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Following a consultation process, the ASX has revised the reporting requirements for start-up entities and resources companies. Cannings Purple’s Investor Insight team explain.
Following a consultation process, the ASX has revised the reporting requirements for start-up entities and resources companies that are required to produce quarterly cashflow reports, starting from the September quarter.
While most of the changes are simple terminology changes to reflect modern accounting nomenclature, there are a few more substantial changes that should result in further clarity for investors.
For September reports, companies will be required to present separate sections in the Appendices disclosing payments to directors and their associates and payments to related entities and their associates. Currently, these payments are amalgamated in a single table in the Appendices.
In regards to the financing section of the cashflow reports, there has been some confusion regarding the 'Finance facilities available' with some companies reporting the residual balance available. Following the changes, this field will become 'Total Facility Amount".
Companies will also need to provide further information regarding debt facilities, with a requirement to name the lender, interest rate and whether it is secured or unsecured.
Start-up entities will need to adopt a section that has been in the resources companies' reports for a while. From the September quarter, start-ups will need to provide an estimate of cash outflows for the next quarter.
It's not all extra information that needs to be provided. For resources companies completing an Appendix 5B, there will no longer be a requirement to provide a summary of issued and quoted securities at the end of the quarter, with the ASX finding that the Appendix 3B disclosures are sufficient.
Overall, the changes are not onerous and ensure some degree of standardisation across resources and non-resources companies.