ACCESS Family Business - March 2019

BUSINESS

WESTERN SYDNEY

With David Pring

WELCOME o KPMG Family Business ar icles or how KPMG can help wi h your ea ure ar icles, which I hope you enjoy business, please eel ree o con ac me on reading. I you would like o discuss hese 9455 9996 or davidpring@kpmg.com.au

Welcome AASB 16 Check: Will my ‘SMALL’ proprie ary company become ‘large’? n PATRICIA STEBBENS AND MICHAEL VOOGT he new leases s andard requires en iies ha are lessees o recognise a righ -o -use asse or mos o heir leases.

Tis could resul in a signi can s ep up in he value o asse s recognised on ransiion. Tis AASB 16 Check considers he impac o AASB 16 Leases on nancial repor ing obliga ions or proprie ary companies under he Corpora ions Ac 2001.

T

Transition scenario Le ’s pose a scenario ha prior o he da e o ini ial applica ion o AASB 16, a company had 30 employees, revenues o $60 million, and o al asse s o $10 million.

I was classi ed as a small proprie ary company under he Corpora ions Ac 2001, and did no have o prepare or have i s nancial s a emen s audi ed. Te company leases warehouse premises o s ore i s inven ories, and wo oors o an o ce building.

On applying AASB 16, he company recognises righ -o -use asse s or bo h o hese leases. As a resul , o al asse s increase o $20 million.

A he end o he nancial year, he company has o al asse s o $20 million, revenues o $70 million, and 30 employees.

Ques ion: Given he increase in o al asse s on applica ion o AASB 16, does he company need o prepare nancial s a emen s or lodgemen wi h ASIC? In erpre ive response: I is highly likely.

Te company now mee s he requiremen s o a large proprie ary company under he Corpora ions Ac .

Te implica ion o his change in s a us is ha generally a large proprie ary company has nancial repor ing obliga ions under he Corpora ions Ac , including a requiremen o prepare and lodge audi ed nancial repor s wi h ASIC.

The implication of this change in status is that generally a large proprietary company has financial reporting obligations under the Corporations Act, including a requirement to prepare and lodge audited financial reports with ASIC.”

“

- PATRICIA STEBBENS In technical speak A proprie ary company is classi ied as a large proprie ary company where any wo o he ollowing condi ions are me : • consolida ed revenue or he inancial year is ≥ A$25 million.

• consolida ed gross asse value as a he end o he inancial year is ≥ A$12.5 million.

• employees o he company and i s con rolled en i ies as a he end o he inancial year ≥ 50 employees.

[Corpora ions Ac 2001, s45A] In November 2018 he Governmen proposed increasing hese hresholds. e er o our epor ing Upda e 18 U-004 Special purpose on li e-suppor ? or more de ail.

A small proprie ary company is no required o prepare nancial repor s unless i is oreign con rolled, shareholders direc i o do so, or ASIC reques s nancial repor s.

[Corpora ions Ac 2001, s292(2)] I you would like o discuss he implemena ion o he new s andard or your organisaion, ge in ouch wi h David Pring on 9455 9996 or davidpring@kpmg.com.au.

First published by Patricia Stebbens, Partner, KPMG Australia and Michael Voogt, KPMG Australia

What is top of CEO'S agenda?

Business of Family Master Classes How can you grow your family business, while balancing the needs of the business and the family?

Find out more at KPMG.com/au/businessoffamily

Share your vision, develop your plan!

© 2019 KPMG, an Australian partnership. All rights reserved. 282160950ENT.

WESTERN SYDNEY BUSINESS ACCESS MARCH 2019

21

Family Business

www.wsba.com.au

www.facebook.com/AccessNewsAustralia/

Digi al Trans orma ion is op o CEO agendas n ROB BAZZANI IGI AL rans orma ion is he number one priori y or Aus ralia’s mid-marke businesses in 2019, according o a survey by KPMG Aus ralia.

