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Written by Jayson Palomaria:

The financial reporting requirement for large proprietary companies to lodge their annual audited financial reports was introduced back in 1995 aimed at regulating the reporting of financial activities of proprietary companies which have a significant economic influence. The proprietary company reporting threshold contained in section 45A of the Corporations Act 2001, however, have not been changed since 2007.

Following the Public consultation in late 2018, the Federal Government recently amended the statutory financial reporting thresholds through the Corporations Amendment (Proprietary Company Thresholds) Regulations 2019. The thresholds were increased in order to account for nominal economic growth (as measured by changes in nominal gross domestic product (GDP)) since the thresholds were last adjusted in 2007. Further, the changes were designed to ensure that financial reporting obligations are targeted at economically significant companies, while reducing costs for smaller sized companies.

Under the new threshold, a company is considered large proprietary company for a financial year if it satisfies at least two of the following:

  • the consolidated revenue for the financial year of the company and any entities it controls is $50 million or more (up from $25m);
  • the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls is $25 million or more (up from $12.5m); and
  • the company and any entities it controls have 100 or more employees at the end of the financial year (up from 50 employees).


The increases to the proprietary company thresholds apply in relation to financial years beginning on or after 1 July 2019. Proprietary companies should now be looking at their forecasts for FY 2020 and consider if they will be classified as ‘large’. If so, it will be required to prepare and lodge an audited financial report, a director’s report and an auditor’s report with ASIC each financial year. It is expected that around one third of previously large proprietary companies will now be considered to be small under the new definitions.


Please contact our office if you have any questions, or would like any information on what these changes mean to your organisation’s financial reporting obligations.


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Clayton Lawrence

Director - Audit Division

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