This isn't exactly a ' New ' requirement with the AASB132 accounting for Financial Instruments as it's been literally around in some form or another since as far back as 2004 .
And it's not exactly as if there has been NIL empirical examples or precedents in the Accounting Treatment of ' Convertible Debt Instruments ' ....and the fact that they were converted in July 2020 .... literally 1 month after Balance Date should still class them as a ' Financial Liability ' under the current and / or upgraded Accounting Standards. Further evidence would be the fact that the Balance Sheet restructure was well and truly planned and underway by Management pre - June 30 with their ' Convertible Notes ' already having been classed as a ' Current Liability ' in their 4 E ' Preliminary Report ' submitted ON TIME on 30th August 2020.
So I'm not buying that line that they are requiring a ' Ruling ' .... What ruling and from Whom. The only Body I can see that a ruling would be required from would be a ' Tax Ruling ' from the ATO in which case the accounts could be restated for Tax Purposes when the time comes for their submission to the ATO. And even then , I don't see how this has any advantage or disadvantage for them in so far as the tax applied to the convertible note. The relevant ' pro rata ' interest yes but not the issue price of the note and the face value of the debt. Classification to Equity is not the issue here in my opinion but more to do with who the current Auditors are in Nexia Australia at all the requirement for submission of those Tax Accounts come around next year.
So the ONLY issue I see here is that this is what you pay for when you use a lower Tier Accounting Firm in preparing your accounts. Time for a Change of Auditor I reckon as NOT applying for the necessary ASIC time extension waiver clearly falls within the responsibilities of the Auditors in my opinion.....
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What ruling and from Whom. The only Body I can see that a ruling would be required from would be a ' Tax Ruling ' from the ATO in which case the accounts could be restated for Tax Purposes when the time comes for their submission to the ATO. And even then , I don't see how this has any advantage or disadvantage for them in so far as the tax applied to the convertible note. The relevant ' pro rata ' interest yes but not the issue price of the note and the face value of the debt. Classification to Equity is not the issue here in my opinion but more to do with who the current Auditors are in Nexia Australia at all the requirement for submission of those Tax Accounts come around next year.
So the ONLY issue I see here is that this is what you pay for when you use a lower Tier Accounting Firm in preparing your accounts. Time for a Change of Auditor I reckon as NOT applying for the necessary ASIC time extension waiver clearly falls within the responsibilities of the Auditors in my opinion.....
(20min delay)