Te dual challenges o innova ion and disrup ion ake second place, while he need o make heir businesses ruly cus omer- and ci izen-cen ric came hird in he lis o business challenges.

In hird posi ion were concerns overregula ion. Tis covered bo h he sec orspeci c regula ions acing he nancial services indus ry and he broader challenges o harmonising business regula ion; cuting red ape; and concerns over he capaci y/ capabili y o Aus ralia’s regula ors.

Te ine ec iveness o governmen o deal wi h hese issues was also a major gripe, wi h responden s no ing he upheavals bo h a ederal and s a e level ha have plagued he Aus ralian poli ical landscape and demons ra ing a lack o belie ha Aus ralia’s major par ies can work cohesively on na ional agenda i ems.

Te second annual KPMG business repor , Keeping Us Up A Nigh , surveyed more han 220 C-sui e execu ives in bo h large and medium-sized businesses.

Al hough responden s were asked o name heir op ve issues, recurring hemes cu across speci c concerns, indus ries and size o business.

Te op 10 concerns or he mid-marke were: • Digi al rans orma ion.

• Innova ion & Disrup ion.

• Cus omer-cen rici y.

• egula ion.

• Poli ical Paralysis.

• Cos compe i iveness.

• Cybersecuri y & Da a privacy.

D

22

• Public rus .

• Big da a.

• In ras ruc ure and liveable ci ies.

For he mid-marke , he ocus on cus omer experience and expec a ions in an increasingly digi ized world, he need o be cos compe i ive in disrup ed marke s ha are also acing regula ory change, were clearly op o mind, par icularly as business leaders see litle ac ion rom governmen .

For big business, public rus was a major issue, no doub uelled by he oyal Commission in o he Banks, as well as wellpublicised corpora e scandals. Te midmarke conversely placed he lack o public rus as number eigh in he poll, behind issues o cybersecuri y and da a privacy.

We’re no surprised ha he mid-marke pu s worries abou digi al rans ormaion a he op o he lis . For he mid-marke ha can be ex remely challenging.

Tere’s a lo a s ake: in he innova ion race, he winner usually akes all. However, rue rans orma ion should also include cul ure – ofen he poor cousin behind he more visible echnology inves men .

Being cos compe i ive – wi h responden s ci ing he rising cos s o employers o energy, raw ma erials, axes and governmen charges and labour cos s, including wages – is a de ni e issue. Award and penal y ra es remain op o mind a he smaller end-o -business scale and con ribu e o uncer ain y.

Tis is uelled by genuine unres on how Big Da a is being used, how ofen, by whom, as individuals grapple wi h a world in which in orma ion is shared, raded and po en ially misused.

To learn more, please contact David Pring on 9455 9996 or davidpring@kpmg.com.au.

FIRST PUBLISHED BY ROB B AZZANI, NATIONAL M ANAGING P ARTNER, KPMG ENTERPRISE AUSTRALIA, IN INSIDE SMALL BUSINESS

For big business, public trust was a major issue, no doubt fuelled by the Royal Commission into the Banks, as well as well-publicised corporate scandals. The mid-market conversely placed the lack of public trust as number eight in the poll, behind issues of cybersecurity and data privacy.”

“ - ROB BAZZANI

WESTERN SYDNEY BUSINESS ACCESS MARCH 2019

Balance brings success At KPMG Enterprise we believe that in a rapidly changing world, supporting family business is more important than ever.

The power of open communication, embracing the wisdom of all generations, and planning for the future can unlock your competitive advantage.

To ďŹ nd out how, talk to us today.

David Pring Partner, KPMG Enterprise davidpring@kpmg.com.au 02 9455 9996

Peter Tracey Partner, KPMG Enterprise petertracey@kpmg.com.au 02 9455 9144

Anticipate tomorrow. Deliver today.

KPMG.com/au/enterprise

Š 2018 KPMG, an Australian partnership. All rights reserved. September 2018. 258795324ENT.

WESTERN SYDNEY BUSINESS ACCESS MARCH 2019

23