Our audit team undertakes the complete range of audits required of Australian accounting laws to help you to help you meet obligations or fulfil best practice procedures.
Following recent decisions made at the Australian Accounting Standards Board (AASB) meetings, we now have a very clear sense of what the final Australian Sustainability Reporting Standards (ASRS) will look like.
We help clients understand and address their employment tax obligations to ensure compliance and optimal tax positioning for their business and employees.
Stay updated on the FBT exemption phase-out for plug-in hybrids (PHEVs) effective from 1 April 2025. Learn about the Independent Senator’s Bill, ATO guidance, and examples of financially binding commitments affecting FBT treatment.
We provide independent oversight and review of your organisation's control environments to manage key risks, inform good decision-making and improve performance.
We enable our clients to achieve their strategic objectives, fulfil their purpose and live their values supported by effective and appropriate risk management.
Global Internal Audit Standards (GIAS), it aims to improve and clarify both mandatory requirements and recommended guidance for the Internal Audit function, in turn improving the quality of Internal Audit across the industry.
Our forensics team identifies and obtains relevant information, investigates the financial issue at hand and provides a clear, concise, sustainable opinion as...
Our team advises at all stages of a litigation dispute, taking an independent view while gathering and reviewing evidence and contributing to expert reports.
Our M&A team works with clients to achieve a full or partial sale of their business, to ensure achievement of strategic ambitions and optimal outcomes for stakeholders.
Our operational deal services team helps to ensure the greatest possible outcome and value is gained through post merger integration or post acquisition integration.
Despite a decrease in M&A deal volumes and IPO activity in the face of economic uncertainty, Australia’s retail sector remains appealing to investors. Through our analysis of Australian retail M&A and equity markets in the 18 months to 31 December 2023, we saw the retail sector face a mix of challenges and opportunities.
Our finance and funding team works to access sources of finance, present your case to potential funders and negotiate a long-term sustainable relationship.
We provide effective and strategic corporate finance services across all stages of investments and transactions so clients can better manage costs and maximise returns.
We work closely with clients and lenders to provide holistic debt advisory services so you can raise or manage existing debt to meet your strategic goals.
Our proven methodology identifies opportunities to improve your processes and optimise working capital, and we work with to implement changes and monitor their effectiveness.
The aged care overhaul is here, with major reforms shaping the future of care for older Australians. From funding shifts to enhanced home care options, these changes will require careful planning from businesses in the sector. Find out how the $5.6b investment into the quality, viability, and accessibility of aged care services and related reforms will affect providers and why strategic planning is crucial for the year ahead.
Our insolvency teams takes a proactive approach so our clients have access to more business turnaround options and retain the most value for all stakeholders.
Rising costs, supply chain disruptions, and shifting consumer behaviour are pushing many retailers to the edge. Taking immediate action to reduce operational expenses and prioritise cash flow management can give businesses the breathing room they need. Retailers must adapt quickly to survive these challenging market conditions and avoid insolvencies.
We help clients improve commercial performance, profitability and address challenges after internal or external triggers require a major business model shift.
We provide strategic director advisory services in times of business distress to help directors navigate issues and protect their company and themselves from liability.
We work closely with clients and lenders to provide holistic debt advisory services so you can raise or manage existing debt to meet your strategic goals.
Rising costs, supply chain disruptions, and shifting consumer behaviour are pushing many retailers to the edge. Taking immediate action to reduce operational expenses and prioritise cash flow management can give businesses the breathing room they need. Retailers must adapt quickly to survive these challenging market conditions and avoid insolvencies.
We work with private businesses across Australia – and internationals looking to Australia for their investments and operations – on all accounting and...
Our outsourced CFO services provide a full suite of CFO, tax and finance services and advice to help clients manage risk, optimise operations and grow.
Having a considered and informed ESG response has never been more important for all organisations as we are seeing awareness of the elements of ESG continue to...
There is a growing demand for organisations to provide transparency on their commitment to sustainability and disclosure of the nonfinancial impacts of their business activities. Commonly, the responsibility for sustainability and ESG reporting is landing with CFOs and finance teams, requiring a reassessment of a range of reporting processes and controls.
With the ESG and sustainability landscape continuing to evolve, we are focussed on helping your business to understand what ESG and sustainability represents and the opportunities and challenges it can provide.
As the demand for organisations to prepare information in relation to ESG & sustainability continues to increase, through changes in regulatory requirements or stakeholder expectations, there is a growing need for assurance over the information prepared.
