Financial Reporting News

Financial Reporting News

FRED 84 Draft amendments to FRS 102 – Supplier finance arrangements
FRED 84 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 were due 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.

CPA Ireland responded to FRED 84.

FRC takes systemic look at barriers to competition in UK audit market
The Financial Reporting Council (FRC) recently published a summary of key findings and potential actions from research it commissioned into barriers to entry and growth faced by audit firms in the UK.

The report highlighted capacity constraints, recruitment and retention challenges, alongside regulatory requirements, as the main obstacles for smaller firms looking to expand their presence – especially in audits of public interest entities (PIEs).

To promote greater competition and choice in the audit market, the FRC has highlighted the importance of a collaborative, cross-system approach involving the regulator, audit firms, professional accounting bodies, and government. The FRC itself has already launched initiatives like Scalebox to help smaller firms understand regulatory standards and grow their PIE audit capabilities.

Audit firms are encouraged to prioritise cultures that better support their staff, including training and resources, while professional accounting bodies should continue efforts to attract new talent into the profession and maintain high auditing standards. Government can also play a role with policies that encourage competition and innovation in the audit market.

Outcome of financial statement examinations completed in 2023
IAASA recently published a summary of the outcomes of its examinations of financial reports completed in 2023. This summary outlines the findings from financial statement examinations completed by IAASA’s Corporate Reporting Supervision Unit in the year.

The summary indicates:

  • The impact of climate change and climate impact mitigation initiatives on companies. This reflects the focus of IAASA on the financial reporting implications of climate change and climate commitments by companies.
  • The adoption of European Sustainability Reporting Standards (ESRSs) across Europe on a phased basis from 2024 (ie financial year 2024, with sustainability reporting first being published in 2025) will dramatically impact environmental reporting requirements for companies; and
  • That, in general, the level of compliance by companies with financial reporting requirements continues to be strong.

A summary of the report can be found here.

Q4 2023 IFRS Interpretations Committee podcast now available
Bruce Mackenzie, Chair of the Committee and International Accounting Standards Board Member, along with Committee members Jon Nelson and Jens Freiberg, talks about the decisions made at the meeting held on 28-29 November 2023.

The podcast focusses on two of the Committee’s discussions about:

  • Climate-related commitments in IAS 37 Provisions Contingent Liabilities and Contingent Assets; and
  • Disclosure of revenues and expenses for reportable segments in IFRS 8 Operating Segments.