Preparing for ASIC's 2026–27 Financial Reporting Priorities

1. Impairment and Valuation of Non-Financial Assets

ASIC will continue to focus on impairment testing for goodwill, indefinite-life intangible assets and assets not yet available for use.

Key areas of review include:

• Annual impairment testing of goodwill and indefinite-life intangible assets. 
• The reasonableness of valuation methodologies and key assumptions. 
• Clear disclosure of estimation uncertainties, changes in assumptions and sensitivity analyses. 
• Cross-checking valuations using alternative methodologies where appropriate. 
• Property valuations that appropriately reflect current market conditions, including hybrid working trends, online retail impacts and tenant financial health. 

Businesses should ensure valuation methodologies remain appropriate, assumptions are well supported, and documentation clearly demonstrates how significant judgements have been reached.

2. Expected Credit Losses (ECL)

ASIC expects organisations to support Expected Credit Loss (ECL) calculations with robust, evidence-based assumptions and current information.

Areas of focus include:

• Reliable borrower and debtor information. 
• Forward-looking assumptions rather than reliance on historical collection trends. 
• Appropriate modelling methodologies. 
• Strong governance and internal controls. 
• Transparent disclosures explaining assumptions, uncertainties and probability-weighted scenarios. 

Organisations should regularly review ECL methodologies to ensure they reflect current economic conditions and remain supported by high-quality data.

3. Revenue Recognition

Revenue recognition continues to be an area involving significant judgement.

ASIC will review whether:

• Revenue reflects the commercial substance of transactions and performance obligations. 
• Judgements and assumptions supporting revenue recognition are appropriate. 
• Revenue accounting policies are tailored to the entity rather than relying on generic disclosures. 

Businesses should review complex revenue arrangements to ensure they remain compliant with Australian Accounting Standards and accurately reflect contractual obligations.

4. Disclosures of Risks and Uncertainties

ASIC expects organisations to provide meaningful, entity-specific disclosures that clearly explain risks affecting financial performance and future prospects.

This includes:

• Key assumptions and estimation uncertainty. 
• Sensitivity analyses. 
• Business-specific risks. 
• The impact of economic and market conditions discussed within the Operating and Financial Review (OFR). 

Generic or boilerplate disclosures are unlikely to satisfy regulatory expectations.

5. Sustainability Reporting

FY2026–27 marks the first full reporting cycle for mandatory climate-related financial reporting for Group 1 entities.

ASIC has confirmed it will actively review:

• Sustainability reports lodged under the Corporations Act. 
• Climate-related financial information prepared under AASB S2. 
• Assurance methodologies supporting sustainability disclosures. 

As reporting obligations progressively expand to Group 2 and Group 3 entities, organisations should begin strengthening governance, reporting processes and assurance readiness well ahead of implementation.

6. Timely Financial Reporting

ASIC has identified timely financial reporting as a key enforcement priority.

Recent enforcement activity demonstrates the regulator's increased willingness to act against organisations that fail to meet statutory reporting deadlines, including:

• More than A$2.2 million in infringement notices issued to large proprietary companies for late FY2024 financial report lodgements. 
• A$594,000 in infringement notices issued to a major retailer for delayed reporting. 
• A$792,000 in infringement notices issued to a technology group for reports lodged approximately 11 months late. 

As ASIC Commissioner Kate O'Rourke noted:

"We are stepping up enforcement action against financial reporting misconduct and will continue to leverage a range of data sources to identify potential non-compliance."

For organisations, timely financial reporting is no longer simply an administrative obligation—it is an increasingly important indicator of governance effectiveness.

ASIC's priorities reflect a broader shift towards stronger governance, greater transparency and higher-quality financial reporting.

Organisations should expect increased scrutiny where financial statements rely on significant management judgement, complex accounting estimates or evolving reporting requirements such as sustainability disclosures.

The focus is no longer limited to the final financial statements. Regulators increasingly expect organisations to demonstrate robust governance, well-supported accounting positions and comprehensive documentation throughout the reporting process.

As reporting expectations continue to evolve, organisations should also ensure their year-end financial reporting processes are equipped to support these higher standards. Preparing compliant General Purpose Financial Statements (GPFS) requires careful planning, robust documentation and effective coordination across finance, governance and audit teams.

Related insight: General Purpose Financial Statements: A Practical Guide for Australian Businesses explores practical steps organisations can take to strengthen reporting processes and meet statutory reporting obligations.

To strengthen financial reporting and audit readiness, organisations should consider:

• Reviewing impairment assessments, valuation methodologies and significant accounting judgements to ensure assumptions remain reasonable, evidence-based and well documented. 
• Validating Expected Credit Loss models using current information, forward-looking assumptions and appropriate governance controls. 
• Assessing revenue recognition policies to ensure they accurately reflect contractual arrangements and comply with Australian Accounting Standards. 
• Enhancing disclosures relating to estimation uncertainty, business risks and sensitivity analyses to provide meaningful, entity-specific information. 
• Preparing early for sustainability reporting by reviewing governance frameworks, reporting processes and assurance readiness. 
• Reviewing reporting timetables, internal controls and approval processes to reduce the risk of late lodgements and strengthen overall reporting discipline. 

Taking a proactive approach can help identify potential issues early, allowing sufficient time to address documentation gaps, refine accounting positions and improve audit readiness before reporting deadlines.

Meeting ASIC's expectations requires more than technical compliance. It requires strong governance, reliable financial information and well-managed reporting processes.

Vistra supports organisations throughout the financial reporting lifecycle, including statutory financial reporting, technical accounting advisory, audit readiness, management reporting, sustainability reporting coordination and ongoing compliance support.

Our specialists work alongside finance teams to strengthen reporting quality, improve governance and help organisations prepare confidently for increasing regulatory scrutiny.

Understanding ASIC's priorities is only one part of preparing for a successful reporting season. Organisations should also ensure their financial reporting processes, governance frameworks and reporting timelines support the timely preparation of high-quality General Purpose Financial Statements.

Continue reading: General Purpose Financial Statements: A Practical Guide for Australian Businesses  for practical guidance on strengthening reporting readiness, managing reporting timelines and meeting ASIC and ASX reporting obligations.