ASIC notes the decision by InvoCare Limited (InvoCare) to recognise a deferred tax asset of $16.6 million at 1 January 2018 in its financial report for the half-year ended 30 June 2019.
This followed ASIC enquiries in relation to the tax accounting for InvoCare’s revenue stream for cemetery and crematorium memorial products in the transition to the new revenue accounting standard in the financial report for the year ended 31 December 2018.
As outlined in ASIC media release 19-143MR Major financial reporting changes and other focuses, the application of new accounting standards and tax accounting remain focus areas for financial reporting at 30 June 2019.
Directors are primarily responsible for the quality of an entity’s financial report. This includes ensuring that management produces quality financial information on a timely basis. Companies must have appropriate processes, records and analysis to support information in the financial report.
Companies should apply appropriate experience and expertise, particularly in more difficult and complex areas of accounting policies and estimates.