ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437

Administered by Department of the Treasury

Legislation au F2025L01160 In force Legislative Instrument

Legislation content

 

 

Explanatory Statement

 

ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437

This is the Explanatory Statement for ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437.

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

  1.              ASIC Corporations (Non-Reporting Entities) Instrument 2025/437 (the Instrument) allows entities to disclose a balance sheet showing the financial effect of significant acquisitions or disposals after the balance date in the notes to the financial statements.

Purpose of the instrument

  1.              Subsections 295(2) and 303(2) of the Corporations Act 2001 (Corporations Act) require financial reports to be prepared in accordance with accounting standards.
  2.              The accounting standards prevent an entity from disclosing the financial effect of a material acquisition or disposal of entities or businesses that occurs after the end of a reporting period in the notes to their financial statements in the form of a pro forma balance sheet.
  3.              The Instrument allows pro forma balance sheet to be included in the notes to the financial statements to explain the financial effect of material acquisitions and disposals of entities and businesses after the end of a reporting period. Such a presentation may be the most meaningful way to explain the effect of the transaction.
  4.              Disclosing entities could provide similar information in separate announcements to the market; however, we consider that stakeholders are better served if the information is disclosed and read in the context of the entity’s financial report.
  5.              Relief to allow post balance date reporting was previously provided by ASIC through ASIC Class Order [CO 05/644]. This relief was continued on substantially the same terms in ASIC Corporations (Post Balance Date Reporting) Instrument 2015/842, which sunsets on 1 October 2025. 

Consultation

  1.              ASIC consulted publicly on our proposal to remake the relief through CS 24 Proposed remake of financial reporting-related legislative instruments. We received one submission which supported remaking the instrument.

Operation of the instrument

  1.              Section 4 provides a simplified outline for the instrument. Its purpose is to assist readers in understanding the substantive provisions. However, the outline is not intended to be comprehensive, and readers should rely on the substantive provisions when considering the instrument’s effect. 
  2.              Subsection 6(1) of the instrument allows a company, registered scheme, registrable superannuation entity or disclosing entity, or a retail CCIV in relation to a sub-fund, to include a balance sheet in a note to the financial statements, explaining the financial effect of acquisitions or disposals which occur after the reporting date.
  3.          Subsection 6(2) provides that the relief is available where the transactions have a material impact on the entity or sub-fund or, if consolidated financial statements are included in the financial report, the transactions have a material effect on the consolidated entity.
  4.          A single entity or consolidated balance sheet must be included in the notes to the financial statements that is either:
    1.        an actual balance sheet drawn up to a point in time after the transactions have occurred, or
    2.       a pro forma balance sheet drawn up on the basis of the entity’s or sub-fund’s (or consolidated entity’s, as the case may be) actual balance sheet drawn up at the end of the reporting period or a later date.
  5.          If a pro forma balance sheet is included in a note to the financial statements,
    1.        it must be prepared on a basis consistent with the accounting standards
    2.       the basis of preparation and key underlying assumptions must be disclosed, and
    3.        any other material transactions or events after balance date must be reflected in the note to ensure the pro forma balance sheet is not misleading.

Legislative instrument and primary legislation 

  1.          The subject matter and policy implemented by the Instrument is more appropriate for a legislative instrument than primary legislation because it provides relief where strict compliance with the primary legislation produces anomalous outcomes that would be inconsistent with the intent of the primary law.
  2.          If the matters in the Instrument were to be inserted into the primary legislation, they would insert, into an already complex statutory framework, a set of specific provisions that would apply only to a relatively small group of entities. This would result in additional cost and unnecessary complexity for other users of the primary legislation.
  3.          It will be a matter for the Government and for Parliament to consider whether the primary legislation may need to be amended in the future to include the substance of the relief in the Instrument in legislation.

Duration of the instrument

  1.          The duration of the Instrument is 5 years.

Legislative authority

  1.          The Instrument is made under subsection 341(1) of the Corporations Act.
  2.          The Instrument is a disallowable legislative instrument.

