The Australian Government has launched new schemes to aid the Australian economy as it recovers from the effects of the coronavirus pandemic. The new schemes are targeted at SMEs as well as the arts and entertainment sector. This Reporting Update provides an overview of the schemes and discusses the associated accounting and disclosure impacts which may be relevant to entities preparing their upcoming financial statements.
In our May 2020 update Supporting flow of credit during COVID-19: financial reporting impacts, we provided an overview of several Australian Government initiatives aimed at supporting the flow of credit during the coronavirus pandemic and discussed the associated financial reporting implications for both lenders and the borrowers.
Since then, the Australian Government has launched new schemes which add to the existing suite of initiatives.
Similar to the original suite of initiatives, these new programs are specifically targeted at small and medium enterprises (SMEs) and are intended to help ensure that these entities continue to have access to credit while the economy recovers from the effects of the pandemic.
The new schemes include the:
The SME Recovery Loan Scheme also applies to eligible businesses that are impacted by the March 2021 floods.
Whilst some of the specific terms of the new programs may differ from those launched last year, the financial reporting considerations are similar. Some of the issues that entities participating in these schemes should consider include:
Government guarantees for SMEs and the Arts (PDF 111KB) provides a background to each of the new initiatives as well as information about the key impacts that each scheme may have on financial reporting for both lenders and borrowers.
The Commonwealth Government remains focused on ensuring that SMEs, which are vital to the Australian economy’s revival, continue to have access to credit as they navigate through to the other side of the COVID-19 coronavirus pandemic. In addition, new support measures have been launched which focus on the arts and entertainment sector, being one of the worst affected by the pandemic. The new and updated schemes involve the provision of guarantees by the Commonwealth. Entities participating in these programmes need to consider the financial reporting impacts in their upcoming financial statements.
Find out more about the Government guarantees for SMEs and the Arts by downloading the PDF version of the Reporting Update.