Australia: Update: government approves changes to financial reporting burden

In brief - Increase to thresholds for determining what constitutes a large proprietary company under the Corporations Act 2001 will apply from 1 July 2019

The Government has approved changes to increase the thresholds for what constitutes a large proprietary company. The changes reduce the financial reporting burden for some proprietary companies which will help reduce costs for smaller proprietary companies.

We reported on the proposed changes in our November 2018 article Government proposes changes for financial reporting.

The new threshold test - what constitutes a large proprietary company?

Thresholds have doubled and from 1 July 2019 will be as follows:

• consolidated revenue for the financial year of the company and the entities it controls increases from $25 million to $50 million
• value of the consolidated gross assets at the end of the financial year of the company and the entities in controls increases from $12.5 million to $25 million or more, or
• number of employees the company and the entities it controls has at the end of the financial year increases from 50 employees to 100 employees or more

The changes for large proprietary company thresholds are also relevant to the recent changes under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 which was passed through Parliament in February 2019. We recently reported on the whistleblower law changes in our article Employers: get ready for new whistleblower protection laws in 2019.

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