ASX clarifies expectations around disclosure of earnings surprises

  • ASX recently announced updates to Guidance Note 8 on continuous disclosure requirements in relation to earnings guidance.
  • A listed entity should make an ASX announcement to update the market on its forecast earnings where it is different from consensus earnings forecasts by 15 per cent regardless of whether the entity has issued any prior earnings guidance or forecasts
  • This article includes a table of ASX’s scenarios and their corresponding guidance and announcement requirements.

Recently, ASX announced updates to Guidance Note 8 on continuous disclosure requirements in relation to earnings guidance. 

ASX has retained the overall framework of its existing guidance in the update. However, for the first time ASX expressly stated that a listed entity should make an ASX announcement to update the market on its forecast earnings where it is different from consensus earnings forecasts by a specified percentage of 15 per cent, even where the company has not issued any earnings guidance or forecast.

ASX has also set out exactly what it expects to see in an announcement about a market-sensitive earnings surprise. Interestingly, this will require an entity to provide quantitative guidance even if it had never published earnings guidance in the first place in some circumstances. 

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