VALUE ACCOUNTSSimplified DisclosureAnnual financial

This publication presents the sample annual financial report of a fictitious company, VALUE ACCOUNTSSimplified Disclosure Pty Ltd. It illustrates the financial reporting requirements that would apply to such acompany under Australian Accounting Standards on issue at 31 July 2020. Supporting commentary is alsoprovided. For the purposes of this publication, VALUE ACCOUNTS Simplified Disclosure Pty Ltd is a largeproprietary company that is the parent entity in a consolidated entity.Reporting requirements are: Australian Accounting Standards, including AASB 1060 General Purpose Financial Statements –Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities Interpretations issued by the Australian Accounting Standards Board (AASB) and the Urgent IssuesGroup (UIG) Corporations Act 2001 Australian Securities & Investments Commission releasesVALUE ACCOUNTS Reduced Disclosure 2020 is for illustrative purposes only and should be used inconjunction with the relevant legislation, standards and other reporting pronouncements.DisclaimerThis publication has been prepared for general reference only and does not constitute professional advice. It isnot intended to be and is not comprehensive in relation to its subject matter. This publication is not intended tocover all aspects of Australian Accounting Standards, or to be used as a substitute for reading any relevantaccounting standard, professional pronouncement or guidance, legislation (including the Corporations Act2001 (Cth)) or any other relevant material. Specific company structure, facts and circumstances will have amaterial impact on the preparation and content of financial reports. No person should undertake or refrainfrom undertaking any action based on this publication or otherwise rely on this publication. Any use or relianceon this publication is at a person’s own risk. This publication should not be used as a substitute for consultationwith a professional adviser with knowledge of information relevant to your particular circumstances. Norepresentation or warranty (express or implied) is given as to the accuracy or completeness of the informationcontained in this publication. To the extent permitted by law, PwC and its partners, members, employees andagents do not accept or assume any liability, responsibility or duty of care to anyone for any use of or relianceon this publication. Any references in this publication to PwC providing, or agreeing to provide, any services toany entity are illustrative only and are not intended to reflect or summarise the terms of actual arrangements inrespect of any particular parties or the provision of services to them. Accordingly, users of this publicationshould not rely on such references as reflecting or summarising actual terms. Legal advice should be obtainedas to whether any particular arrangements are required to be disclosed, and as to the form and context of anydisclosure. This disclaimer applies to the maximum extent permitted by law and, without limitation, to liabilityarising in negligence or under statute. Liability is limited by a scheme approved under Professional StandardsLegislation. 2020 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers (“PwC”) refers to the Australianmember firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please for further details.

ForewordWelcome to the inaugural edition of our new VALUE ACCOUNTS Simplified Disclosure publication. Thispublication shows the disclosures required for companies that are intending to adopt the new disclosurestandard AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Notfor-Profit Tier 2 Entities as at June 2020 or thereafter.The new standard was released alongside amendments to Australian Accounting Standards that remove theability of certain for-profit private sector entities to prepare special purpose financial statements (SPFS) forperiods beginning on or after 1 July 2021. Further information about the removal can be found in our StraightAway Alert from March 2020.The new disclosure standard better aligns the Tier 2 disclosure requirements to the international benchmark ofIFRS for small and medium-sized enterprises (SMEs) and replaces the current Tier 2 reduced disclosure regime(RDR). AASB 1060 is a separate, stand-alone standard that lists all of the relevant disclosure requirements forentities eligible to report under Tier 2 (unlike the previous RDR framework which used shading to show whichdisclosures could be omitted from the other accounting standards).We have provided a comparison of the disclosure requirements of the new standard with the previous reduceddisclosure regime (RDR) and the mandatory requirements for SPFS in Appendix B. The Appendix shows thatthere have been significant reductions in disclosures compared to the current RDR framework, but that thereare also some new disclosures that were not previously required. The Appendix will help entities that havepreviously prepared SPFS to identify the areas where they will need to increase their disclosures and begincollecting relevant information.Consistent with the new approach of having a separate, stand-alone disclosure standard, this publication is nolonger reproducing all of the disclosures from our VALUE ACCOUNTS Holdings publication. We have rewrittenit to reflect simpler operations and to remove disclosures that are not relevant to unlisted companies. We’vealso illustrated disclosures that may only be relevant for some Tier 2 entities (Appendix A).COVID-19While COVID-19 will have a significant impact on many entities and require specific disclosures in June 2020financial statements, these will vary from entity to entity and will – hopefully – not be an ongoing feature offinancial statements. We have therefore not included any illustrative disclosures in this publication. Instead, weencourage you to refer to our designated COVID-19 website which is regularly updated and includes industryspecific guidance.FeedbackWe welcome your feedback on the new VALUE ACCOUNTS Simplified Disclosure publication. Please contact usat IFRS Communications or speak to your usual PwC representative to let us know your thoughts.Regina FikkersJason PerryPartnerPwC AustraliaJuly 2020Partner Private ClientsPwC AustraliaJuly 2020PwC1

