ASIC reviewed ColorTV Limited's (ColorTV) financial report for the year ended 31 December 2021 and raised concerns about ColorTV's lack of disclosure of material business risks in their operating and financial review (OFR) and the presentation of 'EBITDA Operating profit/(loss)' as a non-IFRS profit measure in their profit and loss statement.
On 30 August 2022, ColorTV announced to ASX updates to their OFR, including the disclosure of material business risks, and re-presented their profit and loss statement without the non-IFRS profit measure.
ASIC has previously urged company directors to put greater focus on disclosing material business risks in financial reports and reminds preparers of financial information that non-IFRS profit measures should generally not be included in financial statements.
Background
ColorTV Limited was previously known as engage:BDR Limited.
As part of its financial reporting surveillance program, ASIC regularly reviews financial reports of listed companies and other significant public interest entities selected on a risk-basis. The program aims to improve the quality of financial reporting and ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia's markets.
ASIC Regulatory Guide 247 Effective disclosure in an operating financial review provides guidance for directors of listed entities on providing useful and meaningful information in an OFR to investors.
ASIC Regulatory Guide 230 Disclosing non-IFRS financial information provides guidance on the use of non-IFRS financial information in financial reports and other corporate documents, such as transaction documents and market announcements.
Non-IFRS financial information is any financial information that is not presented in accordance with all relevant accounting standards.
