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Financial Reporting

FRC Annual Report and Accounts 2014 / 2015

2015 marks the FRC’s 25th anniversary. Originally established in 1990 to be responsible for setting and monitoring UK accounting standards, the organisation has evolved significantly since then. We have taken on an increasing range of responsibilities, which now also cover corporate governance and investor stewardship, audit and assurance, actuarial work and oversight of the accounting and actuarial professions, and have grown as a result.

Aug 25, 2015

FRC Issues New UK and Irish Interim Reporting Requirements

The Financial Reporting Council (FRC) has today issued revised interim reporting requirements (FRS 104 ‘Interim Financial Reporting’). FRS 104 is relevant for entities that apply UK and Irish GAAP and prepare interim financial reports. FRS 104 promotes the publication of informative and understandable interim financial reports and is consistent with the annual reporting requirements in new UK and Irish GAAP (FRS 102).

Apr 22, 2015

FRC Amends FRS 102 Relating to Pension Obligations

The Financial Reporting Council (FRC) has today issued Amendments to FRS 102 – Pension obligations to clarify aspects of the accounting for defined benefit pension plans by UK and Irish entities. The amendments enable sponsoring employers reporting under UK and Irish GAAP to continue with current practice in accounting for defined benefit pension schemes.

Mar 3, 2015

The New Charity SORP – Timelines to Consider

A new charity SORP has been published in the UK in order to provide guidance on the application of the FRS 102 accounting framework. The SORP also provides guidance to the charity sector on areas where FRS 102, the new UK and Ireland accounting standard, is silent or where guidance is considered necessary. FRS 102 is effective for accounting periods beginning on or after 1 January 2015. The implementation of FRS 102 and the new SORP presents a real challenge both in terms of practical understanding of the new requirements and what they willmean for individual institutions. Charities are not permitted to follow FRS 101.

Feb 17, 2015

Financial Reporting Council publishes Annual Report for 2013/14

In its Annual Report for 2013/14 the Financial Reporting Council (FRC) outlines its achievements and challenges over the year. This is the first FRC Annual Report to be based on the new framework for the Strategic Report and includes its first financial statements prepared in accordance with the new UK Generally Accepted Accounting Principles (UK GAAP).

Jul 22, 2014

FRC Publishes ‘True and Fair’ statement

The Financial Reporting Council (FRC) today publishes a statement reconfirming that the presentation of a true and fair view remains a fundamental requirement of financial reporting. In October 2013, the Department for Business, Innovation & Skills (BIS) and the FRC confirmed that the current legal framework requires companies to present a true and fair view. Consistent with this, the FRC today publishes an updated statement on the application of the true and fair requirement under International Financial Reporting Standards (IFRS) and UK GAAP. A previous statement was issued in 2011.

Jun 10, 2014

European Securities Markets Authority publishes annual Activity Report on monitoring and enforcement of International Financial Reporting Standards in Europe

European Securities Markets Authority publishes annual Activity Report on monitoring and enforcement of International Financial Reporting Standards in Europe. The European Securities Markets Authority (ESMA) has published its annual activity report on the monitoring and enforcement of International Financial Reporting Standards (IFRS) in Europe. The Report provides an overview of the activities conducted at European and national level with respect to examining compliance of financial information of listed issuers on regulated markets with the applicable reporting framework. It also outlines other activities conducted with the objective of contributing to supervisory convergence in the area of financial reporting, and, in particular, with respect to IFRS in the European Economic Area (EEA) during the year ended 31 December 2013.

May 27, 2014

FRC Simplifies Accounting for Micro-entities

The Financial Reporting Council (FRC) today publishes an amended version of the Financial Reporting Standard for Smaller Entities (FRSSE) for use by micro-entities which want to take advantage of new regulations allowing them to prepare simplified financial statements.

Micro-entities are the UK’s smallest companies. They are now able to use the FRSSE when choosing to apply the new micro-entities regime and prepare simplified financial statements with fewer disclosure notes than previously required by the FRSSE. The micro-entities regime was introduced into UK company law in November 2013 following new EU legislation.

May 7, 2014

XBRL: The Emerging Landscape

This Questions & Answers (Q&A) publication is issued by staff of the International Auditing and Assurance Standards Board (IAASB) to highlight the growing interest in, and use of, XBRL and raise awareness about how XBRL-tagged data is prepared and how it may affect financial reporting. It also clarifies that the IAASB’s auditing pronouncements currently do not impose requirements on auditors with respect to XBRL-tagged data or the representation of this data. Finally, this publication describes the IAASB’s planned consultation activities which may lead to the development of a new international pronouncement addressing XBRL.