Statement of Compatibility with Human Rights 

  1.          The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

Attachment

Statement of Compatibility with Human Rights

 

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437

Overview

1. ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437 allows entities to disclose a balance sheet showing the financial effect of significant acquisitions or disposals after the balance date in the notes to the financial statements.

Assessment of human rights implications

2. This instrument does not engage any of the applicable rights or freedoms.  

Conclusion

3. This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview

The ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437, enacted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001, aims to address the limitation of existing accounting standards that prevent entities from disclosing the financial effects of material acquisitions or disposals occurring after the balance date in their financial statements. The Instrument provides relief by allowing entities to include a balance sheet, either actual or pro forma, in the notes to their financial statements to explain such post-balance-date transactions. This approach is intended to offer stakeholders a more meaningful understanding of the financial implications of significant transactions that occur after the reporting period. The Instrument was developed in response to public consultation and is designed to operate for a duration of five years. Its policy objective is to enhance financial reporting transparency without unnecessarily complicating the primary legislation for broader applicability.

Scope and Application

The ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437 is a legislative instrument designed to provide relief to certain entities regarding the disclosure of financial effects of significant acquisitions or disposals occurring after the balance date. It applies to companies, registered schemes, registrable superannuation entities, disclosing entities, and retail CCIVs in relation to sub-funds. This instrument permits the inclusion of a balance sheet in the notes to financial statements, either as an actual balance sheet reflecting a point in time after the transactions or as a pro forma balance sheet based on the entity’s actual balance sheet at the end of the reporting period. The relief is contingent upon the transactions having a material impact on the entity or sub-fund, or on the consolidated entity if consolidated financial statements are included. This legislative instrument is geographically applicable within Australia, operating under the framework of the Corporations Act 2001 and is made under subsection 341(1) of the Act, providing a clear, focused exception to the strict adherence to accounting standards that otherwise prevent such disclosures.

Key Provisions

The ASIC Corporations (Post Balance Date Reporting) Instrument 2025/437 (the Instrument) allows entities to include a balance sheet in the notes to their financial statements, which explains the financial effect of significant acquisitions or disposals that occur after the end of the reporting period (subsection 6(1)). This relief is available for transactions that have a material impact on the entity or, if consolidated financial statements are included in the financial report, the consolidated entity (subsection 6(2)). The balance sheet must either be an actual balance sheet drawn up at a point in time after the transactions have occurred, or a pro forma balance sheet prepared based on the entity's actual balance sheet at the end of the reporting period or a later date (subsection 6(3)). If a pro forma balance sheet is used, it must be prepared consistently with the accounting standards, and the basis of preparation and key underlying assumptions must be disclosed. Any other material transactions or events after the balance date must also be reflected to prevent misleading information (subsection 6(4)). Entities governed by this Instrument are required to disclose the financial effect of material acquisitions or disposals that occur after the balance date in the notes to their financial statements. They must ensure that the balance sheet is either an actual balance sheet showing the financial effect post-transaction or a pro forma balance sheet prepared in accordance with the accounting standards and based on the entity's balance sheet at the end of the reporting period or later. The disclosure must include the basis of preparation and key assumptions and reflect any other material events to avoid misleading information. There are no specific offences, penalties, or civil/criminal consequences outlined in the Instrument for non-compliance. However, it is important to note that the Instrument is made under subsection 341(1) of the Corporations Act and is a disallowable legislative instrument. This means that the Instrument can be reviewed and potentially disallowed by Parliament, and non-compliance with its provisions could lead to regulatory scrutiny or action under the Corporations Act. Additionally, if the Instrument is found to be inconsistent with the Corporations Act or other primary legislation, it could result in legal challenges or other consequences as determined by the relevant courts or tribunals.

Legal classification tags

Area of Law
Commercial Law
Corporate Law & Governance
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Compliance Obligations
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.