VALUE ACCOUNTS Simplified Disclosure Pty LtdAnnual financial reporting June 2020Director’s ReportFinancial statements13Statement of profit or loss and other comprehensive incomeBalance sheetStatement of changes in equityStatement of cash flows14151718Notes to the financial statementsSignificant changes in the current reporting periodHow numbers are calculatedEstimates and judgementsProfit and lossBalance sheetCash flows926293031334166Group structure67Business combinationDiscontinued operationInterests in other entities686971Unrecognised itemsPwC673Contingent liabilities and contingent assetsCommitmentsEvents occurring after the reporting period747575Further details76Related party transactionsRemuneration of auditorsParent entity financial informationAccounting policiesChanges in accounting policies77818486101Directors’ declarationIndependent auditor's report102103Appendices1042

IntroductionSimilar to the other publications in our VALUE ACCOUNTS series, this publication presents illustrative simplifieddisclosure financial statements of a fictitious company, VALUE ACCOUNTS Simplified Disclosure Pty Ltd. The financialreport complies with the Australian Corporations Act 2001 and authoritative pronouncements on issue at 31 July 2020 thatare operative for 30 June 2020 reports.VALUE ACCOUNTS Simplified Disclosure Pty Ltd is a large foreign controlled proprietary company that is the parent entityin a consolidated group which has adopted the new simplified disclosure standard AASB 1060 General Purpose FinancialStatements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities. Consequently, this publication doesnot illustrate the disclosure obligations of disclosing entities or listed companies (eg segment information and earnings pershare disclosures). Please refer to our VALUE ACCOUNTS Holdings publication for examples of these types of disclosures.Please note that the amounts disclosed in this publication are purely for illustrative purposes and may not necessarily beconsistent throughout the publication. Entities will need to adapt the illustrative disclosures to their circumstances. Entitiesmay adopt alternative disclosures, wording and forms of presentation as long as the specific disclosure requirementsprescribed in the accounting and reporting pronouncements are met.The source for each disclosure requirement is provided in the reference column on each page of the sample reports.Assumptions madeIn preparing these illustrative financial statements, we have assumed that VALUE ACCOUNTS Simplified Disclosure PtyLtd: is a large proprietary company that is owned by a foreign parent entity is a for-profit entity is a parent entity in a group of wholly-owned entities (ie without minority interests) is the head entity in a tax consolidated group does not have anyoforeign subsidiaries or other foreign operationsointerests in joint venturesorevalued property, plant and equipmentofinancial assets classified at fair value through other comprehensive incomeodefined employee benefit plans, orodeed of cross guarantee with wholly-owned subsidiaries has cash-settled rather than equity-settled share-based payments, and has previously prepared consolidated Tier 2 general purpose financial statements (GPFS).We have further assumed that VALUE ACCOUNTS Simplified Disclosure Pty Ltd had adopted AASB 16 Leases in a previousperiod and have therefore not illustrated the transitional disclosures that would be required in the first year of adoption ofthe standard. If an entity has adopted the leasing standard in the current year by using the simplified transitional approach,it will have to make the same disclosures as a Tier 1 entity. This is illustrated in our VALUE ACCOUNTS Holdingspublication (see note 26).Appendix A provides disclosures for some of the scenarios noted above that are not illustrated in the main body of thepublication, including a transition from separate entity special purpose financial statements (SPFS) to consolidated GPFS.Appendix B compares the disclosure differences between GPFS prepared under the new AASB 1060, GPFS prepared underthe current RDR framework and SPFS of non-reporting entities that are required to prepare financial reports under Chapter2M of the Corporations Act 2001. Abbreviations used in this publication are listed in Appendix C.Early adoption of standardsOther than AASB 1060, VALUE ACCOUNTS Simplified Disclosure Pty Ltd generally only adopts standards early if theyclarify existing practice but do not introduce any substantive changes. These include standards issued by the AASB as aresult of the International Accounting Standards Board’s improvements programme or, for example, the amendments madeto AASB 101 and AASB 108 by AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material.PwC3

