ASIC Corporations (Repeal) Instrument 2025/440

Administered by Department of the Treasury

Legislation au F2025L01163 Not in force Legislative Instrument

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Explanatory Statement

 

ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 and ASIC Corporations (Repeal) Instrument 2025/440

This is the Explanatory Statement for ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 and ASIC Corporations (Repeal) Instrument 2025/440.

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

Summary

  1.              ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 (the Instrument) allows non-reporting entities to prepare their financial statements using the concessions and transitional provisions for recognition and measurement in accounting standards which apply to reporting entities.
  2.              ASIC Corporations (Repeal) Instrument 2025/440 (the Repeal Instrument) repeals five financial reporting-related legislative instruments: ASIC Corporations (Stapled Group Reports) Instrument 2015/838, ASIC Corporations (Related Scheme Reports) Instrument 2015/839, ASIC Corporations (Non-Reporting Entities) Instrument 2015/841, ASIC Corporations (Post Balance Date Reporting) Instrument 2015/842 and ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251.

Purpose of the instrument

  1.              Section 296(1) of the Corporations Act 2001 (Corporations Act) requires all entities that prepare financial reports under Chapter 2M to comply with accounting standards. Some accounting standards are stated to apply to all entities reporting under Chapter 2M and others are stated to apply only to entities reporting under Chapter 2M that are ‘reporting entities’.
  2.              Regulatory Guide 85 Reporting requirements for non-reporting entities (RG 85) outlines our view that non-reporting entities preparing financial reports under Chapter 2M must comply with the recognition and measurement requirements of accounting standards in order to meet a number of general obligations under the Corporations Act.
  3.              Non-reporting entities that apply only the recognition and measurement requirements of accounting standards and not the disclosure requirements may not be able to take advantage of certain concessions from those requirements that are available to reporting entities. These concessions include:
    1.        concessions available under Australian Accounting Standard AASB 1 First-time adoption of Australian accounting standards (AASB 1); and
    2.       transitional provisions or other concessions under a non-mandatory accounting standard.
  4.              For example, AASB 1 provides some concessions from reworking information to comply with the recognition and measurement requirements when an entity adopts the Australian accounting standards for the first time. These concessions would appear to be available only to entities that apply all of the requirements of the Australian accounting standards, including all disclosure requirements. As non-reporting entities may not be required to comply with all disclosure requirements, the concessions may not be available to them.
  5.              It would be inconsistent for non-reporting entities to not have the advantage of concessions available to reporting entities. This instrument ensures that non-reporting entities can take advantage of concessions or other modifications of the recognition and measurement standards of accounting standards that are available to reporting entities.
  6.              Relief for the application of accounting standards by non-reporting entities was previously provided by ASIC through ASIC Class Order [CO 05/639]. This was continued on substantially the same terms in ASIC Corporations (Non-Reporting Entities) Instrument 2015/841, which sunsets on 1 October 2025. 
  7.              The purpose of the Repeal Instrument is to repeal five financial reporting-related legislative instruments that are due to sunset 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 of the Instrument 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.          Section 6 of the Instrument provides that a company or registered scheme that is not a reporting entity is allowed to comply with the recognition and measurement requirements of accounting standards as if it is a reporting entity provided it takes all reasonable steps to ensure that the financial report complies with all recognition and measurement requirements that apply to a reporting entity. That is, the company or registered scheme can take advantage of concessions and transitional provisions in accounting standards that are otherwise only available to reporting entities.
  3.          Schedule 1 of the Repeal Instrument repeals the five financial reporting-related instruments.

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 2001.
  2.          The Repeal Instrument is made under sections 250PAA, 341, 341A, 601QA, 992B and 1217 of the Corporations Act 2001.
  3.          The Instrument and the Repeal Instrument are disallowable legislative instruments.

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 (Non-Reporting Entities) Instrument 2025/436 and ASIC Corporations (Repeal) Instrument 2025/440

Overview

1. ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 (the Instrument) allows non-reporting entities to prepare their financial statements using the concessions and transitional provisions for recognition and measurement in accounting standards which apply to reporting entities.

2. ASIC Corporations (Repeal) Instrument 2025/440 (the Repeal Instrument) repeals five financial reporting-related legislative instruments that are scheduled to sunset on 1 October 2025: ASIC Corporations (Stapled Group Reports) Instrument 2015/838, ASIC Corporations (Related Scheme Reports) Instrument 2015/839, ASIC Corporations (Non-Reporting Entities) Instrument 2015/841, ASIC Corporations (Post Balance Date Reporting) Instrument 2015/842 and ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251.

