Financial Reporting News

Financial Reporting News

Update on FRC financial reporting consultations
The UK’s Financial Reporting Council have published FRED 84 Draft Amendments to FRS 102 – Supplier finance arrangements. The exposure draft proposes to introduce new Disclosure requirements to provide users of financial statements with additional information about an entity’s use of supplier finance arrangements and the effect of such arrangements on the entity’s financial position and cash flows. The proposals are based on amendments issued by the IASB in May 2023.

Comments on FRED 84 are requested by 31 December 2023. The FRC expects to finalize the proposed amendments in the first half of 2024, alongside the amendments arising from the current periodic review of FRS 102 and other FRSs.

The FRC have also issued a project update on its periodic review of UK and Ireland accounting standards which proposed significant amendments to FRS 102 and FRS 105 affecting revenue recognition, lease accounting, and a number of other incremental improvements and clarifications. The FRC currently expects to issue the final amendments to FRS 102 and other FRSs in the first half of 2024, with an effective date not before 1 January 2026.

Public sector needs to prepare for sustainability reporting and assurance challenge
Across the globe momentum is building for sustainability reporting and assurance in the public sector. The IPSASB decided to move forward with the development of public sector specific sustainability reporting standards beginning with a Climate-Related Disclosures standard. Finance and audit professionals working in government, public sector bodies and supreme audit institutions – Auditors-General’s offices, Courts of Accounts and similar (SAIs) – can demonstrate leadership on this agenda, driving action to progress transparent reporting and assurance of expenditure and actions to address sustainability challenges.

At the World Investment Forum in Abu Dhabi on 16th October three global bodies, ACCA, IFAC and IDI launched a summary of their forthcoming introduction to sustainability and assurance in the public sector.

Based on their ongoing work and recent global roundtables with public sector reporting and auditing experts, the report makes the case for a focus on the principle of sustainable development: “meeting the needs of the present without compromising the ability of future generations to meet their own need.” It outlines what sustainability reporting and assurance mean for the public sector, why they are important, and key principles for governments, SAIs and other public sector bodies to consider in this journey.

ESMA publishes three reports including the annual public statement setting out the 2023 European common enforcement priorities
The European Securities and Markets Authority (ESMA) has issued three reports.

  • The annual Public Statement setting out the European common enforcement priorities (ECEP) for the 2023 annual financial reports.
  • A Report dealing with the disclosure of climate-related matters in financial statements- The Heat is On: Disclosures of Climate-Related Matters in the Financial Statements.
  • A Report setting out the results of a fact-finding exercise on corporate reporting practices under the Taxonomy Regulation.
FRC sets out reporting expectations amidst ongoing economic uncertainty
The Financial Reporting Council (FRC) recently published its reporting expectations for companies amidst a period of high interest rates, persistent inflation and ongoing economic uncertainty.

In its Annual Review of Corporate Reporting, the FRC has reported the findings from its monitoring activities, together with its expectations for the coming reporting season. It reviewed 263 company reports and wrote to 112 companies with questions about their accounts.

Following FRC enquiries, 25 companies were required to restate aspects of their accounts.

The most frequently raised issues identified by the FRC related to impairments, and judgements and estimates. This reflects the ongoing economic uncertainties companies need to factor into their financial reporting and the need for detailed explanations to help users understand the positions taken.

IAASA Audit Committee Briefing 2023
IAASA recently hosted its annual audit committee briefing and topics included focus on sustainability reporting, IAASA regulatory updates, an audit committee panel session, audit committee education topics and cybersecurity.

This event has been recorded and is available here.