Material Uncertainty – ASX Listed Entities

Companies reporting ‘material uncertainty’ in their accounts to 31 December 2024 recorded total net losses of over $5 billion for the 2024 calendar year.

ASX listed companies and many other large organisations are required to report their statutory accounts for the financial year ending 30 June and half year ending 31 December with the ASX.¹ As part of these reporting obligations, management and their auditors are required to assess and conclude, based on the audit evidence obtained, whether a material uncertainty exists with respect to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern.² If events or conditions arise that cast significant doubt on a company’s ability to continue as a going concern, a material uncertainty exists.³

Companies are required to disclose the presence of a material uncertainty as part of their financial reporting obligation with the ASX.⁴ Auditors will also provide their opinion and comment on the going concern assumption as part of a company’s financial reports. The inclusion of a material uncertainty qualification suggests a company may be facing significant stress or require a refinance or capital raise and may, in some cases, foreshadow an insolvency event.⁵

FTI Consulting has analysed all ASX lodgments made from 1 January 2025 to 14 March 2025 relating to the 31 December 2024 reporting period, examining financial performance for the twelve months to 31 December 2024 of companies reporting material uncertainty.⁶

Infographic showing $1.92bn in EBITDA losses, $5.04bn in net losses and 22% of ASX-listed companies with uncertainty. Infographic showing 51% of material uncertainty cases in WA, 16% in NSW and 15% in VIC, with a focus on the materials sector. Graph reporting on material uncertainity by industry for VIC and NSW. Graph - industries experiencing the highest rates of material uncertainty in relation to going concern. Infographic showin the percentage of companies by sector reporting a material uncertainty. Inforgraphic - material uncertainty average financial performance and position. Bar chart showing material uncertainty by market cap, with most reports from companies under $20M, peaking at 208 for $0–10M.

How FTI Consulting Can Help

Our experienced team is skilled at engineering and executing formal and informal solutions to maximise value from distressed or insolvent companies. Whether it’s providing an in-depth turnaround plan to drive value in a restructure, or supporting clients in more distressed situations on how to move forward with a sale or exiting the business.

Our senior leaders and qualified liquidators can accept formal appointments across Australia and can swiftly mobilise a team on the ground to respond to the urgent needs of a client. They combine an unprecedented depth of knowledge and experience across regions, geographies and technical capabilities – tailored to the situations and challenges facing a business.

Footnotes:

1: “ASX Listing Rules”, ASX and “Corporations Act 2001 (Cth)”, Australasian Legal Information Institute.

2: Ibid.

3: “Auditing Standard ASA 570 - Going Concern”, AASB Australian Government.

4: See above (n 1).

5: See above (n 1).

6: All information and statistics are derived from S&P Capital IQ and based on the CY24 period.

7: Based on registered head office location.

8: Due to rounding, total percentages do not equal 100%.

9: The observed result in Western Australia is largely attributable to the numerous ASX-listed, pre-revenue small-cap explorers, a sector reliant on capital raises to finance exploration and development activities.

10: Ibid.

11: Ibid.

12: Ibid.

13: Ibid.

14: As at 14 March 2025.