Preparing financial statements takes time, focus and judgement. With the time-pressure that is year-end reporting deadline, it becomes easier for small issues in disclosures to slip through. The good news is that many of the most common disclosure errors are entirely avoidable when you have the right processes and support.
Each reporting season, ASIC reiterates the importance of clear, entity specific and decision useful financial report disclosures. Based on our experience working with clients across Australia, the following five areas are those we most commonly see requiring improvement.
1. Insufficient revenue disclosures
One of the most frequent issues relates to revenue disclosures under AASB 15 Revenue from Contracts with Customers. While revenue recognition may be technically correct, disclosures are often generic and do not clearly explain how revenue is earned in practice. This commonly occurs where accounting policies are copied from templates, revenue streams are not meaningfully disaggregated, or key judgements such as variable consideration and timing of revenue recognition are not clearly explained. These issues can be reduced by tailoring disclosures to the entity’s specific contracts, clearly explaining performance obligations, and ensuring significant judgements are transparent and entity specific. Disclosures should explain how and when revenue is recognised in your specific entity and not just generally how AASB 15 requires revenue to be recognised.
2. Excessive or generic accounting policies not focused on material matters
Another recurring issue is the over disclosure of accounting policies that are not focused on material matters. Many financial reports still include long lists of standard accounting policies that are not relevant to the entity or add little value for users. This often arises from a conservative “include everything” approach or a failure to reassess policies each year. Applying materiality when deciding which policies to disclose, and focusing on how standards are applied in practice rather than restating requirements, can significantly improve clarity and usefulness. It is not necessary to reproduce the requirements of the Australian Accounting Standards in the accounting policies, the disclosures should instead focus on those matters where you have had to make accounting policy choices within the standards, or areas that are particularly complex. Including unnecessary information is actually inconsistent with the requirements of the standards as it obscures material information.
3. Inadequate disclosures around estimates and judgements
We also regularly see insufficient disclosure of key estimates and judgements, despite this being an enduring regulatory focus. Disclosures are frequently vague, fail to explain why the judgement is significant, or do not clearly describe the assumptions involved. This often reflects discomfort in articulating uncertainty or a lack of focus on user needs. Judgements and estimates are a key feature of our financial reports, however, to make them useful to users it is important that there is clear identification of significant judgements, plain‑language explanations of assumptions, and transparent discussion of estimation uncertainty so that users can understand how those estimates were arrived at.
4. Inappropriate current and non‑current classification of liabilities
Incorrect current and non‑current classification of liabilities remains a common issue, particularly for borrowings, lease liabilities and arrangements subject to covenants. Misclassification often arises where covenant breaches occur close to year end, waivers are obtained after reporting date, or refinancing arrangements are incomplete at balance date. Because classification is assessed based on rights and obligations at the reporting date, and not the date the financial statements are finalised, careful review of contractual terms and clear disclosure of judgements are critical to avoiding errors that can distort liquidity indicators. If at balance date there is no contractual right to defer payment for more than 12 months then the liability will need to be classified as current.
5. Inadequate disclosure of material uncertainties related to going concern
Disclosures around going concern uncertainty continue to be an area of regulatory focus and frequent judgement. We commonly see situations where there are material uncertainties — such as refinancing risk, covenant pressures, forecast sensitivity, or reliance on future funding — but disclosures are either overly optimistic or too high‑level to be meaningful. This often arises from discomfort in communicating uncertainty or a desire to avoid alarming users, particularly where management believes a positive outcome is likely. However, the accounting standards require transparent disclosure of material uncertainties that may cast significant doubt on the entity’s ability to continue as a going concern. Clear articulation of the underlying risks, key assumptions and mitigating actions, without undermining the going concern basis itself, can significantly reduce the risk of challenge from auditors and regulators.
Supporting you throughout your financial reporting process
High‑quality financial report disclosures require more than technical compliance — they require judgement, clarity and an understanding of regulator expectations. Moore Australia assists entities by reviewing and enhancing disclosures, identifying areas of heightened regulatory focus, and providing practical, entity‑specific guidance aligned to Australian Accounting Standards.
If you would like tailored guidance or assistance with any aspect of your disclosures, contact your local Moore Australia advisor. We are available whenever you need us, and we are committed to helping you prepare accurate, compliant and accessible financial information.
You can also access additional guidance by downloading the 2026 Illustrated Financial Statements, which demonstrate how disclosure requirements can be applied clearly and effectively in practice, to support your work this reporting season.