Assessment of human rights implications

3. The Instrument and the Repeal Instrument do not engage any of the applicable rights or freedoms.  

Conclusion

4. The Instrument and the Repeal Instrument are 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 (Non-Reporting Entities) Instrument 2025/436 and ASIC Corporations (Repeal) Instrument 2025/440 were introduced to address inconsistencies in financial reporting requirements between reporting entities and non-reporting entities under the Corporations Act 2001. These instruments were developed by the Australian Securities and Investments Commission (ASIC) to provide clarity and uniformity in the application of accounting standards. The primary objective of the ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 is to allow non-reporting entities to prepare their financial statements using the same concessions and transitional provisions available to reporting entities, thereby ensuring a level playing field. The ASIC Corporations (Repeal) Instrument 2025/440 serves to repeal outdated financial reporting-related instruments, streamlining regulations and reducing complexity. Both instruments aim to enhance the efficiency and effectiveness of financial reporting processes while ensuring compliance with legislative intent.

Scope and Application

The ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 applies to non-reporting entities, which are companies or registered schemes that are not classified as reporting entities under the Corporations Act 2001. These entities are permitted to prepare their financial statements by applying the recognition and measurement requirements of accounting standards as if they were reporting entities, thus allowing them to benefit from the concessions and transitional provisions that are available to reporting entities. The Instrument ensures that non-reporting entities do not miss out on certain advantages provided by accounting standards, aligning their treatment more closely with that of larger, reporting entities. Geographically, the Instrument applies across Australia, as it is a legislative instrument made under the Corporations Act, which has national jurisdiction. The ASIC Corporations (Repeal) Instrument 2025/440, on the other hand, serves to repeal five existing financial reporting-related legislative instruments that are set to expire on 1 October 2025. These repealed instruments include ASIC Corporations (Stapled Group Reports) Instrument 2015/838, ASIC Corporations (Related Scheme Reports) Instrument 2015/839, ASIC Corporations (Non-Reporting Entities) Instrument 2015/841, ASIC Corporations (Post Balance Date Reporting) Instrument 2015/842 and ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251. Both instruments extend their application through subordinate legislation, facilitating the administration of financial reporting requirements under the Corporations Act.

Key Provisions

The ASIC Corporations (Non-Reporting Entities) Instrument 2025/436 (the Instrument) enables non-reporting entities to prepare their financial statements by applying the same recognition and measurement concessions and transitional provisions that are available to reporting entities under accounting standards (Section 6). This means that non-reporting entities can benefit from certain accounting standard concessions that were previously only available to reporting entities, provided they adhere to all recognition and measurement requirements applicable to reporting entities. The ASIC Corporations (Repeal) Instrument 2025/440 (the Repeal Instrument) repeals five financial reporting-related legislative instruments: ASIC Corporations (Stapled Group Reports) Instrument 2015/838, ASIC Corporations (Related Scheme Reports) Instrument 2015/839, ASIC Corporations (Non-Reporting Entities) Instrument 2015/841, ASIC Corporations (Post Balance Date Reporting) Instrument 2015/842, and ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251 (Schedule 1). These repealed instruments are scheduled to sunset on 1 October 2025. The Instrument imposes several obligations on non-reporting entities. These entities must ensure that their financial statements comply with all recognition and measurement requirements of accounting standards as if they were reporting entities (Section 6). This includes taking all reasonable steps to ensure that the financial report adheres to these standards, thus allowing them to leverage the same concessions available to reporting entities. The obligations are designed to maintain consistency and fairness in financial reporting practices across different types of entities, ensuring that non-reporting entities do not miss out on beneficial accounting concessions that are accessible to larger, more complex reporting entities. There are no specific offences, penalties, or civil/criminal consequences outlined in the Instrument for non-compliance with its provisions. However, non-reporting entities that fail to comply with the recognition and measurement requirements of accounting standards may face consequences under the broader Corporations Act 2001, which governs corporate financial reporting in Australia. The Act provides for a range of penalties for non-compliance with financial reporting obligations, including fines and imprisonment for directors who are found to be in breach of their duties under the Act. The specific penalties for non-compliance can vary depending on the nature and severity of the breach, but they can include substantial fines and potential imprisonment terms. In summary, the Instrument aims to ensure that non-reporting entities can benefit from certain accounting concessions that are available to reporting entities, provided they comply with all applicable recognition and measurement requirements. The Repeal Instrument ensures that outdated legislative instruments are repealed, streamlining the regulatory framework and reducing complexity for entities subject to financial reporting obligations.

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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.