May 7, 2014

FRC issues its Plan and Budget for 2014

The Financial Reporting Council (FRC) has published its Plan, Budget and Levies for 2014/2015. The Plan confirms the FRC’s mission, highlights progress on its three year strategy for 2013-16 and sets out its priorities and projects for the current year. The FRC is grateful to those who responded to its consultation on the Plan. Taking account of the comments received it intends in 2014/15 to focus on the following projects: Promoting better quality in the audits of banks and building societies. Encouraging greater clarity and concision in corporate reporting, including cutting unnecessary clutter.

Apr 22, 2014

Introduction of new Irish and UK GAAP - FRS 102 - Are You Ready?

We now know the full shape of the new financial reporting framework to be applied in Ireland and the UK with the publication of FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” by the FRC in March 2013. This follows the publication of FRS 100 and FRS 101 in November 2012.

Mar 25, 2014

Editorial Amendments and Clarification Statements Issued by the FRC in Relation to FRS 102

This document sets out all editorial amendments and clarification statements issued by the FRC to date in relation to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. The document is organised by section.

Mar 25, 2014

IAASA seeks to establish a panel of legal advisors

IAASA has the power to initiate Statutory Enquiries and Investigations pursuant to Sections 23 and 24 of the Companies (Auditing and Accounting) Act 2003 respectively and the associated regulations. Pursuant to these regulations, the Board may appoint legal advisers to provide assistance to such Committees. IAASA now seeks to create a panel of legal advisors to act as advisors to Section 23 and Section 24 Committees for a period of three years. Further details of this invitation can be found here.

Mar 25, 2014

FRC Proposes Amendments to Accounting for Debt Instruments

The Financial Reporting Council (FRC) has issued today proposals for consultation intended to reduce the need for businesses to measure debt instruments at fair value. The exposure draft, FRED 54: Draft Amendments to FRS 102 – Basic financial instruments proposes to amend the conditions that determine whether debt instruments can be measured at amortised cost or fair value under new UK and Irish GAAP (FRS 102).

Feb 18, 2014

FRC challenges the reporting of companies classifying pension liabilities as equity

The Financial Reporting Council (FRC) warns Boards against entering into arrangements that turn pension obligations into equity instruments in their accounts. Several companies that used Scottish Limited Partnerships to achieve this outcome have taken steps to address the FRC’s regulatory enquiries.

Jan 21, 2014

FRC Calls to Action for Improving Disclosures

As the reporting season approaches, Roger Marshall, Director of the Financial Reporting Council sets out a series of calls to action for preparers and auditors to consider improving the quality of disclosures in annual reports. These calls to action are based on feedback received on the FRC’s thought leadership paper ‘Thinking about disclosures in a broader context’. In line with the FRC’s Corporate Governance Code, we believe that the guiding principle for annual reports as a whole to be fair balanced and understandable is crucial to high quality financial reporting.

Nov 12, 2013

Linda De Beer Reappointed Chair of the IAASB Consultative Advisory Group

Prof. Linda de Beer has been approved as the chair of the Consultative Advisory Group (CAG) to the International Auditing and Assurance Standards Board (IAASB) by the Public Interest Oversight Board (PIOB)* on the recommendation of the members of the IAASB CAG**. The approval of Prof. de Beer extends her leadership, the first term of which commenced on October 1, 2010, for an additional 18-month period that will end on March 31, 2015.

Nov 12, 2013

Financial Reporting Council Publishes Annual Report for 2012/13

In its Annual Report for 2012/13 the Financial Reporting Council (FRC) outlines the benefits of the reform of the organisation. This combined annual report is the first since the reforms that brought the FRC’s eight regulatory bodies into one were approved by parliament and its stakeholders. FRC Chairman Baroness Hogg said: “Reform has enabled the FRC Board to work more effectively with the market. The FRC has raised its game and created a greater focus on its primary task - trying to ensure that investors in the capital markets have what they need: effective boards; useful annual reports and accounts; easily comparable standards and good audit and actuarial standards.

Jul 23, 2013

Governance and Transparency of the Audit

Audit committees – as the representatives of shareholders – are critical to the integrity and ultimately the quality of the audit. Quality has improved measurably in countries where audit committees have the authority and responsibility to oversee final preparation of the financial statements and the audit, including the appointment of the auditors. Providing more and better information to audit committees on a consistent basis will not only make them more effective, but will also help their decision-making around whether the audit firm should be reappointed. There should be more transparent reporting by audit committees to give regulators, investors and the market more insight into the audit and the appointment of the auditors.

Jul 23, 2013

Irish CEOs Feeling More Positive – While Still Tackling Business Challenges

PwC’s 2013 CEO Pulse Survey, launched today, reveals that despite ongoing challenges, the business confidence sentiment level on the Irish economy is on the increase and is at its highest level since 2007. Nearly a third (31%) of CEOs are favourable about the outlook for Ireland’s economy compared to just under a quarter (22%) last year. On a similar note, nearly half (44%) of Irish CEOs are favourable about the outlook for their own businesses with many expecting revenue (56%) and profit growth (53%) this year. Capital investment is on the increase with 43% of CEOs now planning to invest compared to 33% last year. Important areas of focus for CEOs in the year ahead are the availability of key skills and staying closer to their customers.

