By Fedix team • • 3 min read
ASIC's latest review of insolvent liquidations shows how limited recoveries can be after a company reaches liquidation. For accountants advising companies in difficulty, its findings reinforce the value of identifying financial distress early and seeking suitable advice.
Source: ASIC media release 26-258MR.
What the review covers
Report 843 examined 26,664 grouped appointments in court and creditors’ voluntary liquidations from 1 July 2021 to 30 June 2025. ASIC says the review provides new detail about companies entering liquidation, their available assets, creditor returns, liquidator remuneration and use of simplified liquidation.
What the review found
- Few assets. About half of the liquidations realised no more than $10,000 in assets, and about one-quarter realised none.
- Repeat directors. Around one in five appointments involved a company whose director had previously been a director of another company when it entered liquidation.
- Established companies. The median age of companies entering liquidation was seven years; 60.9% of appointments involved companies aged six years or older.
- Liquidator remuneration. In 88.1% of finalised liquidations, ordinary unsecured creditors received no dividend and the liquidator received no approved remuneration or less than the approved amount.
- Simplified liquidation. Only eight simplified liquidations were adopted in 2024–25, around 0.2% of CVLs with reported liabilities not exceeding $1 million. ASIC notes that liabilities below that threshold are only one of several eligibility criteria.
Who may be affected
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Book a demo (opens Microsoft Bookings in a new tab)Prefer to write? Contact us about a demo instead of booking a slotASIC identifies creditors, employees, directors and liquidators as groups affected by these outcomes. For accounting practices, this may include a director whose company is experiencing financial pressure, a client owed money by a failed company, or a client owed wages or other amounts by an employer.
Acting early
ASIC Commissioner Kate O’Rourke said: “Taking action early gives a company more options to address financial difficulties.” The release explains that delay can reduce opportunities to restructure, preserve value or limit further creditor losses. ASIC also published a learning module to help small-business directors recognise financial difficulty and understand possible early steps.
A plain-English example
A trading company falls behind on payments and its director waits before seeking help. By the time a liquidator is appointed, the company has few assets to realise. Creditors may recover little, and the liquidator may not receive the full approved remuneration. ASIC's report describes aggregate outcomes across the review period; it does not describe any individual company.
Next steps for your practice
This is general information, not advice. Practices can read Report 843 and the release, review how they identify early warning signs in client financials, and refer clients to a registered liquidator or another suitably qualified professional when a company's position is uncertain. For a particular client, check the relevant source material and professional guidance.
Read ASIC's original release. For more resources for accounting practices, visit Fedix.