Senate has now passed legislation mandating climate-related disclosures and businesses must have an understanding of what the AASB sustainability standards actually require for compliance.
As Retailers face increasing pressure to enhance efficiency and reduce costs, Robots as a Service (RaaS) is emerging as a game-changer in warehouse automation. Offering a scalable, subscription-based model, RaaS allows businesses to integrate cutting-edge robotics without the burden of upfront investment.
Investment and business opportunities in Vietnam are expanding rapidly, driven by new markets, diverse industries, and Vietnam's growing role in export manufacturing, foreign investment, and strong domestic demand.
Treasury is taking steps to ensure fairer tax treatment for foreign resident investors by tightening Australia's foreign resident Capital Gains Tax (CGT) regime. Proposed changes aim to broaden the CGT base and enhance integrity, impacting infrastructure, energy, agriculture, and more.
Treasury is taking steps to ensure fairer tax treatment for foreign resident investors by tightening Australia's foreign resident Capital Gains Tax (CGT) regime. Proposed changes aim to broaden the CGT base and enhance integrity, impacting infrastructure, energy, agriculture, and more.
Following the recent removal of tariffs on Australian wine by China, the industry is keen to rebuild relations and explore the right export markets. This presents Australian wine producers with a chance to reassess their position in the global market.
To facilitate continued innovation in the Agribusiness sector, the Federal Government’s Research and Development Tax Incentive supports companies to undertake research and development activities that meet the eligibility criteria.
From an active natural resources M&A market, a growing energy and renewable energy market, to new technologies and export and trade agreements – we have the...
At Grant Thornton we do things differently because we understand that when you strive for better and care about what you do remarkable things are possible.
The compelling client experience we’re passionate about creating at Grant Thornton can only be achieved through our people. We’ll encourage you to influence how, when and where you work, and take control of your time.
At Grant Thornton, we strive to create a culture of continuous learning and growth. Throughout every stage of your career, you’ll to be encouraged and supported to seize opportunities and reach your full potential.
To be able to reach your remarkable, we understand that you need to feel connected and respected as your authentic self – so we listen and strive for deeper understanding of what belonging means.
We’re passionate about making a difference in our communities. Through our sustainability and community engagement initiatives, we aim to contribute to society by creating lasting benefits that empower others to thrive.
As a new graduate, we aim to provide you more than just your ‘traditional’ graduate program; instead we kick start your career as an Associate and support you to turn theory into practice.
For years commencing on or after 1 July 2023, Australian public companies that prepare financial statements under Chapter 2M of the Corporations Act 2001 are required to provide a consolidated entity disclosure statement (‘CEDS’).
Entities that are required to consolidate subsidiaries must provide summary information regarding the entities comprising their consolidated group. Entities that are not required to prepare consolidated financial statements will be required to make a statement to this effect. Directors will also be required to include a statement within their directors’ declaration that CEDS is ‘true and correct.’
Download the full Consolidated Entity Disclosure Statement and FAQ's
The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023 (‘the Amendment’) was passed on the 27 March 2024 by the Federal Government. The Amendment modifies the Corporations Act 2001 (‘the Act’) such that Australian public companies are required to disclose specific information about their subsidiaries within their annual financial reports in the form of a ‘consolidated entity disclosure statement’ (‘CEDS’ or ‘the Statement’). The CEDS is a separate statement included in the annual financial report.
The Amendment applies for the first time for financial years ending on or after 30 June 2024. Management of public companies that report under the Act should consider the information required to be disclosed within the CEDS by the Amendment and commence a project to gather the required data, including implementing appropriate control structures. The information required includes the legal name of each entity within the consolidated group, its place of incorporation, and its tax residency, without the context of materiality.
The stated purpose of the Amendment is to protect the integrity of the Australian tax regime and improve transparency regarding taxation outcomes. The Amendment also included changes to the thin capitalisation regime for foreign-controlled entities or outbound multinational groups.
Which entities are impacted by the Amendment?
The Amendment applies to all public companies reporting under the Act, including unlisted public companies. The Amendment applies regardless of whether they prepare consolidated financial statements, but with varying impact.
It does not apply to proprietary companies, trusts, registered schemes, registrable superannuation entities or public companies that do not report under the Act (e.g. those that report under the Australian Charities and Not-for-profits Commission Act 2012).
What is the impact on these entities?
All public companies reporting under the Act are required to prepare a CEDS, regardless of whether they are required to prepare consolidated financial statements or not. If the entity is not required to provide the summary information required by the Amendment, they are required to make a statement to that effect within the CEDS.
