What is an accrued expense vs accounts payable?
In accounting, understanding the difference between accrued expenses and accounts payable is crucial for managing a company’s financial health. Both terms refer …
Financial disclosure describes the duty of parties to disclose all information that may be pertinent to a court case. This process starts before the commencement of a court case and does not cease until the case is finalised.
Each party must also disclose information as it comes to hand or if new information is created, and disclosure requirements apply to both physical and digital information.
Financial disclosure ensures that both parties receive a just and equitable share of total assets. To achieve this, it relies on each providing a detailed account of their financial standing.
Financial disclosure is also central to reporting requirements for private and publicly listed companies as well as charities and entities involved in elections and politics.
While certain rules stipulate disclosure requirements in all court cases, additional rules are applicable in financial cases. These rules call for full and frank disclosure of each party’s direct and indirect financial circumstances.
To that end, financial disclosure statements may include details about:
Remember that these resources may be directly or indirectly related to a party. Direct involvement means the party owns the resource or has direct access to the earnings associated with that resource.
Indirect involvement, on the other hand, describes resources and earnings that relate to another person or beneficiary. This may be a family member, but it can also be a company, corporation, trust, or associated structure.
In family law cases heard in the Federal Circuit and Family Court of Australia (FCFCOA), any property disposal made in the 12 months before a separation of two parties (or since the final separation) must also be disclosed.
Here, the word “disposal” encompasses properties that are sold, transferred, assigned, or gifted.
Financial disclosure statements must be filed online with the Commonwealth if an individual is party to a financial case related to:
Rule 6.06(8) of the FCFCOA’s Family Law Rules requires that in cases involving property, each party must serve the other:
Rule 6.06(1) of the Family Law Rules describes the general duty of financial disclosure. To that end, each party must also disclose:
In the event a financial disclosure statement does not meet these criteria, an affidavit that provides further details must be filed.
If a party’s financial circumstances change, they must file an Amended Statement within 21 days. An affidavit can also be used here if the changed circumstances can be described in 300 words or less.
There are other contexts in which financial disclosure is not only important but a legal requirement.
Part XX of the Commonwealth Electoral Act (1918) outlines a disclosure scheme that aims to increase transparency around the financial activity of political parties, political candidates, and other relevant stakeholders such as senators and donors.
The scheme requires that some parties lodge annual returns, while others lodge returns after elections.
Political parties, for example, have to provide public financial disclosures that include (but are not limited to):
Since charities receive much of their funding from the government, public financial disclosure reports are made available to increase transparency and accountability around donations.
The Australian Charities and Not-for-profits Commission (ACNC) outlines various best practices for charities to detail government contributions in their annual financial reports.
Companies listed on the Australian Stock Exchange (ASX) must operate under continuous and periodic financial disclosure rules. Additional disclosure requirements are in place for oil, gas, mining, and exploration companies.
What’s more, all companies operating in Australia are required to lodge financial reports with the Australian Securities and Investments Commission (ASIC). Annual financial reports are typically lodged at the end of the financial year and may be audited.
References
https://www.fcfcoa.gov.au/
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