THE Australian Securities and Investments Commission has issued a new class order on reporting requirements for Australian Financial Services licensees who are natural persons.
A natural person is defined as an individual, as opposed to a company, partnership or trustee.
The class order applies to a profit and loss statement, also known as a statement of financial performance, that must be prepared and lodged by a natural person licensee under subsection 989B(1) of the Corporations Act.
The class order permits a natural person licensee to exclude from the profit and loss statement revenues and expenses that do not relate to his or her financial services business.
This means a natural person licensee could choose to exclude personal revenue and expenses and/or revenue and expenses that relate to any other business they conduct.
Alternatively, a natural person licensee can choose not to rely on the class order and instead include, in a profit and loss statement, all of their revenues and expenses, whether personal or business.
ASIC has also released revised FS 70:Australian Financial Services Licensee – Profit and Loss Statement and FS 71:Australian Financial Services Licensee – Audit Report forms.
A natural person licensee must indicated in the revised FS 70 form the type of revenues and expenses that are included in their profit and loss statement.
The relief under the class order is confined to the preparation of profit and loss statements.
A natural person must still prepare a balance sheet, also known as a statement of financial position, that discloses all of his or her assets and liabilities including his or her personal assets and liabilities and the assets and liabilities of any other business.