What is the CEDS?
The CEDS is a separate statement and a component of the annual financial report. The Amendment changes the required contents of an annual financial report defined in section 295 of the Act to constitute:
a. The financial statements for the year; and b. The notes to the financial statements; and c. For a public company—the consolidated entity disclosure statement; and d. The directors’ declaration about the statements and notes.
What information is the CEDS required to contain?
The Amendment adds s295(3A) to the Act and requires the following information to be included in the CEDS for each entity within the consolidated group (including the parent):
The entity’s name
Whether:
The entity was a body corporate, partnership, or trust; and
The entity was a trustee of a trust, partner in a partnership, or participant in a joint venture where the trust, partnership and joint venture are consolidated.
If the entity is a body corporate:
The place of incorporation; and
The percentage of the entity’s issued share capital that was held by the public company at the end of the financial year.
Whether, at the end of the financial year:
The entity was an Australian or foreign tax resident; and
If the entity was a foreign resident, a list of each foreign jurisdiction in which the entity was a tax resident.
Where the entity is not required to provide this information as it is not required to prepare consolidated financial statements, it must make a statement to this effect within the CEDS. Such an entity is not required to provide the information above.
Is there an impact on other parts of the annual financial report?
Directors are required to confirm in their directors’ declaration that the information disclosed in the CEDS is ‘true and correct’.
‘True and correct’ is different to the ‘true and fair’ declaration that applies to other parts of the financial report and is not defined in the Amendment or elsewhere in the Act. The intent of the statement, as described in the explanatory memorandum issued in support of the Amendment, is to ensure that the disclosures in the CEDS are complete and accurate.
Is there an impact on reporting by CEOs and CFOs for public companies that are listed?
CEOs and CFOs of listed public companies are required to include the same statement in their section 295A declaration to directors.
What is the consequential impact of the statement of ‘true and correct’ on directors?
By making a statement that the CEDS is ‘true and correct’, directors appear to be being held to a higher threshold of accuracy than ‘true and fair’. As a result, appropriate control structures will need to be established by companies as part of their annual financial reporting process to provide directors with the necessary information to allow them to make the statement of ‘true and correct’.
This may require entities to undertake a project to collate the appropriate data, engage with international taxation experts, and accelerate taxation processes to ensure that matters such as tax residency are appropriately disclosed in accordance with relevant tax legislation.
What is the consequential impact on the audit opinion?
As the CEDS is a part of the annual financial report, the auditor is required to report whether ‘reasonable assurance’ that the following items are not materially misstated has been obtained:
the CEDS; and
the opinion of the directors in the directors’ declaration that the CEDS is true and correct.
Frequently Asked Questions
Yes, the entity is required to prepare a CEDS. The entity is required to make a statement the entity is not required to prepare consolidated financial statements. For clarity to users, we recommend a statement as to the reason why a CEDS is not included.
No. ASIC has made an explicit statement that the CEDS must be a separate statement and cannot be included as a note to the financial statements, or as an addition to other information within the financial statements.
No. Investment entities, defined in AASB 10 Consolidated Financial Statements, are required to consolidate only those subsidiaries whose main purpose and activities are providing services that relate to the investment entity’s investment activities. The Amendment is explicit in that it applies to entities that are ‘part of the consolidated entity’. As a result, in our opinion, the CEDS would only include those subsidiaries that are required to be consolidated and exclude those that are excluded from consolidation.
The CEDS is not scope limited to only those entities that are ‘direct’ subsidiaries – i.e. only those entities which the public company has a direct ownership interest (vs indirect through other subsidiaries). All entities required to be included in the consolidated financial statements of the group of which the public company is the parent are required to be included.
Yes. ASIC has made an explicit statement requiring all consolidated subsidiaries be included, regardless of materiality.
The CEDS will form part of the annual financial report and, as a result, will be subject to audit procedures. This will impact the scope of engagements with auditors.
‘True and correct’ is not defined within the Act. The explanatory memorandum for the Amendment described it as being similar to ‘complete and accurate’.
The auditor will opine separately on the CEDS. This opinion may be ‘clean’ – i.e. unmodified – or it may be modified. As of the date of this document, entities should not assume that unmodified opinions will be achievable in the context of the definition of ‘true and correct’ and the requirement that all subsidiaries, regardless of materiality, be included. Guidance is being sought from the Auditing and Assurance Standards Board.
