You may have options in how to comply with your GPFS obligation. For example, you may comply by providing a GPFS prepared using Tier 2 Reduced disclosure requirements (see AASB 1053 Application of tiers of Australian Accounting Standards). Alternatively, you may comply by providing either a GPFS for the Australian sub-group of which you are part, or the GPFS of your offshore parent.
In determining which option to adopt, we suggest you take into account how each option would best achieve the public transparency of your Australian affairs. In some circumstances, a GPFS prepared in accordance with accounting standards may give a very limited perspective of the Australian operations of the whole tax consolidated or MEC group. For example:
- In cases involving tax consolidation – the accounting standards may only allow the head company to prepare a GPFS for itself.
- In cases involving MEC groups – the accounting standards may also only require the head company to consolidate entities that it controls.
If either option applies to you, you may want to consider preparing consolidated GPFS for the tax consolidated group or including an effective consolidation or aggregation of the operations of your entire MEC group. In the latter case, a GPFS with such an inclusion would be prepared using consolidation principles (such as AASB 10 Consolidated Financial Statements). This will produce a set of financial statements that include all the members of the MEC group. Such financial statements are referred to as 'combined financial statements' in the IFRS Conceptual Framework for Financial Reporting March 2018.
Even though your GPFS is not required to be audited, we recommend you keep evidence to demonstrate your GPFS has been prepared in accordance with Australian Accounting Standards or CAAP where required. We consider it is best practice to have it audited wherever possible as a way of ensuring that you have reliable evidence about its preparation. You should give us the audited version if you are required to have your GPFS, or GPFS equivalent, audited under another law.
Where a practitioner is engaged to compile financial statements under a compilation engagement, they are to prepare them with professional competence and due care, and in accordance with the applicable financial reporting framework. A GPFS prepared under a compilation engagement will be at lower risk of non-compliance with the applicable accounting standards. However, as the practitioner is not required to verify the accuracy or completeness of the information provided by the client, it will not benefit from the same level of assurance as an audited GPFS.
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