Under recent amendments to the Corporations Act 2001, public companies will have to make additional disclosures about subsidiaries in their annual financial reports. The disclosures will take the form of a ‘consolidated entity disclosure statement’ and directors, CEOs and CFOs will be required to make a ‘true and correct’ declaration regarding this disclosure statement.


The new disclosure statement is part of the Federal Government’s broader reforms to enhance transparency about how entities structure their subsidiaries and operate in different jurisdictions, including for tax purposes.

The changes come about by the introduction of the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024 which received Royal Assent on 8 April 2024 after being passed by both Houses of Parliament the month before.


Listed and unlisted public companies that are required to prepare financial statements under Chapter 2M of the Corporations Act 2001 will be required to include the new disclosure statement within their financial reports.

Large proprietary companies and registered schemes are outside the scope of the reforms. Furthermore, charities that report annually to the Australian Charities and Not-for-profits Commission are not subject to the new requirements since such entities do not report under Chapter 2M.


Disclosure statement

The extent of the disclosures to be made within the consolidated entity disclosure statement will depend on the consolidation requirements applicable to the public company in question.

Where a public company is required by Australian Accounting Standards to prepare consolidated financial statements, the following information about each entity that is part of the consolidated entity must appear in the consolidated entity disclosure statement:

  • The entity’s name
  • Whether the entity is a body corporate, partnership or trust
  • Whether the entity was a trustee of a trust within the consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture within the consolidated entity
  • Where the entity was incorporated or formed (if the entity is a body corporate)
  • Where the entity is a body corporate with share capital, the percentage of the entity’s issued share capital held directly or indirectly, by the public company
  • Whether the entity was an Australian resident or a foreign resident within the meaning of the Income Tax Assessment Act 1997
  • If the entity is a foreign resident, a list of each foreign jurisdiction in which the entity was a resident for the purposes of the law of the foreign jurisdiction.

Where a public company does not have to prepare consolidated financial statements under Australian Accounting Standards, a consolidated entity disclosure statement is still required however it would only include a statement to that effect.

Note that the concept of materiality does not appear to apply in preparing the disclosure statement. Dormant, unused or immaterial entities that form part of the consolidated entity at the end of the financial year must be included in the disclosure statement to meet Government’s objective of improving transparency over corporate structures. This is confirmed by the need for the statement to be declared as ‘true and correct’ (i.e. complete and accurate) by directors (see below).

Directors’ declaration

The amendments also result in an extension of the directors’ declaration (and CEO’s and CFO’s declaration for listed public companies) currently required by the Corporations Act 2001.

The directors’ declaration is required to include a statement about whether, in the directors’ opinion, the consolidated entity disclosure statement is ‘true and correct’ (as opposed to ‘true and fair’ as is used when certifying the financial statements and related notes are not materially misstated).

Additionally, the CEO and CFO of listed public companies must include a statement in their declaration to the directors that the consolidated entity disclosure statement is ‘true and correct’.

‘True and correct’ is not defined in the legislation but rather these words take on their ordinary meaning in the context of the amendments. This concept therefore appears to be a higher threshold than ‘true and fair’ and implies a higher level of accuracy.

Since the consolidated entity disclosure statement forms part of the financial report, it will be subject to audit.


The consolidated entity disclosure statement forms part of the annual financial report. Considering the ‘true and correct’ certification required by directors (and the CEO and CFO for listed public companies), it may be easier to present the disclosure statement as a separate statement, after the notes to the financial statements but before the audit report.

This is in contrast to combining the new tax transparency information with information provided about subsidiaries in the relevant note to the financial statements as required by accounting standards. This presentation is likely to be acceptable however care will need to be taken to clearly identify the consolidated entity disclosure statement within the note so that it is evident which part of the financial report the directors (and the CEO and CFO, where applicable) declare as being ‘true and correct’ rather than ‘true and fair’.


The amendments apply for the first time to annual financial reporting periods beginning on or after 1 July 2023.

This means the changes will apply to public companies preparing 30 June 2024 annual financial reports, leaving such companies with limited time to prepare for and meet the new disclosure requirements.

In preparation for year end reporting, impacted entities should consider their group structures and implement the necessary processes to gather, verify and document the information that supports the disclosure statement and ‘true and correct’ declaration made by the directors (and CEO and CFO, where applicable).