The Amendment and its explanatory memorandum does not include a definition or explanation of ‘part of the consolidated entity’. In our view, an entity that is not a subsidiary of a public company is not a ‘part of’ the public company, but instead represents an asset held by the public company. The definition of a subsidiary is contained within AASB 10 Consolidated Financial Statements. This definition can be nuanced and is not limited to legal ownership of share capital or its equivalent. We recommend directors consider engaging financial reporting specialists to assist in assessing control where more complex arrangements exist as a part of the implementation of appropriate controls.
Determination of tax residency is complex, a matter of law, and may be required to be determined on an operation-by-operation basis (and not entity-by-entity). As a result, we recommend that entities consider obtaining formal advice from tax experts. ASIC has stated that ‘entities that determine tax residency in good faith and in accordance with the Commission of Taxation’s public guidance may declare that the tax residency status of a subsidiary is true and correct for the purpose of the CEDS.’
Yes. All subsidiaries are required to be included. That the subsidiary is not a tax resident of any jurisdiction is required to be disclosed.
The definition of a ‘body corporate’ in this context is not clearly defined within the Act. The Department of Finance has published a definition as follows:
A legal entity, other than a body politic or a natural person. It includes a statutory corporation, a company and an incorporated association.
The intent of this definition, and its usage in the Amendment, would indicate that all subsidiaries of the public company are required to be included, regardless of their legal structure.
No. The CEDS is prepared only as a part of annual financial reports.
No. The CEDS is prepared with respect to the current financial reporting date only.
This statement is required to be included in a CEDS, not as a part of the directors’ report, directors’ declaration, or annual financial statements. Many entities will include a CEDS that is limited to this statement.
We recommend that directors include a basis of preparation explaining the accounting and taxation judgements made by directors in preparing the CEDS.
An example has been included in the Appendix to this document.
Consolidated Entity Disclosure Statement – entity is not required to prepare consolidated financial statements
Where a public company does not have any subsidiaries
Public Company Limited does not have any controlled entities and therefore is not required by the Australian Accounting Standards to prepare consolidated financial statements. As a result, Public Company Limited has not prepared a consolidated entity disclosure statement.
Where a public company is not required to prepare consolidated financial statements because it is an investment entity
Public Company Limited is an investment entity applying the exemption from consolidation described in AASB 10 Consolidated Financial Statements and does not have any subsidiaries that are not investments. The entity is not required by Australian Accounting Standards to prepare consolidated financial statements. As a result, Public Company Limited has not prepared a consolidated entity disclosure statement.
Directors report – where a public company is not required to prepare consolidated financial statements because it is an intermediate parent and the exemptions within AASB 10 are applied
Public Company Limited is an intermediate parent applying the exemption from consolidation described in paragraph 4 of AASB 10 Consolidated Financial Statements. The entity is not required by Australian Accounting Standards to prepare consolidated financial statements. As a result, Public Company Limited has not prepared a consolidated entity disclosure statement.
Consolidated Entity Disclosure Statement – Basis of preparation
Basis of Preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes required information for each entity that was part of the consolidated entity as at the end of the financial year.
Consolidated entity
This CEDS includes only those entities consolidated as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements (AASB 10).
Determination of Tax Residency
Section 295 (3A) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgment as there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public guidance.
Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with.
Partnerships and Trusts
Australian tax law does not contain specific residency tests for partnerships and trusts. Generally, these entities are taxed on a flow-through basis so there is no need for a general residence test. There are some provisions which treat trusts as residents for certain purposes but this does not mean the trust itself is an entity that is subject to tax.
Additional disclosures on the tax status of partnerships and trusts have been provided where relevant.
Please note the information and attachments on this page are subject to change without notice. Last edited 16 July 2024.
Many high net wealth families seek advice on different ways to manage their charitable endeavours. Setting up a Private Ancillary Fund (PAF) may be an attractive option for your family; it is a tax-efficient structure, but can offer so much more.
The current economic environment is challenging for businesses trying to operate when budgets are tighter and profit margins are squeezed. Family businesses are uniquely positioned as they’re used to maintaining a long-term perspective, naturally fostering a transgenerational mindset through knowledge sharing, learning and investment in the business.
As we approach the end of FY23 what are the key areas preparers of financial statements need to consider? Preparers of financial statements will breathe a sigh of relief to know there are no major changes to accounting standards applicable for FY23, however there are some amendments to existing standards to think about ahead of year end, as well as some on the horizon where early adoption may be worth considering.
Subscribe now to be kept up-to-date with timely and relevant insights, unique to the nature of your business, your areas of interest and the industry in which you operate.
