FRC guidance, EFRAG letter, and Accountancy Europe response

Here’s a roundup of recent developments in the corporate reporting world.

UK strategic report guidance updated

The UK Financial Reporting Council (FRC) has published an updated Guidance on the Strategic Report. The latest version updates the guidance to align it with corporate governance regulations introduced since 2016. The updated guidance also makes clear the links to the Companies Act 2006. Specifically, the guidance addresses the importance of nonfinancial reporting and integrated reporting. The FRC believes the integration of nonfinancial information is a key part of telling a company’s story.

EFRAG board’s views on IFRS 17

The board of the European Financial Reporting Advisory Group (EFRAG) wrote a letter dated 3 September to the International Accounting Standards Board (IASB) regarding IFRS 17, Insurance Contracts. EFRAG is in the process of preparing draft endorsement advice on IFRS 17 and in this context notes six concerns of its constituents. The topics, addressed in a letter to IASB Chairman Hans Hoogervorst, are:

  • Acquisition costs.
  • CSM amortisation.
  • Reinsurance.
  • Transition.
  • Annual cohorts.
  • Balance sheet presentation.

The EFRAG board’s letter said the topics came as a result of “significant outreach with constituents” and two case studies with European insurance companies: an 11-company “extensive” one, and a 49-company “simplified” one.

European consultation on invoicing

Accountancy Europe has responded to a European Commission consultation on invoicing rules with specific concerns, according to a completed survey Accountancy Europe posted on its website. The survey lists five invoicing requirements that can be “an unnecessary burden” on business:

  • That invoices require a digital signature.
  • That operators are faced with specific and detailed rules about filing and archiving electronic invoices.
  • That electronic invoices can be automatically refused by tax authorities’ systems when the file is unreadable or the sender’s ID is uncertain.
  • That there is a single prescribed format for invoices.
  • That it is not permissible to file with tax authorities only a simplified invoice.

The commission said that the scope of the consultation, for which the comment period ends on Thursday, 20 September, is to collect data and evidence needed to evaluate invoicing rules introduced by the Second Invoicing Directive (Directive 2010/45/EU).

— David Hackett is technical policy manager at the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Neil Amato, an FM magazine senior editor, at Neil.Amato@aicpa-cima.com.