Sponsors under the spotlight

LISTED companies will have their financial reports reviewed to identify companies that are corporate sponsors of an employee defined benefit superannuation or pension plan.

The Australian Securities and Investments Commission will be checking the reports for disclosures required by Accounting Standard AASB 1028 "Employee Entitlements".

It will then assess the company’s accounting policy applied to the deficit of that superannuation or pension plan for compliance with current accounting standards.

ASIC chief accountant Greg Pound said corporate sponsors had to report their legal obligations for any liabilities that arose from a deficit in the defined benefit superannuation plans for their employees.

"ASIC is aware that some sponsors believe that companies can choose to either recognise a liability in the financial tatements or make the required disclosures in the notes to the financial report on the grounds that AASB 1028 does not specifically require recognition of such liabilities," he said.

"However, ASIC’s view is that accounting standards in general and relevant and reliable financial reporting require the recognition of all legal liabilities.

"A liability arising from a deficit of a corporate sponsored defined benefit superannuation plan should be treated the same as any other liability under current accounting standards."

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