New audit relief instrument requires deed changes for new companies
ASIC recently revised Class Order 98/1418, which provides for financial reporting relief to wholly-owned subsidiaries that have entered into a deed of cross guarantee. As part of the revision, ASIC have also released a new pro forma deed of cross guarantee to replace the previous pro forma.
Existing deeds of cross guarantee (signed before the release of the new pro forma on 28 September 2016) do not necessarily need to be updated, however, ASIC has confirmed that, where parties wish to add a new entity to the group under the deed (so that it can obtain the audit relief), modification of the existing deed will be required by either:
- all parties executing a new deed in the form of the new ASIC pro forma, or
- varying the existing deed to reflect the new ASIC pro forma.
McCullough Robertson have been liaising directly with ASIC on these requirements and can assist with new pro forma and variation requirements. For groups whose financial year ends on 30 June, the new deed will need to be in place and any new entities added to the new deed before that time.
