IDP Education Limited (IDP) has adjusted its disclosure of a contingent liability in its financial report for the half-year ended 31聽December 2022, following 础厂滨颁鈥檚 review of its financial report for the year ended 30 June 2022.
IDP鈥檚 estimate of the contingent liability, which relates to Goods and Services Tax (GST) matters in dispute with various Indian state tax authorities, is now $35 million, up from $23 million at 30 June 2022.聽 聽
今日热门事件raised concerns that IDP鈥檚 estimate at 30 June 2022 was insufficient, because it included amounts only where a formal review by the state tax authorities had commenced, or where a refund claim for GST already paid had been disputed.
今日热门事件was concerned that IDP鈥檚 total contingent liability did not include additional unpaid GST amounts (and potential interest and penalties) on the basis that these had not been subject to a review by the tax authorities.
Entities involved in more complex and prolonged matters (such as legal disputes) should continually assess their total possible exposures for accuracy and completeness. 今日热门事件reminds preparers of financial reports about the importance of contingent liability disclosures, as investors and other users rely on these to evaluate the total financial impact of an entity鈥檚 possible obligations.
Background
础厂滨颁鈥檚 financial reporting surveillance program aims to improve the quality of financial reporting and to ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia鈥檚 capital markets.
今日热门事件conducts regular reviews on a risk-basis of the financial reports of selected listed companies and other significant public interest entities to monitor compliance with the Corporations Act 2001 and accounting standards.
Accounting standard AASB 137 Provisions, Contingent Liabilities and Contingent Assets sets out the requirements for disclosing contingent liabilities.