As a result of the disruption to global business caused by the 2019 novel coronavirus disease (COVID-19) outbreak, entities may be considering the need to revise their earnings guidance and forecasts.

To ensure compliance with the ASX Listing Rules, entities need to carefully consider at what point they may need to disclose revised financial information to the market. This is particularly relevant in light of the decisions in TPT Patrol Pty Ltd v Myer Holdings Ltd [2019] FCA 1747 and Masters v Lombe [2019] FCA 1720, handed down in the second half of 2019. These decisions made clear that entities may be liable for loss caused by failing to correct earnings guidance that the board knows, or ought to know, is no longer correct. For more information, see Legal update: archive, You’ve got nothing to lose: Myer, Babcock & Brown, continuous disclosure obligations and securities litigation.

Entities will need to carefully consider their obligations under ASX Listing Rule 3.1 and, in particular, whether all of the exceptions in ASX Listing Rule 3.1A continue to apply in circumstances where the board is discussing downgrading the entity's earnings guidance.

This issue is not limited to Australia, with the United Kingdom Financial Reporting Council issuing guidance for entities and auditors in that jurisdiction (see Legal update: archive, Financial reporting: FRC advice on Coronavirus risk disclosures).