Specialised companies and industry-specific requirementsVALUE ACCOUNTS Simplified Disclosure Pty Ltd does not illustrate the disclosures specifically relevant to specialisedindustries such as mining, agriculture, investment funds or finance. Some of these are illustrated in our other publicationsin the VALUE ACCOUNTS series: VALUE ACCOUNTS Holdings Limited (with disclosures for oil and gas, and agricultural activities in the Appendices) VALUE ACCOUNTS Investment Funds, and VALUE ACCOUNTS Superannuation Funds.The global series of Illustrative financial statements that is available on PwC Inform has further illustrative financialstatements for banks, entities in the investment property industry and private equity companies.The disclosure requirements included in VALUE ACCOUNTS Simplified Disclosure Pty Ltd are relevant to for-profitcorporate and non-corporate entities in the private sector that are required to prepare financial statements in accordancewith Australian Accounting Standards and do not have public accountability (ie do not have to report under Tier 1 of thedifferential reporting framework). The disclosures are also useful for business undertakings in the public sector, but do notidentify additional disclosures that may be required for not-for-profit private and public sector entities under AASB 1060.PwC4

VALUE ACCOUNTS Simplified Disclosure Pty LtdABN XY XYZ XYZ XYZ 1,2Annual report – 30 June 2020Directors’ report6Financial report13Independent auditor’s report to the members103Annual reportQuotation of Australian Business Number or Australian Company NumberCA153(1),(2)Under the Corporations Act 2001, a company is required to show its name and AustralianCompany Number (ACN) or its Australian Business Number (ABN) on all public documents.It may only show the ABN if the last nine digits of its ABN are identical to the last nine digitsof its ACN.ASIC-RG13Guidance on issues relating to the use of ACNs is set out in ASIC Regulatory Guide 13.PwC5

Directors’ report 1,12CA299(2)(b)Your directors present their report on the consolidated entity consisting of VALUE ACCOUNTSSimplified Disclosure Pty Ltd and the entities it controlled at the end of, or during, the year ended 30June 2020. Throughout the report, the consolidated entity is referred to as the group.DirectorsCA300(1)(c)The following persons were directors of VALUE ACCOUNTS Simplified Disclosure Pty Ltd during thewhole of the financial year and up to the date of this report:J C CampbellA L CunninghamM K HollingworthR J HunterC A MaxwellN T ToddingtonCA300(1)(c)H G Wells and B C Bristol were appointed as directors on 31 January 2020 and 1 March 2020respectively and con

Welcome to the inaugural edition of our new VALUE ACCOUNTS Simplified Disclosure publication. This publication shows the disclosures required for companies that are intending to adopt the new disclosure standard AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities as at June 2020 or thereafter. The new standard was released .