Preparing & presenting financial information

CSF reporting requirements

  • Financial Statements must be included in the CSF offer document. Financial Statements, as required by the Corps Act, must be prepared and presented in accordance with the accounting standards (RG 261 Table 18; page 52). In ASIC’s CSF regulatory guide they note that financial statements include a balance sheet, profit and loss, cashflow statement and statement of changes in equity - this may be more than your accountant currently prepares.
  • Part 2M (s.292) of the Corps Act lists small proprietary companies with one or more CSF shareholders being required to prepare financials per the ‘accounting standards’ (s.296).
  • AASB 2020-2, details those listed under Part 2M will prepare GPFR – SD (AASB 1060) as a minimum requirement from 1 July 2021 onwards.


<TO BE INSERTED BEFORE THE FINANCIAL STATEMENTS>

“Below is a summary of the [audited*, if applicable]* [consolidated*, if you have multiple entities]* financial statements of the Company [and its controlled subsidiaries*, if you have multiple entities]* for the financial years ended 30 June 2024 [and 30 June 2023, if applicable - we recommend including multiple years if relevant to investors].Financial information for the ## months ended ## have also been included. The information has been prepared on a consistent basis based on management accounts, and accordingly may be subject to change.”

General notes for your financial statements.

Please ensure this following before sharing your financial statements with us:

  • All numbers should be rounded to the nearest dollar
  • Use a comma as a thousand separator (1,000 rather than 1000)
  • Show negative numbers as (1,000) rather than -1,000
  • Number formatting should be consistent in all of your financial statements
  • Check that all subtotals equal the sum of line items above them
  • Check that all totals are the sum of the sub totals above them
  • Don’t include notes to the accounts unless they contain material information
  • All four financial statements have been included in the format below
  • Any revenue or expenses numbers in other sections of you offer document align with your financial statements
  • Combine line items to simplify your financial statements where appropriate - e.g. have a single cash and equivalents line rather than listing each bank account in your balance sheet
  • If including management accounts (for YTD numbers) include them as a column in your existing financial statements.
  • The column order of your financial statements should be: YTD, FY24, FY23

Balance sheet template & notes

Use the image below as a format reference for your Balance sheet.


Check:

  • Any related party loans have been disclosed as a separate line item
  • Related party loans align to the sources of funding section of your offer document
  • Confirm with your accountant if founder loans are current / non-current liabilities (usually if payment is at the discretion of the company they are non-current)
  • The closing cash balance in the Cash Flow Statement should match Cash and Cash Equivalents in your Balance Sheet. Changes in borrowings on the balance sheet should also align to proceeds less repayment of borrowings in your cash Flow Statement.
  • The line items in the equity section of your balance sheet should also align with the issued capital, retained profits and total equity figures in the Statement of Changes in Equity
  • Column are “as at [Date]”
  • Check that subtotals equal the sum of line items above them and match to source information

Profit & loss (P&L) statement template & notes

Use the below image below as a format reference for the P&L Statement.


Check:

  • Compare the Profit/Loss figures with the Balance Sheet and Statement of Changes in Equity to ensure they reconcile e.g. your net profit after tax number should align to the changes in retained earnings
  • Check that subtotals equal the sum of line items above them and match to source information
  • Include a line for income tax expense even if you made a loss or did not pay tax
  • Column headings should be “For the year ended [Date]” or “For the x months ended [Date]”
  • Double check any revenue figures elsewhere in the offer document are consistent with revenue shown here
  • We recommend presenting in this format rather than using a trading statement
  • If relevant include financing costs as a separate line item rather than in Admin expenses.

Cash flow statement template & notes

Use the below image below as a format reference for the Cash Flow Statement.


Check:

  • Compare the opening and closing balance of Cash with the Cash and Cash equivalents line in the Balance Sheet to ensure they reconcile
  • Debt drawn during the period should align with the proceeds from borrowings line item.
  • Proceeds from issue of shares should also align to share issuances.
  • Column headings should be “For the year ended [Date]” or “For the x months ended [Date]”
  • Check that subtotals equal the sum of line items above them and match to source information
  • If there are large differences between the cash revenue / expense figures and the numbers in your Profit and Loss include commentary in the management commentary on the reasons for this.
  • (A), (B), (C) in the example are placeholders that need to be removed in the final version

Statement of changes in equity template & notes

Use the below image below as a format reference for the Statement of Changes in Equity.

Check:

  • Opening and closing balances of issued capital, retained profits and total equity reconcile with the line items in the equity section of your balance sheet
  • Profit after income tax reconciles with P&L
  • All periods included in the other statements have been included
  • Check that subtotals equal the sum of line items above them and match to source information

Management comments

We recommend the use of percentages and financial metrics is recommended over simply restating the numbers in the financial statements (unless the absolute numbers are small enough that percentage growth is misleading). This approach ensures greater clarity in interpreting the financial statements for readers.

We also recommend discussing recent trends on a more granular level than your financial statements show - e.g. revenue in the last 3 months vs the prior corresponding period.

Also discuss any large movements in your financial statements, note why they happened and the impact on the business - e.g. marketing expenses increased y% due to focus on new markets leading to x% increase in revenue.

Check all comments and figures to ensure consistency with the financial statements presented (e.g. confirm that the revenue numbers in the statements have been used to calculated revenue growth etc.) Readers will check these figures.

Please refrain from making forward-looking statements that cannot be substantiated with data or guarantee growth purely based on assumptions.

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Birchal Pty Ltd (ABN 11 616 478 767) (Birchal) and Birchal Financial Services Pty Ltd (ABN 39 621 812 646) (BFS) are part of the Birchal group of companies. BFS is a licensed CSF intermediary and is authorised by ASIC (AFSL 502618) to provide a crowd-funding service. Information Birchal or BFS provides is not intended to imply any advice, recommendation or opinion about a financial product or service. Always consider the general CSF risk warning and offer document before investing. © Birchal Pty Ltd.