In 2018/19 the Financial Reporting Council (FRC) aims to write to a number of companies (prior to their year-end) informing them that it will review their next published reports and accounts.
Every year the FRC performs a series of thematic reviews on specific aspects of corporate reports where there is particular shareholder interest or scope for improvement and sharing good practice.
AIM quoted and smaller listed company reports
AIM quoted and smaller listed companies could have two specific aspects of their next published accounts looked at from five key areas.
Three of these were subject to thematic reviews last year so businesses are advised to follow the recommendations when preparing their reports and accounts (see our analysis in the links below).
The five key areas:
- The strategic report and Alternative Performance Measures (APMs)
- Accounting policies including critical judgements and estimates
- Cash flow statements
- Tax disclosures
- Pension disclosures
In addition, the FRC has announced that it will:
- Conduct a focussed review on June 2018 interim accounts of companies most likely to be impacted by the new standards on revenue IFRS 15 and financial instruments IFRS 9;
- Monitor the quality of disclosures relating to the expected effect of the IFRS 16 lease accounting; and
- Monitor the effects of Brexit on companies’ disclosure of principal risks and uncertainties.
When selecting corporate reports to review, the FRC will have regard to the following priority sectors:
- oil and gas;
- general retailers;
- business support services: and
- financial services, with particular emphasis on banks, other lenders and insurers.
If you have any further queries or have been approached by the FRC to have your report and accounts reviewed, please feel free to contact your usual RSM contact.
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