Jul 23, 2013

FRC prohibits the use of Internal Audit Staff on the External Audit Team

The FRC has introduced a measure that creates a clearer division of responsibility between internal and external audit teams to safeguard against conflicts of interest. By prohibiting auditors from using internal audit staff as “direct assistance” members of the audit team, the FRC is seeking further to ensure the independence of the external auditor and promote greater confidence in the integrity of the audit for investors. The prohibition comes into effect for audits of financial statements for periods ending on or after 15 June 2014.

Jun 25, 2013

FRC Issues Revised Auditing Standard

FRC issues revised auditing standard: making auditors’ work more transparent to investors. The FRC has made a significant change to the UK’s corporate governance regime with the issue of its revised auditing standard enhancing the transparency of the auditor’s report with the aim of better communication to investors.

Jun 10, 2013

The Future of Irish GAAP is Here

The FRC has issued three new standards; FRS 100, FRS 101 and FRS 102. They apply to periods beginning on or after 1 January 2015 but can be adopted immediately. The three new standards are FRS 100 ‘Application of Financial Reporting Requirements’, FRS 101 ‘Reduced Disclosure Framework’ and FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’. The new framework is mandatory for accounting periods beginning on or after 1 January 2015 and must be applied to such periods, however early adoption is permitted. Current Irish GAAP will be withdrawn at this date and will no longer apply.

May 28, 2013

FRC issues its Plan and Budget for 2013 to 2016

The FRC has releases its Plan and Budget 2013/16 following a period ofconsultation. The FRC underwent significant reform in 2012 which saw the organisation transformed into a fully integrated body with new powers to act decisively and proportionately when new risks arise. The Plan sets out the overarching goal to build trust and foster investment through effective regulation, developing a stronger voice in Europe and internationally whilst delivering better value for money for levy payers.

May 14, 2013

The Publication of FRS 102 Marks a Seminal Moment in Financial Reporting for the UK and Republic of Ireland

The publication of FRS 102 marks a seminal moment in financial reporting for the UK and Republic of Ireland, says PwC. The UK Financial Reporting Council (FRC) has published (on 14 March 2013) Financial Reporting Standard 102 (FRS 102) The Financial Reporting Standard applicable in the UK and Republic of Ireland. The FRC (and its predecessor the Accounting Standards Board) have been working towards this day for a number of years and the publication of FRS 102 is arguably more significant for the UK and Irish business community than the EU decision in 2002 to mandate the use of IFRS by EU listed entities.

Mar 26, 2013

Key Sections of Code of Ethics for Professional Accountants Strengthened

The International Ethics Standards Board for Accountants (IESBA) released strengthened provisions in its Code of Ethics for Professional Accountants (the Code) to address conflicts of interest and a breach of a requirement of the Code. It also released amendments to the definition of the term “engagement team” in the Code.

Mar 26, 2013

FRC Announces New Accounting Standards for the UK and Republic of Ireland

The Financial Reporting Council, recently issued FRS 100 Application of Financial Reporting Requirements and FRS 101 Reduced Disclosure Framework. These new standards are issued as part of the FRC’s fundamental reform of existing accounting standards.

Dec 3, 2012

Observations on Selected Financial Reporting Issues

IAASA has published their Observations on Selected Financial Reporting Issues for Financial Years ending on or after 31 December 2012. Similar to previously published Observations documents, the purpose of this document is to seek to assist issuers’ management and those charged with issuers’ governance in the preparation of high quality financial reports by offering observations on selected financial reporting issues to coincide with the preparation of issuers’ 2012 financial statements.

Nov 20, 2012

The Future of Financial Reporting

Since 2004 the ASB has been working on a new set of principles aimed at balancing the needs of preparers and users of accounts by simplifying current standards into a concise, coherent and updated form. The overall objective of the ASB is to enable users of accounts receive financial reporting information that is of high quality, readily understandable and proportionate to the size and complexity of the entity and user information needs.

Jun 18, 2012

Going Concern and Liquidity Risks: Lessons for companies and auditors published

Going Concern and Liquidity Risks: Lessons for companies and auditors, publishes its final report and recommendations today.

The Panel's key recommendations are that:-

The primary purpose of the going concern assessment and reporting should be to reinforce responsible behaviour in the management of going concern risks; and
The going concern considerations made by directors and reviewed by auditors should cover both solvency and of liquidity and that these should be considered over the cycle, taking an appropriately prudent view of future prospect

Jun 18, 2012

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