for entities that are not reporting entities
Relief
(1) A company (the non‑reporting entity) or registered scheme (the non‑reporting entity) that is not a reporting entity does not have to comply with subsection 292(1), subsection 296(1) and section 297 of the Act in relation to a financial report (the relevant report) for a financial year to the extent that those provisions require the relevant report to comply with a recognition requirement or a measurement requirement that would not have applied to a reporting entity.
Where relief applies
(2) The relief in subsection (1) is available where the non-reporting entity takes all reasonable steps to ensure that the relevant report complies with all recognition requirements and all measurement requirements as if it were a reporting entity.
Endnotes
Endnote 1—Instrument history
Instrument number | Date of FRL registration | Date of commencement | Application, saving or transitional provisions |
2015/841 | 30/9/2015 (see F2015L01546) | 1/10/2015 | |
2021/868 | 28/10/2021 (see F2021L01472) | 29/10/2021 | - |
Endnote 2—Amendment history
ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Section 1 | am. 2021/868 |
Section 2 | rep. s48D LA |
Section 4 | am. 2021/868 |
Overview
The ASIC Corporations (Non-Reporting Entities) Instrument 2015/841 was enacted in 2015 under subsection 341(1) of the Corporations Act 2001, aiming to provide relief to entities that are not classified as reporting entities. This legislative instrument was introduced to address the gap in requirements for non-reporting entities, ensuring they are not unduly burdened by compliance obligations that are primarily relevant to larger entities. The policy objective is to balance the need for financial transparency with the practicalities of managing smaller entities, allowing them to avoid compliance with recognition and measurement requirements that do not apply to reporting entities, provided they take reasonable steps to ensure their financial reports remain compliant with other relevant requirements.
The instrument was prepared by the Australian Securities and Investments Commission (ASIC) and was designed to exempt non-reporting entities from specific compliance obligations under the Corporations Act 2001. This includes relief from adhering to certain recognition and measurement requirements in financial reports, facilitating more streamlined reporting processes for these entities while maintaining a level of financial integrity and transparency. The relief applies where the non-reporting entity ensures that their financial reports meet all other recognition and measurement requirements as if they were a reporting entity, thereby maintaining a standard of financial disclosure that is proportionate to the entity's size and complexity.
Scope and Application
ASIC Corporations (Non-Reporting Entities) Instrument 2015/841 is a legislative instrument made under subsection 341(1) of the Corporations Act 2001, which provides relief to entities that are not reporting entities. Specifically, the instrument exempts non-reporting entities from certain accounting standards that would otherwise apply to reporting entities, provided that the non-reporting entity takes reasonable steps to ensure that its financial reports comply with all recognition and measurement requirements as if it were a reporting entity. The instrument applies to companies and registered schemes that are not reporting entities and provides relief in relation to financial reports for financial years commencing from 1 October 2015. The instrument's application, saving, and transitional provisions are set out in the instrument history. The instrument has been amended by ASIC Corporations (Non-Reporting Entities) Amendment Instrument 2021/868, which made changes to the instrument's definitions and application, saving, and transitional provisions.
Key Provisions
The ASIC Corporations (Non-Reporting Entities) Instrument 2015/841 primarily focuses on providing relief to non-reporting entities from certain financial reporting requirements under the Corporations Act 2001. According to section 5(1), non-reporting entities, which are companies or registered schemes, are exempt from complying with subsections 292(1) and 296(1), as well as section 297, to the extent these provisions require compliance with recognition or measurement requirements that would not apply to a reporting entity. This relief is conditional on the non-reporting entity taking all reasonable steps to ensure the financial report complies with all recognition and measurement requirements as if it were a reporting entity. The relief is clearly defined and targeted to ensure that non-reporting entities are not unduly burdened with requirements that are not pertinent to their operations.
Entities governed by the Act must ensure that their financial reports adhere to the stipulated requirements, despite the relief provided. This means that while non-reporting entities are exempt from certain compliance obligations, they must still strive to meet the broader standards of financial reporting to the extent possible. The requirement to take all reasonable steps to ensure compliance with recognition and measurement requirements ensures that financial reports remain transparent and reasonably accurate, maintaining a level of comparability with reporting entities.
Failure to comply with the requirements set out in this instrument can lead to significant consequences. Although specific offences, penalties, or consequences are not detailed within the instrument itself, the broader Corporations Act 2001 provides a framework for penalties. Breaches of the Act can result in both civil and criminal penalties, depending on the nature and severity of the offence. For instance, individuals and entities found guilty of misleading or deceptive conduct can face substantial fines, imprisonment, or both. The exact penalties are determined by the courts based on the circumstances of the case, but they can be significant, reflecting the importance of compliance with corporate and financial reporting laws.