Financial Reporting Readiness: Improving the Year-End Process
Updated: 1 day ago
Key takeaway: A smooth year-end is decided months before balance date. Two developments make early preparation more important this cycle: a new presentation standard, AASB 18, takes effect for many companies from 2027, and climate reporting has extended to a second, larger group of entities.
Background
Most year-end problems are not technical. They come from reconciliations left until the last month, estimates without support, and information the auditor requests that nobody has assembled. The result is a compressed timetable, late adjustments and avoidable audit fees.
Lodgment deadlines do not move. Large proprietary companies and public companies that are not disclosing entities have four months after year-end to lodge financial reports with ASIC. Disclosing entities, including listed companies, have three.
What has changed
AASB 18 Presentation and Disclosure in Financial Statements replaces AASB 101. It applies to for-profit entities preparing Tier 1 general purpose financial statements for annual periods beginning on or after 1 January 2027. For a 30 June balancer, the first year is 2027–28, but comparatives must be restated, so the work starts earlier.
The standard introduces newly defined subtotals in the statement of profit or loss and requires disclosure of management-defined performance measures, such as adjusted EBITDA, with a reconciliation. It also tightens the rules on how items are grouped and split. For companies that report adjusted figures to boards, lenders or investors, those measures will move into the audited notes.
Climate reporting has reached Group 2. Entities that meet at least two of three thresholds must report climate-related disclosures under AASB S2 for financial years beginning on or after 1 July 2026:
consolidated revenue of $200 million or more;
consolidated gross assets of $500 million or more; or
250 or more employees.
For a June year-end, the first report covers 2026–27, so emissions and governance data must already be captured. Scope 3 emissions are not required in the first year. Group 3 entities follow from 1 July 2027.
Who is affected
Finance teams in large proprietary, public and listed companies.
Entities that present adjusted profit measures in investor or lender reporting.
Group 2 entities, and suppliers that will receive data requests from them.
Australian subsidiaries of overseas groups, which must align local timetables with group reporting.
Commercial implications
A weak close costs money in audit fees, management time and credibility with lenders. It also delays information the board needs. AASB 18 may change how familiar profit figures are presented, which can affect bonus targets, covenant definitions and investor communications if they are not reviewed first.
Recommended considerations
Set a close calendar with owners and dates, and agree a prepared-by-client list with your auditor in advance.
Reconcile bank, debtors, creditors, payroll, GST and intercompany accounts monthly, not only at year-end.
Update the fixed asset register, and test assets and goodwill for impairment where there are indicators.
Support accruals, provisions and revenue cut-off with documents.
Reconcile tax balances, including deferred tax and instalments.
Identify related parties and related-party transactions early.
Assess going concern with current forecasts, particularly given higher interest costs.
Map current profit measures to AASB 18 categories, and check covenants and incentive plans that rely on them.
If you may be a Group 2 or Group 3 entity, confirm your status and start data collection now.
Sources
Speak with Reset Group. We can review your year-end process, prepare for AASB 18 and help assess climate reporting obligations. Call +61 2 8208 3314 or email info@resetgroup.com.au.
General information only, current at 30 October 2026. It does not take your circumstances into account and is not advice. Liability limited by a scheme approved under Professional Standards Legislation.
Comments