Can a company be exempted from the preparation of financial statements?
A dormant non-listed company (other than a subsidiary of a listed company) is exempt from requirement to prepare financial statements, if:
(a) the company fulfils the substantial assets test; and
(b) the company has been dormant from the time of formation or since the end of the previous financial year.
The substantial assets test is that the total assets of the company at any time within the financial year must not exceed $500,000.
For a parent company, the consolidated total assets of group at any time within the financial year must not exceed $500,000.
What is a dormant company?
A dormant company is one that does not carry on business and has no income for the accounting period.
What if my company did not fulfil the above criteria (a) and (b)?
Dormant unlisted companies which do not fulfil the substantial asset test must prepare financial statements but are exempt from audit.
Dormant listed companies and their subsidiaries which do not fulfil the substantial asset test must prepare financial statements. Audit exemption may or may not be applicable.
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